Value retailer reduces hourly turnover by 12% after implementing OutMatch Assessment
With over 8,000 locations across the U.S., this retailer’s top concern is store coverage. Facing high turnover and tough talent markets, the tendency was to ‘just hire’ to avoid staffing shortages.
Company Quick Facts
- Industry: Retail
- Number of locations: 8,000+
- Number of employees: 60,000
- Solution: OutMatch Assessments
90-Day Turnover Summary
- Not assessed: 59%
- Poor match: 60%
- Strong match: 52%
Not using the assessment for hiring is comparable to hiring all poor matches!
As a value store with a lean payroll, this retailer was having to constantly hire store associates, and retaining good performers was a challenge. In metropolitan areas, they compete with higher-end retail stores for quality talent, and in rural areas, they compete for limited talent in a hard-to-hire market. To avoid staffing shortages, the tenancy was to ‘just hire,’ regardless of fit for the role, but this approach caused a turnover problem, where more than half of new hires were leaving within 90 days.
The company partnered with OutMatch for a pre-hire assessment that identifies high-potential candidates without causing applicant drop-off. Using data from current store associates, OutMatch analyzed the characteristics that predict performance and tenure in this retail environment. OutMatch then built a predictive, candidate-friendly assessment to identify candidates as a ‘strong match’ or ‘poor match’ for the job.
Out of more than 130,000 hires, those who were identified as a strong match by the assessment turned over at a lower rate in the first 90 days of employment. Turnover was consistently higher among the other two groups: those who weren’t assessed (59%) and those who were identified as a poor match by the assessment (60%). Turnover among strong matches was 8 points lower, at 52%.
Looking at the difference in turnover across these three groups, the company realized that not using the assessment was comparable to hiring all poor matches for the store associate position. Hiring strong matches, on the other hand, reduced turnover in this position by 12%. With 80,000 hires per year, this reduction in turnover results in big savings for the company.
Over two years, using the assessment to identify and hire strong matches prevented nearly 10,000 early terminations and saved over $18M in turnover costs, compared to hiring without the assessment.*
*Using a conservative cost of $2,000 per termination