By Jan van der Hoop

I had a conversation recently with a major Canadian retailer that is seriously missing the boat in terms of their response to the opportunity they are facing in this economy. Here’s the gist of the conversation:

Originally met with them in January and they were very keen on presenting us as a solution for better hiring at store level. We scheduled a demo for late February. In the
interim, corporate HR and reps from the field held meetings to plan out their HR/OD
initiatives for 2009

When we came back together in February, I asked about the outcome of the planning meetings – not surprisingly, their focus in this economy is off hiring (seems the doomsday
scenario of skills shortages has suddenly gone away as bankers and brokers are
suddenly willing to stock shelves). No, their focus for 2009 is on Retention.

Cool, I said, we can help with that. We have tools that will help their store
management teams decide which employees they most want to hang on to, and who to
position where in the operation.

“What do you mean?” was the response

Well, you and I both know that every one of your stores has its share of A, B
and C players. Seems to me the A’s are the ones you want to retain at all
cost; you want to develop your B’s and encourage your C’s to move up or
move out.

“Ummm, no”, they said. “That’s not the direction we have been given for
this year”.

Please tell me you’re not going to channel precious organizational resources
into retaining your poor producers!

It was a long and awkward silence… but yes, this is the path they are going
down.

We have loads or research that documents the “cost of average” – the cost
to the bottom line of an average performer vs. a superior one. It’s
staggering.

Those organizations who are holding their own in this economy are those who are
taking advantage of the temporary softening of the labour market and finding
productivity by “trading up” on the staffing front. They are looking for
good people in the wrong job, and placing them where they can shine. And they
are raising the performance bar now, while they can, because they aren’t
being held hostage by average and poor performers and the belief there’s
no-one better “out there”.