OPENING VIGNETTE: SPARTAN USES INTELLIGENT SYSTEMS TO FIND THE RIGHT PERSON AND REDUCE TURNOVER

13.1 OPENING VIGNETTE: SPARTAN USES INTELLIGENT SYSTEMS TO FIND THE RIGHT PERSON AND REDUCE TURNOVER

Spartan Stores is a retailing chain with 115 supermarkets and deep-discount drugstores in Michigan and other Midwestern states. It is also a primary distributor for 330 inde- pendent supermarkets and over 6,000 convenience stores.

Spartan holds a brand position as the neighborhood market, and its management recognized that one of the most critical factors in support of this was the quality and consistency of the people it hires. Spread across two large states and without central- ized hiring standards, the chain's 100+ store managers were making hiring decisions with criteria that were not always consistent across the retail organization. They spent an inordinate amount of time screening candidates and often did not give enough attention to the crucial qualities of the applicants.

A supermarket manager's day is unbelievably long and stressful. Industry turnover in staff is high, over 100 percent. It costs, on average, $3,000 to replace an employee. Spartan's director of human resources, Linda Esparza, put it this way, "We just want to operate our stores better. Customer service is what we're going to use to differentiate ourselves." Some national chains are moving into the market, and Spartan is in a good position to distinguish itself as the neighborly alternative. "It's not the sheer applicant numbers we're looking for," says Esparza, "it's more the efficiency of finding people who are the right cultural fit."

Front-end positions in a supermarket tend to be critical in terms of a customer- service strategy. These positions include cashiers, department managers, and bagger— the employees in direct contact with customers who remember their names, go out of their way to help them, and make them feel welcome. These employees are the key ele- ment in building customer loyalty, so knowing how to hire the right people for front- end positions is vital to the success of the business.

THE SOLUTION Spartan acted quickly to address this need, deciding to take advantage of the latest in

automated hiring systems. Such systems can analyze the profile of an applicant to assess the match between the applicant's characteristics and the requirement of the position. They play the role of recommending proper candidates from a huge pool of applicants and can save a substantial amount of time and money.

After surveying the solutions available on the market, Spartan adopted Unicru's Hiring Management System. Unicru integrated Spartan's prescreening criteria into its automated application process. It also installed a psychological screening test designed to find the most dependable, friendly, and helpful employees. The system provides Web-based assessments for friendly use. All applicants are asked to use the system. Those recommended by the system will be further interviewed and hired. Those assessed to be inappropriate are told that no position fits them. A hiring manger can receive a screened job application within 30 seconds to four minutes after an applica- tion is complete, along with suggested interview questions targeted to the candidate. In some cases, managers will be automatically paged in order to meet a strong candidate

P A R T I V INTELLIGENT D E C I S I O N SUPPORT SYSTEMS

BENEFITS Despite a deep economic recession and increased competition from huge chains like

Wal-Mart, Spartan survived its first quarter (2002) of net loss in its history. By taking smart, swift action to enhance its operational efficiency, the company quickly returned to profitability in the spring and summer of the same year. Major benefits from deploy- ing the automated hiring system include the following:

• Reduced turnover rate. The turnover rate is down from over 100 percent to 59 percent. While this may be partly due to the economic recession, hiring more

dependable people more consistently has a major effect. • Increased operational efficiency. The system also provides information about the efficiency of its hiring. The HR manager can now look in detail at each store, region, or the entire enterprise, and spot immediate needs as well as long-term trends in human resource needs.

• Higher functional integration. The system can use the collected application data to evaluate the company's WOTC (Work Opportunity Tax Credit) eligibility. In

19 stores, Spartan was able to apply for enough WOTC tax credit so that the sys- tem could pay by itself.

Overall, the system uses intelligent technology to help store managers use less time to achieve more accuracy in picking the right fit. Similar applications can be found in the Brooks Group in Greensboro, North Carolina, and Finish Line, Inc., a leading

athletic retailer based in Indianapolis, Indiana. • QUESTIONS FOR THE OPENING VINGNETTE