Would You Like A Smile With Those Fries?

Employee morale has always been a critical issue for retailers, but never more so than today. A variety of factors have left more workers feeling less loyal to their companies, and less connected to their jobs. In the widely followed North America 2006 Labor Day Survey by Adecco, a New York human resource services organization, 32% of the workers reported experiencing more on-the-job stress than they did a year ago.

"Rising energy prices, soaring health care costs, the cooling housing market and retirement concerns are impacting the psyche of the American workforce today, and companies should be aware that these pressures may be affecting their workers," said Ray Roe, president of Adecco North America.

According to some polls, the disconnect between workers and managers hasn't been this great since the last energy crisis in the mid-1970s. In 2005, The Conference Board polled a representative sample of 5,000 U.S. households and found that only half of all workers were satisfied with their job, and a scant 14% described themselves as "very satisfied." By contrast, when The Conference Board conducted this survey ten years earlier, 60% of those polled expressed satisfaction with their jobs.

The Young and Restless

The income group with the largest decline in job satisfaction, according to The Conference Board, was workers earning $25,000 to $35,000 a year, a primary labor source for the carwash industry. Complicating the employee challenge even further is the fact that younger people, who typically make up most of a carwash's workforce, are more likely to be dissatisfied with their jobs than older workers. A 2006 survey conducted by Harris Interactive for Randstad, a global staffing firm, found that Generation Y workers (born between the late 1970s and early '80s), are almost twice as likely as their Baby Boomer counterparts to take a sick day to relieve stress, and almost four times as likely to skip work to run a personal errand.

Companies have responded to these challenges by using technology to increase employee productivity, so they can achieve more with fewer workers. For example, the airline industry has reduced its dependency on labor by moving away from counter employees checking in passengers in favor of self-check-in kiosks. According to a study by Summit Research, this move lowers the cost of producing an airline ticket from $3.86 to 16 cents.

Another study found that adding self-check-in kiosks at a typical hotel can reduce front desk personnel staffing costs by 15%-20%, while also limiting the $6,000 or more that it costs each time front desk staff member must be replaced.

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Pain At The Pump Fuels Job Stress

Regardless of their age group, many workers are experiencing higher levels of stress on the job as a result of paying more at the fuel pump. A 2005 survey by Salary.com found that while workers' income was rising at a rate of 3.7% a year, the cost of commuting was increasing at a 50% rate. "Rising gas prices have become an effective pay cut for America's commuters," concluded the survey's authors.

Wayne Hochwarter, a professor at Florida State University's College of Business, studied the effect of rising fuel costs on job satisfaction and performance in 2006. His conclusion: "It is clear that the price of gas has caused significantly more stress at home, which is carried over to opinions of work."

According to Hochwarter, 43% of workers have cut back on recreational activities because of high gas prices, and 44% say they are now worried about making ends meet. High gas prices are cramping the lifestyle of lower wage earners, according to the professor, which in turn is casting a dark cloud over their work lives, making them less enthusiastic, less eager to help co-workers and less tolerant of minor workplace irritants.

Can't Buy Me Love

Are employees from Mars, and employers from Venus? Maybe, but one thing is certain, they often look at events impacting the workplace from different perspectives. Only 15% of the employees Hochwarter surveyed believed that higher gas prices had any impact on their employers' bottom line. This will undoubtedly come as a shock to the carwash operator or manager struggling to cope with energy-related issues.

Unfortunately, Hochwarter's findings reflect what many Human Resource professionals say is a widening gap between employer and employee views of the work place. In the 2006 Harris Interactive survey cited earlier, 41% of employers said their company was loyal to its workers, compared to 25% of employees. When asked to rate company morale, 55% of employers said it was "excellent/good," while only 38% of employees echoed this view.

As employers in an industry that depends on employees to maintain quality standards, increase average ticket sales and encourage repeat business, carwash operators must try to bridge this communications gap by maintaining a dialogue with employees and keeping them in the loop about the wash's performance. “If you don’t have your employees understanding the big picture, you just can’t execute it,” Carl Winston of San Diego State University noted in a business press interview.

Click here to learn how the SiteWatch reports can help you motivate managers and employees by providing them with a statistical snapshot of how they’re doing.

