Fit: the best defense against hard cost increases
The cat’s out of the bag. Hard costs are going up. The cost of commodities essential to the hourly space – cotton, food and beverages, metals, etc. – have risen, and while gas prices may be low today, there’s no telling what the future bring.
With their upward trend, it’s no surprise that hard costs are weighing heavily on hourly employers’ minds. In Snagagjob’s latest quarterly survey of hourly employers, 56 percent labeled increasing hard costs as “very important” or “extremely important” to their business.
When hard costs go up, businesses can look to compensate by raising prices, but in our current economy, a higher price tag could mean fewer customers.
Labor cost is one of the largest hard costs that a business faces, so once higher prices are off the table, some employers look to cut staff. But we’d argue that cutting staff could have the same ghost-town-inducing effect as price increases.
If you go to a skeleton crew and are unable to provide excellent customer service, you’ll create a poor customer experience. And Harris Interactive tells us that 86 percent of people say they’ve stopped doing business with a company after just one bad customer service experience.
This doesn’t mean that you have to accept hard cost increases and watch you bottom line dwindle. But you may need to change the way you hire.
The old-school, application-only method will deliver helpful information like experience, availability and references. But you’ll miss out on perhaps the most important information of all: will this applicant fit in my business and in this position?
Fit determines applicants’ engagement in their work, and engaged employees are productive employees who stay on the job longer.
The best way to determine fit is to build behavioral assessments into your online hiring process. We dug into the science behind assessments in our white paper, but the short of it is that assessments rate applicants against your business’s core characteristics to determine which applicants possess the qualities that will lead to success and engagement.
According to studies, following the suggestions from a 15-minute assessment can improve front-line sales easily by six to 10 percent per employee. (And that doesn’t include cost savings fueled by retention).
So while the cost of cotton or food may be out of your control, your approach to finding and hiring employees who fit in your business – employees who will deliver more and keep customers coming back – is completely up to you. What approach will you choose?
Hard costs increases are just one of many external trends impacting your ability to recruit, hire and retain a top hourly workforce. Check out our white paper to learn about other trends.