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Nationwide Retail Chain Saves $10.5M Annually By Promoting Internal Talent

Value Retailer Boosts Promotability of Hourly Employees by more than 100% after Implementing OutMatch Assessment

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For this nationwide retailer, low promotability at the hourly level led to higher recruiting costs at the management level. They needed to improve their ability to grow talent internally. To do so, they first had to build a strong hourly staff.

Company Quick Facts

  • Industry: Retail
  • Number of locations: 8,000+
  • Number of employees: 60,000
  • Solution: OutMatch Assessment

Internal vs. External Hires

Assistant store manager role:
  • Before OutMatch: 24% of hires were internal
  • After OutMatch: 50% of hires were internal
The company boosted internal promotions by 108%.

Challenge: Low Promotability of Hourly Employees

As a value store with a lean payroll, this retailer’s top concern was store coverage. For store operators, that meant hiring anyone who walked in the door, regardless of quality or growth potential. This resulted in a shortage of qualified talent for internal promotions, and forced the company to spend more money recruiting external talent for management positions. They needed a more proactive strategy for hiring.

Solution: Assessment Predicts Employee Success

The company partnered with OutMatch for a pre-hire assessment that quickly identifies candidates with the highest potential for success. Using data from current employees, OutMatch analyzed the characteristics that predict performance in this retail work environment. OutMatch then built a predictive, candidate-friendly assessment to identify candidates as “strong match” or “poor match” for the job.

Hourly Hires Promoted in 2 Years

Percent promoted from store associate to assistant manager:

  • Not Assessed (n=2,801): 7%
  • Poor Match (n=731): 6%
  • Strong Match (n= 133,362): 15%

Strong matches are 2X more likely to be promoted.

Result: $10.5M in Annual Savings

After implementing the assessment, the company found that out of nearly 137,000 hires, those who were identified as a strong match for the job were more likely to be promoted than others. Fifteen percent of strong matches hired into the store associate role were promoted to assistant store manager within two years. In the same time frame, only 6% of poor matches were promoted, and only 7% were promoted from the group of employees who were hired without taking the assessment.

Higher promotability among hourly employees greatly reduces the number of external hires required for the assistant store manager role. Before OutMatch, the company was only promoting a quarter of its hourly staff into this role. After implementing OutMatch, the company boosted internal promotions to 50%, which is an additional 5,263 promotions per year. Because an external hire costs $2,000 more than an internal promotion, this improvement saves the company $10.5 million in annual recruiting costs.*

  • Improved promotability by 114%
  • Additional 5,263 promotions per year
  • Annual savings of $10.5M

These results clearly show that using the OutMatch Assessment to identify and hire strong matches greatly improves the pipeline for internal promotions, and delivers significant cost savings to the business.

*Using a conservative cost of $3,000 for internal hires and $5,000 for external hires.

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