Communication also means making sure employees are aware of all of the good things that come from working for your carwash. This was the thinking behind McDonald’s recent TV ads, which aimed at selling the benefits of working for the quick serve restaurant chain to employees and potential employees.

The ads, which began airing in the fourth quarter of 2005, featured former McDonald’s workers such as singer Macy Gray and track star Carl Lewis touting the leadership and management skills they learned during their time under the golden arches. McDonald’s aired the ads as part of a stepped up program to bolster employee morale and reduce turnover, which averages over 25% for store managers in the quick serve industry as a whole. “We wanted to improve employee commitment and their pride at working at McDonalds,” said Larry Light, the company’s chief marketing officer.

McDonald’s can look to an independent study of Taco Bell to draw inspiration for its morale-boosting effort. Conducted by well-known Harvard Business School researchers James Heskett, Earl Sasser and Leonard Schlesinger, the study found that Taco Bell sites that were in the chain’s top 20% for employee retention were 56% more profitable than stores in the bottom 20%. The Harvard researchers maintain that sites with more loyal employees have more loyal customers, since the interaction with an employee is often the single most important factor in determining the customer’s view of a business.

But Money Still Talks

Although improved communications and other morale-boosting steps are important, money still seems to be the main motivator in the workplace. In a recent survey by Salary.com, well over half (57.2%) of respondents who were actively seeking a new job, cited inadequate compensation as the reason they were leaving their current position. This makes "lack of money" far more important than its two closest rivals, lack of opportunity (37.3%) or lack of recognition (34.2%).

As part of a program to improve the performance of its restaurants and increase market share, the Jack In The Box chain began offering medical, dental and vision insurance to hourly employees at its over 1,500 company-owned sites. The company pays a portion of the premiums for hourly employees who have been with the chain for at least one year. Jack In The Box Chairman and CEO Robert Nugent told Wall Street analysts that the "key to this philosophy is developing satisfied tenured restaurant employees who offer higher and more consistent levels of guest service."

The first year under the new employee motivating plan, Jack In The Box's net earnings increased 6.2%, same store sales went up 4.6% -- compared to a 1.3% decline the previous year.

A comparison of Wal-Mart/Sam's Club and Costco by Business Week found even more convincing results. Although the two chains have roughly the same sales, Costco accomplishes this with fewer locations and 33% fewer employees. As Business Week concluded, "Costco (has) one of the most productive and loyal workforces in all of retailing. Only 6% of employees leave after the first year, compared to 21% at Wal-Mart," which, as the magazine pointed out, "saves tons, since Wal-Mart says it costs $2,500 per worker just to test, interview and train a new hire."

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Start Off On The Right Foot And Keep Things Interesting

Companies that invest upfront in screening job candidates and training new employees are typically paid back in terms of increased employee tenure and productivity. According to Professor Christopher Collins of Cornell University, small businesses that implemented an employee selection strategy that looked at how well a candidate fits into a company's culture, as opposed to just looking at how well he or she can do the job, will have a much more productive and customer-friendly workforce.

In August, the Gevity Institute released a study conducted by Collins, which demonstrated that companies enjoyed an average 7.5% increase in revenues, a 6.1% jump in profits and a 17.1% reduction in turnover after implementing this selection strategy.

Once you select new employees, keep them busy. "Boredom" is frequently cited as a key cause of workplace discontent. According to The Conference Board, employees that say they have "too much" or "just the right amount" to do at work are more satisfied with their jobs than those that say they have "too little" to keep them occupied (73% vs. 32%).

Nice Guys Finish First

Running an honest, ethical business is not only the right thing to do, it's also smart when it comes to retaining good employees. A 2006 survey conduct by LRN, a provider of compliance management applications, found that over eight in ten workers (82%) said they would rather be paid less and work for a company with ethical business practices then earn a higher income working for an ethically questionable firm. Disagreements over company ethics often play a significant role in employee turnover. More than one in three workers (36%) said they've left a job because of ethical disagreements with the way the company did business.

So, set high standards for your company, select employees who fit in with this culture and keep the channels of communication open. If you do, chances are you'll be enjoying low turnover and high productivity next Labor Day.