Engagement & Motivation

In an era when nearly 70% of U.S. employees report being “not engaged” or “actively disengaged at work¹, many companies are scrambling to determine their level of employee engagement and, if it's low, whether that's having a negative impact on their business.

Employee engagement - or how motivated staff is to perform their jobs - can impact businesses in different ways. Depending on the type of business and the employee role, the impact of low engagement levels can affect different business metrics.

Though poor engagement universally affects employee productivity and turnover rates, it can extend to a broader range of impacts, including everything from sick days taken to customer loyalty. For customer-facing staff, employee engagement levels affect their interactions with customers, impacting everything from customer satisfaction, customer loyalty, and even the company’s brand and reputation. For manufacturing businesses, low engagement correlates to higher rates of safety-related incidents. Similarly, across most businesses, absenteeism, sick days, and health claims (related to company health plans) are all impacted by employee engagement levels. In all of its various forms, poor engagement also correlates strongly to decreased sales and profits.

Regardless of the impacts you observe and measure, it’s important to understand these are the outcomes of poor engagement. And so any effort to improve engagement should start with analyzing why your employees are unengaged in the first place. A good understanding of the key drivers will arm you with the information needed to develop an action plan. Then, when it comes to business-casing the investment required to support your plan, you’ll know which metrics you can expect to impact. And you’ll be able to show the ROI from improving the metrics you believe you can impact through your action plan.

From analysis to action - national retail chain case study

Vision Source, a retail optical chain with 4,000 locations, realized that its franchise employees did not view themselves as “salespeople”. In particular, staff did not make a point of attempting to cross-sell or upsell patients as often as they could. The chain determined that this was largely due to a lack of system-wide sales training as well as motivational tools to focus front-line staff on making the effort to promote certain products and services.

Given this assessment, Vision Source put in place a system-wide sales motivation program that included online training, reference materials, and sales incentives.The impact was immediate. Employees suddenly had access to training that helped them improve their on-the-job performance and attractive incentives for selling certain higher margin products and services. Employees felt more empowered and motivated. And the result was a significant increase in the year-over-year growth rate.

Impact statistics from the field

As presented earlier, the impact of poor employee engagement varies by business, industry, and employee role. Here are statistics² from companies that have implemented employee recognition programs in which the focus is on recognizing and rewarding behaviours that reflect the company’s core values:

Engagement

90% of companies say it has positively impacted engagement, resulting in a more meaningful and happier work environment.

Retention

68% say it has positively impacted employee retention. The estimated cost of replacing an employee ranges from one to three times his or her annual salary and the average company loses about $1 million with every 10 professional employees who leave.

Safety

37% say it has positively impacted employee safety, resulting in reduced absences from work-related injuries, lower injury-rates, and lower costs associated with worker medical expenses, worker replacements, training, and insurance premiums. On average, $1 invested in injury prevention returns between $2 and $6 in direct savings.

Wellness

29% report a positive impact on health and wellness goals, reducing the number of sick days taken, paid sick leave and lost productivity.  Engaged employees are absent two-thirds less than the employees who are disengaged and unhappy.

Brand and Reputation

Organizations with 50% or more of their employees rating themselves as “engaged” retain over 80% of their customers.³ More highly engaged employees provide a better customer experience, which, in turn, promotes greater customer loyalty. In fact, companies in the top quartile of employee engagement experience a 10% higher customer rating than those in the lower quartiles. Improving the customer experience may pay for itself as U.S. brands are reported to lose approximately $41 billion each year from poor customer service.⁴

Cost Control

A high employee turnover rate correlates with inventory shrinkage. Inventory shrinkage is estimated to cost retailers a staggering $30 billion annually, and half of that loss, or $15 billion, is attributable to employee theft.

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Learn how your team could benefit from a recognition and rewards program! Book your Qarrot demo today!

With employee engagement on the minds of many employers and human capital professionals these days, we’ve taken it upon ourselves to scour hundreds of statistics from various studies and articles to come up with the 14 we find the most surprising.

These statistics concern not only the current state of employee engagement but the cost of low engagement to companies as well as the benefits of high employee engagement.

Current State of Employee Engagement

• 37% of U.S. accommodation and food services employees say they had or will quit their position in the current 12 month period.¹ (Retail, customer service, and hospitality organizations are designed around high-turnover: jobs are relatively easy to learn and new employees can be integrated fairly quickly. But, this strategy doesn’t eliminate the cost of “cycling through” staff.)
• 49,5% of U.S. employees are “not engaged” at work. (Worldwide, the percentage of engaged employees drops dramatically to 13%)
• 35% of the U.S. workforce said they’d look for a new job if they don’t receive a pay raise in the next year. ² (In U.S. tech-powered companies, 65% of employees are confident they can find another job if their salary expectations aren’t met.)
• 52% of the workforce is open to a new job opportunity.

