Do you know how much it costs to hire, train and retain a new employee? The numbers may amaze you. One self-storage employee may be a bigger expense than you realize.
Typically, our managers wear many hats: marketer, customer-service rep, salesperson, supply clerk, custodian, police officer and, sometimes, legal advisor. This type of position requires more specialized training to achieve proficiency. Corporate experts estimate that turnover costs for an $8/hour employee runs an average of $3,500 to $5,500 dollars. Considering the unique variety of jobs our managers are required to learn, our cost is probably thousands of dollars higher.
As a supervisor, it’s critical to do what you can to curtail this enormous expense. Proper screening, selection, training, counseling, retraining and a sound salary and bonus structure are critical to keeping a good employee around for a long time. The price of keeping one quality employee is far less than the cost of losing one.
Screening and Selection
Finding good employees is harder than most people think. First, most facilities place employment ads that start with something like: “Local self-storage business looking for ...” This approach may dissuade potential candidates, as most do not understand the business and have negative perceptions of the industry. They may envision a rundown garage-style property. They don’t realize we now operate in retail-focused office environments that are clean, safe and technological.
The storage industry has evolved over the years. When placing an ad for employees, don’t mention storage. Instead, advertise for people who offer sales and customer-service skills. This approach will result in a larger response to the ad and bring in candidates with the traits you need.
During the initial screening phase, conduct a phone interview. Be prepared to ask and answer questions. General inquiries will cover salary, benefits and job duties. I like to open an interview with, “Tell me a little bit about yourself.” This opens candidates up to talk so you can get a sense of their personalities.
Look for a friendly, enthusiastic, well-spoken individual who is interactive on the phone. Keep in mind this is the person who will give customers a first and lasting impression of your company. Phone performance is critical in our industry. You can spend thousands of dollars on marketing, property features and amenities, but the most prominent difference between you and competitors will be your employees.
You can train an individual to operate the facility, management software and security system, but you can’t change his personality, voice, or what I refer to as “inner-personal skills.” I choose employees based on personality first, then their skills. If an employee cannot impress potential customers on the phone, he isn’t the right person to sell your products and services.
Training seems to be a difficult task for many operators. It should be organized and concise with set standards and a follow-up schedule. Employees never get it all right the first time. The biggest mistake supervisors make during training is failing to reinforce what employees have learned and determine what areas need more focus.
Retraining is a must to ensure all basic requirements of the position are clearly understood and executed according to company policies and procedures. Each property or business must have an effective operations manual that can be followed and referenced as necessary. Following are some other effective suggestions:
- Find the right venue. The property is not the best place to do your initial training. Most sites are too busy to conduct effective training sessions. If you are covering the store while training, there are usually too many interruptions for optimal comprehension of the material.
- Use your brightest star/educator. Don’t delegate one of the most important tasks to an employee who is leaving the company or a mediocre staff member. Select someone has the knowledge and skill to train others. Not everyone is capable. If your company is large enough, you may want several people involved in the training process.
- Be prepared and give homework. Use an operations manual or training guide to thoroughly cover the material to be taught and make sure the material is up to date. It’s difficult to teach policies and procedures if no manual is available. Consider using other resources, such as a checklist of topics to be covered. For homework, have the trainee read sections of the manual or listen to sales-training tapes. Finally, don’t delay scheduled training sessions. In the absence of guidance, employees will quickly learn bad habits that are hard to correct.
- Follow through. Train employees on the most important skill sets first, emphasizing sales and service. Never train on the computer on the first day, as most employees will become singularly focused on the technology and miss the most important part of the job. Make sure the material you cover is clearly understood. Stop periodically and check employees’ comprehension. Don’t wait until the end of a session and realize they got off track or confused. Set and enforce standards. Tell them what you expect and how you are going to evaluate their job performance.
- Evaluate. Assess employees’ performance and retrain them as necessary. Conduct “maintenance of behavior” checkups. Maintenance of behavior is anything that keeps an acquired skill or knowledge up to a performance standard. There’s an old adage that says, “What gets measured, gets done.” If you don’t measure your results, you won’t know how employees are performing and what corrective action is necessary.
Well-trained employees will be satisfied, confident and competent. When they feel sure of their ability to rent units, sell merchandise, and operate the computer and security system, they feel good about themselves and enjoy working for you. This encourages them to stay longer. Competent employees also create fewer problems and mistakes, which means fewer complaints from customers and supervisors. All in all, training and follow-up are important to a healthy work environment.
Counseling is an often missed area of the employer-employee relationship. Positive feedback and constructive criticism are essential. Leaders and supervisors regard this process as a necessary but time-consuming process. If you care about the quality of your facility, evaluation of personnel for maintaining standards or improving performance cannot be overlooked.
Employees have a better chance of improving their performance if evaluations are given fairly and with care. Many people are interested in the effectiveness of their skills and are willing to focus on constructive criticism. But they expect their supervisor to be fair in his observations and suggestions for improvement.
Feedback on the quality of one’s work, good or bad, will help an employee be more successful. You must acknowledge excellence as well as poor performance. Explain the employee’s strengths and weaknesses. Provide suggestions for improving in weaker areas and encourage him to continue in areas of outstanding performance. Then listen to his comments and end with simple recap of the conversation.
Counseling should be performed at least once per month. A mere 15 to 20 minutes of your time shows you care. Employees will also respect that you are there to help them improve, not to threaten or punish.
This particular subject is often debated in the industry. The most commonly asked question by owners and supervisors is, “How much should I pay my managers?” Simply put, your wage and bonus plan should provide reasonable compensation based on the following factors:
- Size and income of the facility
- Employee knowledge and experience
- Level of responsibility for the particular position
- Number of employees being supervised Job performance
- Geographical location of the property (metropolitan, rural, etc.)
If your manager operates a facility in downtown San Francisco, his compensation package will be very different from that of a manager in Poteau, Okla. A large facility with four to five full-time employees and 900 units may pay a manager $40,000 to $50,000 a year, while a manager of a much smaller, 350-unit facility with two employees may receive less than $25,000 a year.
I recommend a compensation package that consists of 70 percent to 80 percent in base pay and 20 percent to 30 percent in bonuses. The total package should be an achievable goal. Incentives are the most effective way to get performance out of your employees. Set goals and provide the motivation to achieve greater results. Delinquency rates, economic occupancy and telephone-sales scores are but a few things to use as criteria. Most important, compensation should be reviewed annually.
How you pay your managers will have an impact on their willingness to work harder and stay longer. When was the last time you reviewed your employees’ wages and benefits? Would you be able to live on their salaries? Sometimes, we ask a lot of our people but fail to pay them what they’re really worth or even give them a pat on the back for a good job. A heartfelt “thank you” goes a long way, as does a day off, a surprise bonus or tickets to a show. Your employees simply want to know you appreciate what they do.
Retention of good employees is a problem facing every business. How we introduce them to our company, treat them while they’re employed, and pay them for their hard work and expertise is important. Providing them a positive business environment is key to starting a long-term relationship. Training staff and ensuring they understand their duties and responsibilities also goes a long way.
An old proverb says, “Give a man a fish, and you feed him for a day; teach him to fish, and you feed him for a lifetime.” Is your training program feeding or teaching employees? Think about it!
Thomas Krendl is the CEO of SkilCheck Inc., which has specialized in auditing, property management, feasibility studies, sales training and consulting for the self-storage industry for 20 years. For more information, call 800.374.7545.