by Stephen Wagner
Jonathan Felouzis of Giant Eagle and Morini Food Services is a human resource professional who loves football. He’s a fan of the Pittsburgh Steelers and the Baltimore Ravens. He also loves the late Green Bay Packers coach Vince Lombardi, whom he enjoys quoting when trying to make a point. And one of the points he was trying to make at Penn-Ag’s annual meeting and spring banquet at the Farm Show Complex in Harrisburg, PA is that principles which have proven successful in retail business can also be successful in agriculture. “In 2012,” he reported, “there were 965 dropped passes in the NFL. I’m talking about catchable passes, passes that high school and junior high school kids could catch. Why are passes dropped? The receiver takes his eyes off the ball. He thinks about too much, and drops the ball. Only 11 percent of companies today are employing successful retention tactics.”
Employee retention is one of the most misunderstood concepts in business. Retention has a dramatic impact on reducing costs and improving the overall effectiveness of the organizations. “Excellence is achieved by the mastery of fundamentals,” said Felouzis, quoting Lombardi. In Felouzis’ mind, it is clear enough: if you want to keep your employees, statistics don’t lie. Follow the numbers. Retention refers to a company’s ability to keep its employees, especially the good ones rather than the poor performers; it also refers to keeping workers who are crucial to company success. Companies that lose top performers may lose productivity and are likely to incur significant costs in replacing them. Studies show that in today’s struggling economy, retaining good workers is the tipping point between success and failure in many companies.
“Turnover can be very high in the grocery and supermarket business,” Felouzis said, “60 to 100 percent in a year’s time.” Add to that other factors like low morale, plummeting sales, ground-gaining competitors, low productivity, bad customer service, and you have a company that can pronounce itself as problem-ridden. Felouzis said his focus as an HR person in a previous job was to reduce turnover. When he looked into causes of employee exits, he said he found a lot of tension in the company’s various departments, and infighting that caused walkouts (“a lot of people were quitting in groups”). Felouzis said almost immediately he employed an open-door policy. “As companies, we can say we have an open door policy, but the only successful way to implement one is to recognize that actions speak louder than words. It took awhile for employees to get comfortable and come back to talk about things.” However, with the implemented policy, a lot of exit interviews were conducted, as well as a lot of “stay” interviews. With the so-called “stay” interviews, “we take our top performers, bring them in and talk to them,” Felouzis said. “We asked ‘why are you staying? What can we do better for you? What are your thoughts?’” They gathered and collated the data at this particular organization, and discovered that several key managers were problems for the company. Those supervisors were treating employees poorly. They were playing favorites and they were discriminating. Progressive discipline entered the picture. It sounded worse than it was and involved coaching employees to do better rather than firing or punishing them. “If they refused that coaching,” Felouzis noted, “it could have led to their removal. This created a more stable environment.”
He added that the upshot was a 30 percent reduction in employee turnover and a saving of thousands of dollars per year. Incidentally, and accidentally, he remembers, “trust occurred! Trust through that daily interaction between employees and supervisors.” Better yet, customer satisfaction began to climb. Sales grew. Productivity went up.
According to the Saratoga Institute, a research firm in Santa Clara, CA that benchmarks best HR practices, the price of turnover costs organizations from 12 to 40 percent of pre-tax income. On the heels of that, the Bureau of Labor and Statistics affirms that average turnover cost for a grocery store is $190,000 per year.
“The drought is going to have lasting effects,” said Felouzis as he wound up his remarks. Zeroing in on agriculture, he thinks that “Changing world demographics and changing world economies are going to drive ag and food consumption. That is bullish for those of us in agriculture. The U.S. will continue to be the ag technology leader. Even as we see increase in yield around the world, those folks are going to be turning to America for design production, expertise, knowledge and experience to really reap the benefits. I don’t think we have anything to worry about as far as losing our lead. Other things to keep your eye on is a debt ceiling debate in Washington, all sorts of deadlines and gnashing of teeth with wringing of hands coming out of the nation’s capitol this year. We are not going to see default; there will be deals. There is still an amount of bipartisanship. The market, however, will get flustered, and then we’ll move on. Our economy will continue to strengthen and things will bode well for the U.S. Farm Bill discussions continue. But we need to educate, not legislate. We need to be out front talking to consumers all the time about what’s going on in agriculture. It is the only way we are going to be able to continue as an industry. People have to see ag through our eyes.”
by Stephen Wagner