During the COVID-19 pandemic it has been harder than ever to attract and retain dedicated and responsible staff members. Whether you own a restaurant, apparel shop or gym, it’s more important than ever to ensure you are following recruiting best practices. For this piece we investigate what makes Forbes’ Best Large Employer in 2019, Trader Joe’s, such a successful franchise and discuss how to apply these lessons to your business.
Trader Joe’s was ranked as having the highest customer satisfaction rating among supermarkets in the 2018-2019 period by the American Customer Satisfaction Index, and slightly more than 10 percent of Trader Joe’s employees have been with the company for 10 years or longer. Through academic studies, all employees of Trader Joes—from c-suite executives to on the floor “crew members”—scored exceptionally high in factors affecting enthusiasm, hard work, outgoingness, team and customer orientation.
One of the keys to Trader Joe’s success is hiring the right people and investing in them. Jon Basalone, President of Stores at Trader Joe’s in 2019 said: “we’ve been around for over 50 years, and we’ve never had layoffs. We stay true to what we know works for Trader Joe’s and our crew members. You combine that with the pay, benefits and supportive, fun environment, and people tend to want to stick around.”
Joe Coulombe, Trader Joe’s founder said: “the fundamental difference between Trader Joe's and all other retailers is the income level of employees.” Speaking about his dad, Joe said: “he loved and believed in his employees and he wanted to keep them. And the only way to do that was to pay them well.”
At Trader Joe’s part time entry-level positions can make up to $24.75 dollars per hour. This is nearly twice the highest average minimum wage in the United States. Store managers make around $100,000 per year. Company policy gives employees the chance for raises twice a year, which averages out to a 7 percent pay increase annually. A well-paid employee is a happier employee.
Additionally, Trader Joe’s also believes in promoting from within. 78 percent of Trader Joe’s supervisors started out in entry-level roles, and all store managers and Regional Vice Presidents are promoted from within.
How to Apply to Your Business: To create your staff wages, determine starting rates of local competitors and always set your rates above the average to attract high quality workers.
Instead of having to do one task all day, Trader Joe’s crew members perform a variety of tasks ranging from replenishing stock, to cashing people out, to cleaning. This variety keeps employees engaged and helps to prevent boredom.
"It's perfect because it breaks down your shift. You don't get tired doing one repetitive thing," said Ivetta Linnell, a former Trader Joe’s crew member.
“My first day at Trader Joe’s, I was being shown how to open a box and stock some frozen food, and someone came up and said, ‘Let’s go in the back — we’re having a tasting,’” said Basalone. “The whole time, I was thinking, ‘Am I supposed to be doing this? I feel like I should be at work,’ and the person training me said, ‘No, this is a part of it. We’ve got to learn about what we sell.’”
How to Apply to Your Business: Outline the variety of tasks that need to be completed by your workers. Make sure employees get time completing a variety of tasks rather than just being assigned to “cash register” for the entire shift.
Retirement Fund: Trader Joe’s makes a contribution equal to 10 percent of an employee’s salary to their retirement fund. This incentive is available even to part time employees as long as they work an average of at least 13 hours per week. Trader Joe’s automatically makes the contribution without requiring employee matching.
Benefits: Employees receive a competitive benefits package covering health, dental and vision care. Employees pay only a small premium with Trader Joe’s paying the rest. Employees receive paid time off as well, and there’s nothing like a good discount to keep your employees motivated. Trader Joe’s employees receive a 10 percent discount on store purchases.
"I've worked at other retail stores and the pay is a lot lower than TJs. We also get raises twice a year, the opportunity for a bonus, and the most affordable health insurance I've ever heard of (with a free gym membership!)," said a Trader Joe’s employee.
How to Apply to Your Business: Don’t have the budget to offer competitive retirement or healthcare packages? It’s not just monetary benefits you can provide.
“If the store’s doing really well some week, they would get us pizza or catering from local businesses to feed us,” relates the Seattle-area Trader Joe’s employee. “Plus, every year, we have a store party.”
