One year ago, if you had asked a group of electrical distributors about challenges facing their businesses, many would have said that they had a people problem: specifically, finding and keeping good employees.
Given the decline in the economy and the rise in unemployment over the past several months, one might expect the people problem to have eased for electrical distributors. Not necessarily so.
Although some electrical distributors report that the situation is somewhat better, many continue to have a hard time finding good employees.
“I think it's always a problem — when times are good, or when times are bad — because it's a matter of finding the right people,” said Susan Levering, director of human resources for Rexel's Mid-Atlantic division.
B&K Electric Wholesale, City of Industry, Calif., is one distributor dealing with the dilemma of finding the right people. Since B&K added datacom products to its shelves last year with its acquisition of voice/data distributor Sanger Communications, B&K has had a tough time finding salespeople with voice/data knowledge.
“There is a lack of personnel available for (datacom sales),” said Kathy Ellison, president and CEO of B&K. “Ideally, you'd like to hire somebody who already knows the lingo, but it comes to the point where you just hire somebody and train them.”
Warshauer Electric Supply Co., Tinton Falls, N.J., is another distributor that has had to confront the problem of finding people as its business grew. Jim Dunn, Warshauer vice president of sales, said the problem was emphasized last year when the company opened its newest branch in Parsippany, N.J. “Since we're not growing by acquisition, we're not acquiring people,” said Dunn. “We have to go out and find them.”
For Elliott Electric Supply, Nacogdoches, Texas, the problem has eased a bit because some of the larger area chains have downsized, according to Bill Elliott, president of Elliott Electric. Downsizing is also providing some relief for Minnesota Electric Supply Co., Willmar, Minn. “I'm seeing a lot of layoffs in the manufacturing industry, so I'm trying to snap up some of those people and convert them to our industry,” said Connie Stahnke, who heads up human resources for Minnesota Electric.
Stahnke also said that she's not having as much trouble finding good applicants as last year. “Last year it was tough to even get applications for entry-level positions,” said Stahnke. “This year I seemed to get a lot of applications.”
Certainly, up until March, when a decade of expansion ended and recession began, the great majority of industries lamented a lack of interested candidates. For electrical distribution, the problem has been one of greater proportion.
At the core is an identity crisis of sorts. David Pulliam, vice president of human resources and administration for DH Supply Co., Atlanta, Ga., sums it up succinctly: “Electrical distribution is not a sexy industry.”
Rexel's Levering, concurs. “The electrical distribution industry is not an industry of choice,” said Levering. “It's not glamorous. It does not have name recognition the way the music world does or the IT world did.”
To combat the industry's ho-hum persona, the National Association of Electrical Distributors (NAED), St. Louis, implemented its Advocacy Initiative in 1998. The Initiative's mission is to create awareness, understanding and appreciation of the industry.
“The NAED Advocacy Committee is really trying hard to find ways to get that message out there to students, schools, teachers and other people to say, ‘There's a whole career here for you,’” said Levering, who is a member of the committee.
School-to-Work programs at the high-school level and the University of Houston's Distribution and Logistics Engineering program are two other examples of programs that electrical distributors can tap into to create awareness about career opportunities within the industry.
The Distribution and Logistics Engineering program at the University of Houston has a strong industrial advisory board with members like Houston Wire and Cable, Houston, and the Warren Electric Group, Houston. Board members provide critical input into the education process to help keep it current. They provide real-world open-ended projects for students to work on, and they provide direct support for students in the form of scholarships and internships.
In addition to the industry's identity crisis, another obstacle many smaller distributors face is a lack of knowledge and understanding when it comes to recruitment and hiring. “A lot of the small- to medium-size distributors do not have an HR professional on their staff,” said DH Supply's Pulliam. “I think a lot of companies don't realize that there is a certain skill to recruiting. If you're not skilled in recruiting, you're just going to end up paying someone a whole lot of money. Remember, good retention starts with good recruiting.”
But, how do smaller distributors without proven HR programs begin recruiting and retaining the right way?
Small distributors need to start by making people a higher priority, said Tom O'Connor, a Farmington, Conn.-based consultant to wholesale distributors. O'Connor sees a lot of distributor owners with annual sales of less than $20 million who don't spend much time with their employees.
“They spend a lot of time focused in the sales arena and in the vendor arena, forming vendor partnerships and good customer relationships, but they don't spend a lot of time with their people.” According to O'Connor, small distributors need to spend more time in the human resources arena. O'Connor said providing employees with opportunities for personal growth and training are key elements to recruitment and retention.
“I also think the smaller guy has a harder time recognizing the importance of personal life and family life while providing strong leadership,” said O'Connor. “The larger distributors recognize that and offer more flexibility than the smaller guy can. So a smaller guy has got to really present a compelling mission to his people. He's got to show his people that his organization — albeit small — is moving forward and isn't going to die in the dust with these uncertain economic times.”
Other key ingredients to effective recruitment and retention include recognition and rewards, which don't necessarily come in the form of compensation.
“With subjects like recruitment and retention, we have continuously asked the wrong questions,” said consultant Bruce Mast, of BMA, a leadership and organizational firm headquartered in Exeter, N.H. “The vast majority of recruitment and retention programs are nothing more than bribery.”
According to Mast, the first question should be, “Why would anybody want to work here?”
“You need to understand what people want from work,” said Mast. “If you understand that, you'll attract and retain people.”