The Cost of Low Employee Engagement to Companies

• 150% of a mid-level employee’s annual salary can go into finding and hiring their replacement. (400% for high-level or highly specialized employees. Those expenses cover advertising the vacant position, interviewing applicants, screening candidates, hiring, training...) ³
• 2 years is the average time it takes for a new employee to reach the productivity level of the person they replaced. (The onboarding process also costs the company; training, distraction for managers whose time for coaching and developing existing staff is removed.)

Employee turnover resulting from low engagement has other hidden costs: the process of training new hires can be a distraction for the current staff and, if turnover happens frequently, can ultimately demotivate those employees tasked with back-filling while the new hires come up to speed. This can have even more insidious effects with customers. Turnover amongst customer-facing staff can give the appearance of instability within the organization and ultimately can hurt customers’ confidence.

The Benefits of High Employee Engagement

• 80% of most organizations’ market value comes from intangible assets such as brand, quality of the workforce; its talent, passion, and commitment (A few decades ago, this value was almost exclusively based on tangible assets like machinery, products, and facilities.)⁴
• $2,400 is the average increase in profit per employee per year a company can reach with employee engagement programs.⁵
• 97% of the companies with good employee engagement levels (half or more highly engaged employees) report that engagement leads to greater productivity. 93% say that it plays a major role in the company’s capacity to meet its revenue goals. Overall, 82% of these companies report that high employee retention improves customer loyalty, which provides with a noticeable competitive advantage.
• 33% report a significant impact of engagement on profit margins, and 81% on revenue growth.⁶

Interestingly, highly engaged employees have both a positive impact on customer experience and, as a result, customer loyalty. A long-term study at Sears reveals customers who had a pleasant, pro-active or superior service experience are 10% to 30% more loyal than customers who have did not and would strongly consider purchasing again from a brand if they had a good customer experience.⁷

Regardless of the statistic, it’s clear that employers and human capital professionals are preoccupied with employee engagement for very good reason.

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Boost your employees' engagement and motivate improved performance with Qarrot - schedule your demo here!

In many businesses, motivating teamwork - or more specifically, motivating your staff to win as a team - can trump the pursuit of individual achievement and bring a higher level of success. In fact, a joint study by the International Society for Performance Improvement and The Incentive Research Foundation found that “Incentivized teams increased their performance by 45%; incentivized individuals increased their performance an average of 27%”.

This learning equally applies to retail stores, restaurants, and cafes. In many of these businesses, an emphasis on shared goals and rewards can lead to better results.

Here are a few areas where we think motivating teamwork leads to better outcomes compared to individual performance:

Lots of part-time staff

Motivating part-time staff to go above and beyond is a challenge in any situation. But if a business can successfully instill a sense of teamwork amongst its employees, even the part-timers are likely to feel motivated and do their part to help achieve the goal.

With teamwork, each member feels that they’re a part of something bigger than themselves. If one member doesn’t do their part, then they’re not just letting themselves down, but the entire team.

And when the goal is achieved the whole team shares in the success, not just one person. This avoids the possibility of demotivating employees who didn’t win.

Employees frequently rotate roles

In many retail businesses, employees tend to specialize in one area. However, in certain sectors, such as Quick Service Restaurants, it’s not uncommon for an employee to work the cash one day and to be in the kitchen the next. This rotation of tasks provides some healthy variety to staff, but it also requires that they work together to communicate, transfer knowledge, and share tips and tricks.

As a result, this type of role rotation is another prime candidate for teamwork. What better way to nurture collaboration and knowledge transfer than through shared team objectives and rewards? Staff will feel more motivated to ensure their counterparts are equipped to perform the tasks through their rotations and to help one another.

Serving the customer requires teamwork

Businesses where multiple employees are involved in serving the customer - cafes and restaurants, for example – are ideally suited to team goals and rewards. Because the employee who takes the order is usually not the same person preparing the coffee or the food, shared team goals and rewards can be essential to success.

Teamwork is key to innovation

The Society for Human Resource Management cites teamwork and collaboration as key ingredients to successful innovation. And team-based incentives are a great way of emphasizing and fostering collaboration amongst employees to produce innovation.

The SHRM goes on to add that team incentives also benefit organizations by focusing employees on shared goals, fostering teamwork that leads to better group problem-solving, improving peer-to-peer support, and cross-organizational performance.

