01Holiday Employees Who Create Bad Customer Experiences Cut Sales by 50%
Bad management of temporary holiday employees leads to bad employees who create bad customer experiences. And according to research, bad Christmas shopping experiences can cut customer spending in half not just during the Christmas holiday shopping season, but for the rest of the year as well.
Gallup research has found that customers who are aligned with a brand promise spend twice as much customers who have no strong relationship with a company or a brand. So a bad Christmas holiday shopping experience with a a badly hired, badly trained, badly managed holiday temp employee will turn a brand advocate customer into a neutral or negative customer. A customer who is neutral or negative about a retail company will spend half as much during the critical Christmas holiday shopping season and beyond.
The bottom line is that retail employers can't afford to abandon hiring, training, and employee engagement strategies at any time of year, but particularly during their busiest time of year.
02Lower Hiring Standards For Retail Holiday Temps Is a Costly Mistake
A common and costly mistake that retail managers make is to lower their hiring standards for retail holiday temps. The erroneous thinking behind hiring holiday temp employees who normally would be unqualified or disqualified is "They're not going to be around that long, so how much damage could they do?"
According to the Society for Human Resources Management (SHRM), the cost of lowering hiring standards and making bad hiring decision is five times what the bad worker is paid. These bad hiring costs are not only measured in terms of advertising, interviewing, and training, but also account for the negative effect that bad holiday temp employees can have on the morale and engagement level of the full-time employee team, not to mention the cost of a bad customer experience.
Basically any choice a retail manager makes with a holiday temp because "they're not going to be around that long" is going to prove itself to be a costly mistake. Just because "they're not going to be around that long" is used as the excuse for bad retail holiday temp hiring decisions doesn't mean that other employees and customers are going to excuse it.
03On-the-Job Training Cost Cuts Increase Shopping Cart Abandonment Costs
One of the biggest mistakes retail managers make with season holiday temp employees is to use on-the-job training to cut training costs. In order to reduce training time and costs, many retail managers will throw newly hired holiday temps out onto the sales floor immediately in order to learn their job while serving real customers.
This irresponsibly premature on-the-job training forces customers into involuntary participation in an employee's learning process. On-the job training almost always diminishes the customer experience in some way, and is never appreciated by the customer. But forcing a customer to suffer through the low side of a temp employee's learning curve during the busy Christmas holiday shopping season is openly despised.
"I can go elsewhere" has never been more true in the retail industry than it is today. Customers can literally "go elsewhere" by mobile shopping and purchasing the item in their hand while they're standing in line waiting for a poorly trained, unmotivated seasonal holiday temp to get up to speed with their on-the-job training.
This is the in-store equivalent to the online phenomenon of shopping cart abandonment. A study by Business Insider estimated that $4 trillion of merchandise was left unpurchased by online shoppers in 2014. And while there's no easy way to quantify the amount of sales are lost when frustrated customers change their minds about making a purchase in physical stores, when 75% of Internet shoppers are willing to walk away the items in their online cart, they're predisposed to exhibiting shopping cart abandonment behaviors in physical stores as well.
The real cost of training is not measured just by the hard costs of wages and materials. The real cost is measured by the lost sales that a badly trained seasonal temp employee causes.
04Bad Fit Holiday Temps Create Tension, Turnover, Customer Disengagement
Sloppy hiring decisions with seasonal holiday temps most often results in bad fit employees who create tension in the retail environment for both employees and customers. If even one of your seasonal hires disrupts the chemistry and flow a good employee team, it can diminish workplace engagement, and perhaps even cause employee turnover.
Often, however, the reason a holiday temp employee doesn't seem to be a good fit with the regular employee team is because the retail manager doesn't take the time to integrate temps into the employee team. The normal new hire rituals such as formal introductions, staff meetings, and after-hours social events are often abandoned when an employee's temporary status is predetermined.
It's easy for an us-them attitude to develop between regular long-term employees and seasonal holiday temps. If tension between team members escalates to the point that it is observable to customers, it most likely will cost the retail business sales.
In one study conducted by the Harvard Business Review, 80% of customers who observed employees being uncivil or rude to each other said they did not want to return to the business again. Considering that you may lose customers or long-term employees if temps aren't appropriately integrated into the employee team, the cost of a team-building activity doesn't seem prohibitive.
05Bad First Impressions From Seasonal Temp Employees Could Cost Customers for Life
The Christmas holiday shopping season is the time when every retail brick-and-mortar store and online shopping website has the opportunity to put itself in front of hordes of customers who are hungry to shop and buy. There's no question that holiday temps WILL make an impression on Christmas shoppers. The question is what kind of impression will those seasonal temp employees make?
As the saying goes, "You never get a second chance to make a first impression." And in the age of the empowered retail customer with unlimited choices and unlimited access, retailers will probably never get a second chance to make any kind of impression at all.
5 Most Costly Mistakes Retailers Make Managing Holiday Temp Employees
Because retail seasonal employees generally work part-time without benefits, hiring seasonal holiday temps is an essential and cost-effective retail management strategy for both small retailers and large retail chains. However, bad management of temporary seasonal employees can actually cost retail employers more than the hiring of temps saves because of the effect that bad employees have on both the employee and customer experience.
According to the most recent workplace research from the Gallup organization, bad management practices that lead to employee disengagement cost U.S. business $450 - $550 billion per year. Disengaged employees who then create bad customer experiences can cause a 50% decrease in customer spending.
It's not bad temporary seasonal employees that are the costly problem, it's bad management practices before, during, and after the holiday hiring that is costly.