According to Mast, people want three things from work.
People want to belong to something bigger than themselves; to contribute to something that matters. “Human beings need meaning,” said Mast. “So, the question distributors need to ask themselves is, ‘How by being a part of this organization will that bring meaning to my employees' lives?’
“To define the distribution business as putting things on shelves and schlepping them to electrical contractors is to diminish people to being task-performing machines.”
People want to make a unique contribution; to do work for which they are “well-aligned.” They want to make unique contributions to the good of the whole. “Don't turn people into carbon copies of each other,” said Mast. “Let each person find his or her unique place. Don't hire the box that left. Hire someone who brings something to the group that is essential for its success that the group doesn't have.”
People want to be rewarded in a way in which they feel rewarded. “You feel value potentially differently than how I feel value,” said Mast. “You're going to be a lot more productive and feel a lot better about working somewhere, and not leave if you feel fully valued by the organization.”
As a result, more companies are working toward benefit plans that have a lot of flexibility so employees can select the kinds of things that create the most value for them.
“I think organizations need to change and provide more flexibility in benefits and flexibility in work environments,” said Minnesota Electric's Stahnke.
More and more innovative distributors realize that for many employees getting one's job done does not necessarily mean being in the office from 9-to-5. Both D.H. Supply and Minnesota Electric offer flexible work schedules and telecommuting options.
Minnesota Electric also has a Children-in-the-Workplace policy. “We are pretty specific on which jobs and what the requirements are, but it's been well-received,” said Stahnke. “It's just a way that we provide a family atmosphere and flexibility, not only with benefits but with our policies and the way we treat our employees.”
Are the principles of employee retention different during a recession? Maybe. But, keeping employees happy and motivated is just as important in a poor economy as it is in a robust economy.
“I think from an HR perspective it's a little easier to keep people when the economy is not robust just because people are not job-hopping as much,” said Minnesota Electric's Connie Stahnke. “I don't think that because the economy is in a downturn that we can take them for granted.”
“I think one of the things employees really want is recognition for doing a good job,” said Rexel's Susan Levering. “While part of that is salary, I think part of it can be as simple as ‘thank yous’ and internal recognition.”
During recession, companies may have to make hard choices and cutback on some benefits. At times like this, it may be more important to make employees feel valued. Try implementing employee excellence rewards, such as employee of the month and/or year awards or an all-star recognition program.
“If you can't provide a compelling place for people to work,” said consultant Bruce Mast, “then it does become all about the money and the benefits.”
In addition to basic benefits like medical insurance and vacation time, companies with high-retention often offer the following:
- Dental and vision plans
- Computer-purchasing assistance
- Employee assistance programs
- Profit sharing
- Short-term and long-term disability
- Life insurance
- Tuition reimbursement
- Flexible hours
- Wellness Programs
For smaller distributors that don't have a human resources professional on staff, the interviewing and screening process can sometimes be a crapshoot.
“Good interviewing is something that you continue to learn and evolve,” said Connie Stahnke, who worked as a consultant before joining Minnesota Electric two years ago to head up its human resources. “Step one is knowing what you want, what kind of performance elements, and then putting together the questions that will get those responses from that individual.
“One of the things that I think is important is to ask a lot of questions in the interview process. Take the time and do a thorough job of screening.”
Stahnke advocates asking a lot of behavior-based questions. For instance, if a position requires a person who is good at solving problems, ask the applicant if he or she has had a situation with a difficult problem in a past job. Then ask how he or she solved the problem. “You get an example of past behavior, and past behavior is a good predictor of future behavior,” Stahnke said.
To get a good fit when hiring, it's also important for applicants to have a clear understanding of what the job entails and what your organization is all about.
“I'm very upfront about what we do,” said Stahnke. “I give them a tour and show them around, because I don't want them to have any surprises, either. I want them to have a thorough understanding of what we do as an organization.”
For distributors with successful human resources programs, the hiring process also often includes doing a personality profile, reference checks, criminal background checks and drug screening.
To help small distributors that do not have a human resources professional on staff, NAED recently added a set of human resources forms as a member benefit. The modifiable and printable set of forms is available free to NAED distributor members and includes forms such as a job application and performance appraisal.
15 HIRING TIPS
Having trouble getting good fits when it comes to hiring? These tips will help you attract and retain employees that are right for your company.
Approach the hiring process as an opportunity to hire someone who brings skills that your organization does not already have.
Don't make employees carbon copies of each other. Value employees for their unique contributions.
Ask a lot of questions during the interview process.
Provide options when it comes to benefits.
Do a thorough job screening, including reference checks.
Make sure applicants have a clear understanding of what the job entails and what your company is all about. Neither you nor they want any surprises.
If local electrical distributors are downsizing, snatch up experienced workers.
What about related industries? Are they downsizing in your area? If so, it might be a great time to convert some of those workers to electrical distribution.
Contact your local School-to-Work program to create awareness about career opportunities within your company.
Make your organization's people the top priority. Employees that feel valued and appreciated stick around.
Ask yourself, “Why would anybody want to work here?” If you can't come up with several good compelling reasons, it's time to reevaluate.
Provide employees with opportunities for training and personal growth.
Implement recognition awards and reward programs.
Can't find that perfect someone with electrical wholesaling experience? Hire and train. Some distributors have high success when hiring “clean slates.”