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Visit us at Qarrot to learn more about motivating teamwork and rewarding your staff for winning as a team!

Is there a science behind making a sale? Here’s a rundown of foolproof ways to improve the sales performance of retail staff—and how to make these tactics stick.

1. Begin each shift with an optimistic outlook.
2. It can be easy for retail staff to get stuck in a rut, particularly after a day in which it was difficult to close a sale. Noted sales and retail expert Bob Phibbs is a proponent of staff “talking themselves up” before a shift. He even goes as far to say that employees should be mindful of what they’re watching or listening to before work, as it may affect their mood and have a negative impact on their sales performance.
3. Research has shown that when people perform interrogative self-talk, like ‘Can I do it?’ they outperformed people who simply talked themselves up in a declarative way.
4. First impressions are highly important at the start of any interaction, whether it’s a personal or professional one.
5. Retail staff only have a fraction of a second to make a good impression on shoppers. With such a short frame of time to work with, it’s very easy to completely lose someone and make them disengage.
6. To get someone on your side, be genuine and refrain from being pushy. For instance, allow them to speak first by simply asking them how they’re doing. Sharing something positive with them - for example, remarking on how nice the weather is, will led to organic small talk. Shopify points to research that indicates that five minutes of chatting increases the amount of value created during a negotiation.
7. Rehearse potential scenarios or interactions.
8. In the retail industry, quick-thinking and thoughtfulness can easily save a sales situation that has turned sour. Employees should be prepared to mitigate or resolve any conflicts or misunderstandings. Think about envisioning certain scenarios and how you’d react to them in the most professional way.
9. During a busy shift, it can be instinctive to quickly provide an answer without thinking it through, or simply brushing someone off because you’re serving someone else.
10. For example, if you don’t know the answer to a question, assure the customer you’re going to find someone who does. Simply acknowledging a concern or question and then finding a solution often goes a long way.
11. Be mindful of your body language.
12. While it’s certainly important to use discretion when speaking with colleagues and potential customers, it’s also equally important to ensure your body language conveys friendliness.
13. For instance, unclasp your arms and hands, as people who cross their arms generally look unapproachable.
14. If possible, greet someone with a handshake - Shopify cites research that proves that people are twice as likely to remember you if you shake hands with them.
15. Finally, maintaining a ‘power pose,’ (standing with arms and legs open) will give you a confidence boost and convey that self-assuredness to others
16. Cutting down on choices is key.
17. Steer clear of overwhelming potential customers with too many choices - Carmine Gallo, a communication and presentations expert, says that people’s short term memory can only retain three bits of information at a time. By providing shoppers with too many choices, it can run the risk of frustrating them to the point that they won’t buy anything.

Retail sales performance training

Many employees have their own style or technique of building rapport and ultimately selling to customers. While it’s great to see staff inject their own personality, it may be necessary to have them brush up on strategies or new best practices to keep their sales performance up to snuff.

Bob Phibbs notes that many retail staff are complacent and set in their ways, making them non-receptive to new training. In addition, staff may have no inkling or desire to learn something new, especially when they feel that they’re forced into it.

As well, front-line staff can feel that training and their real-world experiences are two vastly different things.

Tackling resistance to employee learning can be simple. Put an incentive system in place that not only encourages engagement with the training material, but also motivates staff to adopt the behaviours necessary to boost their sales performance.

Making the training process simple, effective and worthwhile for employees by attaching incentives will also go a long way in terms of employee retention.

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Discover more resources on employee engagement and performance incentives by visiting Qarrot.com!

Employee retention and motivation remain a constant problem for retailers and franchises. Here are the reasons why churn is so common in retail - and steps businesses can take to prevent it.

Mitigating High Turnover in Retail Businesses

Low employee retention among front-line staff in retail businesses is prevalent - according to a study by Hay Group, retailers reported a median turnover rate of 67 per cent in 2012.There are a number of reasons why retailers need to make a concerted effort to reduce high turnover among their front-line staff.

Why is high turnover so damaging to retail businesses?

For retail employees earning $10 per hour, it costs upwards of $3,000 to locate, hire and train a replacement, according to the Center for American Progress. Replacing several employees at once is costly financially, and dedicating resources to recruit new staff is a time burden that can lead to a disruption in day-to-day operations.

A 2015 Bloomberg article breaking down the tactics big box retailers are using to attract and keep front-line staff cites that new hires aren’t as productive as seasoned employees, “creating an efficiency cost that goes beyond the expense of finding and training a rookie.”