Having friendly employees starts with who you hire. Trader Joe’s President Bryan Palbaum said that the company explicitly tries to find people that have “outwardly nice” personalities since it is hard to “train someone to be nice.”
One of Trader Joe’s former CEOs, John Shields, said that he wouldn’t hire someone if they didn’t smile within the first 30 seconds of an interview.
The nice and friendly people Trader Joe’s hires attracts similar people to work there creating a positive working environment.
“I feel like they really look for a person who has their own uniqueness, but is still a good people person,” says an employee of a Seattle Trader Joe’s, who asked to remain anonymous. “They don’t hire someone who’s just there for a paycheck. You don’t have to be the most outgoing person, but able to give that personable, insightful customer service. If you prove to them in the interview process you have that type of energy, you’re pretty much set.”
How to Apply to Your Business: Require at least a three-step interview process with offbeat questions like, “What’s your favorite color?” or “Do you have a sense of adventure?” to gauge jobseekers’ personalities.
“It almost doesn’t feel like work—it feels more like we’re hosting a party and the customers are the honored guests. You get to meet and work with some amazing people, whether your fellow crew members or customers, and the interaction and energy that comes from that just makes it a really great place to work,” said Trader Joe’s President.
Instead of the automated convenience and variety epitomized by online delivery services like Amazon, Trader Joes invests in the human side of grocery shopping, facilitating the kind of authentic interactions that build brand loyalty.
“We want to set the tone that we’re not just a grocery store. We want to give customers an experience you can’t get somewhere else,” says the Seattle Trader Joe’s employee. Crucially, their philosophy manages to prioritize this experience without sacrificing employees’ sense of personal satisfaction or individuality. “They don’t want us to be that cookie-cutter type store or company that’s lying to try and make money.”
How to Apply to Your Business: Consider having your employees make handmade custom signage labeling products throughout your store. Each location should employ its own art team devoted primarily to giving the space its own unique visual personality as well.
Employees are encouraged to be themselves instead of fitting into a corporate mold.
"There's no script," said a Trader Joe’s employee. "As long as I make sure the customer is having a great time, and I'm emphasizing Trader Joe's values, I can talk to people about whatever I want."
Instead of controlling and authoritative supervisors, Trader Joe’s has managers that employees want to work for.
"Almost every manager I’ve ever had somehow made me feel like I could tell them anything, personal or otherwise— even though I didn't have a lot in common with them," said a former Trader Joe’s employee. "They did a lot of listening up front and opened up almost every conversation with asking what I think and then responding to what I said. I always felt trusted."
New Trader Joe’s employees are also empowered through training. Each worker gets at least a day’s worth of training from introductory videos and one-on-one sessions with managers.
Store managers are expected to go even further by attending TJ University, which runs two-day classes focused on leadership and team building skills that can apply in running the store and beyond.
How to Apply to Your Business: Make sure your employees stay informed about your latest offerings. Hold regular tasting panels for staff to sample new goods before they reach the shelves. This helps employees better answer customers’ questions and advise their shopping.
“They don’t want us to recommend new products just for the sake of it,” says a Trader Joe’s employee. “They want us to actually try it, and if we like it, we can say that confidently, but if we don’t like it, they want us to be honest.”
What Trader Joe’s teaches us is that organizations with unique cultures win big. If the culture is carefully aligned with both the organization’s own competitive business strategy and with the values of the customers, it can provide an effective defense against incipient competitors.
Such a strong and targeted organization culture takes time to develop and provides customers with a valuable and difficult-to-copy experience.
It is always more complicated for competitors to imitate who you are than what you do.
As with Trader Joe’s, you want to make your identity, and not just your products, your major competitive advantage. This takes not only dedication and time from your executive team, but also requires the appropriate analytics and technology to keep all staff members privy to stocking and checkout information.
You’ll need to have a robust point of sale (POS) platform to empower your employees as they are switching between various tasks. Revel’s POS platform is a top choice for a variety of retailers and they offer free demos to prospective customers. Click here to learn more about Revel’s cloud-native platform.