Tuesday, 29 May 2012

Consumer confidence – Who the heck knows

I’m sitting on a plane reading the paper and thinking ‘does anyone know what's really going on in the economy?’ I’m reading the same paper and there are conflicting stories about the economy, interest rates and the direct impact that this has on consumer confidence and spending - which ultimately drives the economy.

The first story tells of the decline in advertisements for full time jobs and that Job advertising is down over 8% on the same period last year.

In recently announced figures retail spending was up 0.9% in March; this followed an increase of 0.3% in February on the back of growth in restaurants and cafe operations. The main decrease was seen in average food prices which dropped 0.9%,  the biggest drop in 30 years driven by competition between the two big supermarket chains.

In all of the stories they talk about current month and year to date stats but we all know that consumer confidence is driven by the press and is formed over a long period of time. The GFC hit in September 2009 and we have had three years of uncertainty and this doesn't turn around in 1 month or with 1 interest rate cut.

There is no question that consumers are happy with the recent RBA decision to cut interest rates but when the banks do not pass on the Interest rate cuts - what does this say to consumers?

Page 3 Contradictions
Back to the newspaper, three pages in, another commentator says we can expect a further .75% drop in interest rates by end of 2012, the other article says the 1 month increase in retail sales of only 2% will prevent any further reductions. I don’t know about you but I find this very confusing. It’s obvious that these commentators don't know what's going on, so what hope has the business world or consumer.

It’s the business world and consumers that are driving our economy and these types of mixed messages are confusing and are perpetuating the problem with both business and consumer confidence.

Looking to the future.
I recently met with 2 large national retailers who also mentioned that it is the most unstable economic times they have seen for many years and planning for the year ahead is almost an impossible task.

What will the future hold ? Who knows? Not the government. Not business owners and certainly not the media. I say we just get on with it!

Wednesday, 23 May 2012

Staff Turnover Survey

Recruitment fees always seem to come under fire and I often can’t understand this. The more I look at it, the more it is clear that this is just short sighted thinking. It is obvious to see recruitment costs because they are on a line in the P&L and stand out like dogs bollocks.

The flip side however is the cost of staff turnover, which by all accounts costs far more than basic recruitment fees so why does this go unnoticed ? Simple because it is not a line item in a P&L and the cost simply gets absorbed. Is this right ? No it is a short term approach to things.

To this end we wanted to gain some insights and help educate our clients as to the real issues at hand and the potential for even greater staff turnover and what they can do to reduce this .

In order to help with benchmarking results, Retailworld distributed a Staff Turnover Survey (STS) to the Australian Retail Market.

An unsurprising 44.4% of respondents have noticed a change in their staff turnover rate over the past 12 months. With murmurings of a double dip recession, an increase in minimum wage and consumers gripping their purse strings, successful retailers are implementing strategies to maintain top talent within their business.

The STS found that retailers had seen around 37% of their employees leave the business within the past 12 months.

A reasonably high turnover rate is expected given the part time & student nature that makes up majority of retail businesses, so it’s promising to see that Store Manager turnover was reported at a lower 26.2%.

As the war for talent becomes more competitive, businesses are realizing the value of people and around 45% are actually looking to increase their wage budget in the upcoming 12 months – a move that is aligned with restructuring to create and secure teams of top talent.

Although these results are realistic our counterparts across the Tasman are only reporting overall turnover of 31.4% with Store Managers at 14.6%. If you’re looking for advice on your staffing strategies for the year ahead send me a message.

- John Caldwell

Stats at a glance:
  • 37% - average staff turnover percentage in the Australian retail industry
  • 26.2% - average Store Manager turnover in the Australian retail industry
  • Lowest staff turnover = Recreation & Leisure sector
  • Highest staff turnover  = Jewellery and Fashion sectors
  • 56% of respondents had noticed no change in staff turnover rates in the last 12 months
  • 35.4% of businesses plan to hire new staff above their turnover rate in the next 12 months
  • 44.4% of respondents have had a wage budget increase in the last 12 months while
  • 66.7% of respondents have plans to hire new staff (across the business) over and above their turnover rate in the next 12 months
  • The lowest staff turnover rate recorded in the survey was 20%
  • The highest staff turnover rate recorded in the survey was 60%

Wednesday, 16 May 2012

Lessons Learnt from Yahoo

After four months in the business, Yahoo’s CEO Scott Thompson was uncovered as having falsely declared a computer science degree on his resume. Week after the discover Yahoo’s board of directors made the decision to fire Thompson and even look to drive out some of it’s own. The future of the business is uncertain and it’s leaving investor’s wondering how it will effect their potential earnings.

The problems from the allegation grew due to the opinion of top-level executives on his overall strategy. When the discovery was made, Thompson proceeded to blame a head hunting firm for altering his resume – which was probably his ultimate demise as they were able to prove otherwise.

To think that a global giant like Yahoo can miss something like this highlights the need for all businesses big and small to sharpen up their checking processes when hiring new talent and before opening the doors of their business to outsiders.

As a recruitment provider we see hundreds of resumes everyday and thousands of potential candidates each year which gives a bit of a 3rd sense; but that doesn’t mean we drop our processes, in fact, it makes us more aware.

Saying you have a degree that you don’t is not as bad as conveniently forgetting to tell someone you’ve been convicted as an Axe Murder, but it still shows a lot about the person’s character and highlights how far one sentence of lies can go.

Avoiding “Resumegate” in your business:
  • Have a compulsory application form with a clear disclaimer about true and honest information
  • Ask interviewees to bring supporting material with them– certificates, degree, passports etc
  • Ask questions. If you feel that something’s not quite right – make sure you get to the bottom of it
  • If it’s practical, test them (particularly if they need to do something like computer programming)
  • Check LinkedIn to make sure their profile matches their Resume
  • Always carry out at least 2 reference checks with questions prepared in advance. One reference is the most recent employer (it’s a good idea to do a quick LinkedIn look up on the reference check too).