As illustrated both qualitatively and quantitatively, the repercussions of a front-line employee base with a high rate of churn are dire.

The causes of employee turnover in retail businesses

Here are some of the most common or most-talked about factors that lead to low employee retention rates in retail businesses:

• ‍Lack of recognition: Failing to acknowledge strong performance can lead to dissatisfied employees that are likely to quit. Coordinating a benefits program that rewards number of sales or revenue netted from upsells is a good place to start.
• ‍There’s a major disconnect between employee tasks and business objectives: Instilling a sense of ownership in front-line staff and conveying the importance of their role is essential. Retailers should give their front-line staff a clear picture of how their duties relate to overall goals.If a store is planning to promote a discount or special, it can be explained that the success of the campaign (which front-line staff are responsible for) is directly linked to meeting important quarterly or monthly revenue benchmarks.
• ‍There’s no variety in tasks: Employees who are assigned the same duty at each shift may get bored of the routine over time. Varying up training or responsibilities can prevent monotony and a feeling of stagnation.
• ‍Inadequate training may hinder an employee’s progress: If front-line staff don’t fully understand the nuances of a business, they may be unable to succeed at helping customers or effectively selling products.Writing about retail employee turnover, Bob Phibbs notes, “Just because an employee has previous experience does not mean they will understand what makes your store different.” It’s on the onus of an employer to properly and thoroughly train any incoming employees.
• ‍Lack of security or predictability: The nature of scheduling employees in the retail business can be volatile, but creating some sort of routine for employees can instill in them a sense of security. This could be a competitive edge among businesses that rely on employees calling in to be notified if they have a shift.

Retailers who take preventative measures to improve employee retention will enjoy less upheaval and consistent productivity.

Learn more about how to create and launch a network-wide program to reward and recognize your front-line staff!

Qarrot is a motivation, communication, and training platform for retailers and franchisers to motivate front-line staff to rapidly improve their sales performance.

Ottawa and Montreal, Canada—April 18, 2016; Qarrot, a motivation, communication, and training platform for retailers and franchisers, publicly launched today following a one-year closed pilot.

Qarrot’s mission is to help retailers increase sales by improving the performance of their front-line staff.  Easy sales data capture and tracking, training and communications capabilities, a catalog of hundreds of e-gift cards, plus proprietary gamification features make Qarrot a great fit for retailers with large, franchised store networks looking to boost their front-line staffs’ sales performance.

Vision Source, North America's largest franchise network of retail optometrists, piloted Qarrot in 2015 before rolling-out a full-scale program in January 2016 to their 4,000 locations across the United States with over 6,000 front-line staff participating on the sales performance platform.

Before implementing their front-line sales performance program powered by Qarrot, more than 60% of Vision Source patients were purchasing glasses or contact lenses from competitive providers and channels, resulting in hundreds of millions in lost sales opportunities.

“With Qarrot Performance, we launched one of the most successful and beneficial programs in the history of our company. Qarrot is my “go to” for incentive award programs," says Walt West, VP Practice Development, Vision Source.

By incentivizing franchise employees and rewarding sales performance, Qarrot helps retailers prevent lost sales opportunities and motivate their front-line to actively promote high margin add-ons . In the United States alone, lost sales opportunities cost retailers over $1 trillion annually.

Over $28 billion in spent annually by U.S. companies on non-cash incentives to motivate their employees. Of this, Qarrot estimates that $8 billion is attributable to retailers for front-line sales performance motivation.

Qarrot has been honing in on organizations with franchised networks in the L-SPARK Incubator. They’re now half-way through the four-month program designed to help early stage SaaS companies execute a go-to-market strategy.

With the help of the organization’s well-connected Directors, mentors and advisers, Qarrot has caught the attention of a large Canadian bank. The platform will be rolled out at all locations to incentivize staff to sell financial products.

About Qarrot

Qarrot Performance is a cloud-based retail sales motivation, communications, and training platform. With clients in both the United States and Canada, Qarrot is already motivating thousands of front-line retail employees at more than 1,200 store locations.

Visit us at Qarrot or email us at info@qarrotperformance.com to learn more!

About L-SPARK

L-SPARK is the only Canadian Incubator and Accelerator that focuses exclusively on Enterprise SaaS and cloud start-ups. With established relationships with key venture capital firms, angel investors, and the investment community at large, the goal is to support a deal flow of fundable Enterprise SaaS startup companies in Canada.  Visit us at www.l-spark.com, connect with us on linkedin.com/l-spark or follow us on Twitter @LSPARKGlobal.