Customers as Employees

By Apr 1, 2007
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Your best job candidates might be right in front of you.

Home organization and storage retailer The Container Store likes to be known for approaching retail differently. And according to recruitment director Karyn Maynard, the same approach also applies to The Container Store’s recruitment strategy.

“We have almost never needed to use an executive recruiter; we rarely run newspaper ads,” Maynard says. Yet she typically has no problems filling positions in the company’s 38 stores across the country, or at the corporate headquarters in Coppell, Texas. 

Her secret? The Container Store hires its customers. 

Experts say that recruiting customers is convenient and cost-effective, and it brings in high-quality candidates who are already enthusiastic about the company’s products and services. For years, of course, department and specialty stores have used an employee discount to lure shoppers into part-time work, particularly during the holiday season. But today, creative employers are taking this recruiting tactic to a new level—and also taking it outside of retail.

Tapping Into Enthusiasm, Affinity 

The Container Store recognized the value of recruiting customers from the beginning. “Our very first employee other than the founders was a customer,” Maynard says. “She thought it was an interesting store. One of the owners said, ‘Why don’t you come work here?’ And she thought, ‘I love shopping here,’ so she did [go to work there]. Now she is vice president of stores.” 

As Maynard’s story demonstrates, some of the best customer candidates may not even be actively looking for employment but will consider it if asked directly. This approach can be particularly helpful in a tight labor market, where high-quality candidates are hard to come by. This past February, the U.S. unemployment rate was near a five-year low at 4.6 percent, and experts project continuing low unemployment through the remainder of the year. By targeting customers who aren’t actively in the job market, employers can boost the quantity and quality of their candidate pool. 

Experts say that by hiring regular customers, employers can also realize substantial efficiencies. “They are engaged by the brand, it’s a place that they align with, they see value,” says Diane Berry, managing vice president in Gartner Executive Programs’ human capital management content development group. “That’s absolutely helpful in attracting and retaining folks.” While there is a lack of hard research data in this area, experts say that former customers are likely to require less training and make an impact more quickly than other new hires. 

At outdoor-gear retailer REI, at least half of the sales force is drawn from former customers. “Our best candidate pool is our customers,” says Greg Medlyn, director of human resources for REI, based in Sumner, Wash. “It’s easier for us if [a new hire] comes with an affinity for what we sell and do.” REI’s employees need a “ton of product knowledge—it’s an awful lot to teach,” he says, and it’s a “big investment to teach about all that. If you come with some of that, it’s a big advantage.” 

In addition, customers may come aboard with some affinity for the corporate culture and values. At REI, customers are likely to be members of its unique co-op structure. Members receive an annual dividend and are regularly informed of corporate initiatives. Co-op members make ideal employees because they are already well versed in REI’s corporate culture, Medlyn says. “They’re already committed to the co-op mission. They [come in with] cultural buy-in and enthusiasm.”

Marketing Tactics For Recruiting 

Targeting customers isn’t difficult—it just requires a new perspective. The key is to look at recruitment as a sales and marketing campaign: Nearly any medium that can be used to encourage customers to buy can also be used to encourage them to apply for employment. 

In-store signage is the easiest way to inform customers that you’re hiring. Many employers continually display signs outlining the benefits of employment and directing customers to paper applications or an online applicant system. “We’ll change the header to ‘Now Hiring’ if we’re actively hiring, but we always want to take applications to build a file for future openings,” Medlyn says. 

“Bag-stuffers” are another common tactic; sales staff simply insert a recruitment brochure into customers’ bags with their purchases. REI, The Container Store and consumer electronics retailer Circuit City all use this technique periodically. 

REI uses a marketing stalwart, direct mail, to inform co-op members of “invitation-only” hiring events in their area. This approach allows REI to staff new stores quickly, sometimes in just a few hours. At one recently opened store, Medlyn says, half of the current employees are former co-op members, and another significant portion learned about openings from a co-op member. “We get a lot of [members’] kids, neighbors, nieces and nephews,” Medlyn says. “Between 25 percent and 50 percent of employees [in a newly opened store] are generated from that one contact.” 

Employers with a retail presence on the Internet can also use the company web site to encourage customers to apply. This is particularly effective for employers that also offer an online application function. When Southwest Airlines is hiring, its heavily used web site features a banner ad with a hyperlink to its careers page. “Our web site is geared toward customers,” says Jeff Lamb, SPHR, vice president of people and leadership development at Southwest. “The cross-promotion is very strong. We get a lot of customers … through the web site to apply for jobs. The web site is really the only way we accept applications now.” 

Any corporate event can be seen as an opportunity to recruit. “We do thousands of hours of community service projects, outreach, special events programs; we’re always out in the field doing clinics,” says Medlyn. And at those events, he continues, “we’re always sure to get the message out about recruitment.” 

Making Employees Recruiters 

The most successful customer recruitment programs reinforce the message with personal communication. To accomplish that, sales staff must be trained to recognize customer recruiting as part of their job description. 

“We do a lot of training with employees about just that,” Maynard says. Container Store employees, she explains, are encouraged to say that “if you love shopping here, you’d love working here; if you’re spending this much time here, why not work here and get a discount?” 

To support their recruiting efforts, all Container Store employees carry “recruiting cards”—handouts the size of business cards—providing basic information about opportunities at the store and instructions for accessing the online application site. “People carry them in their aprons,” Maynard says. “It’s part of our dress code.” 

This strategy can work well outside of retail as well. At the Holiday Inn Cincinnati Airport in Erlanger, Ky., human resource director Lorraine Sanz periodically has provided all hotel employees with business cards bearing the message, “I love my job—do you?” 

“Sales managers had them, everyone in the hotel had them. I had 130 mini-recruiters,” says Sanz. “As we interacted with guests and outside the hotel, we’d hand them out.”

Play Up the Perks 

Current employees can be excellent recruiters because they are credible sources of information about the work environment—and the benefits of the job. Maynard says employees are encouraged to ask themselves why they love working at The Container Store—and then to tell customers. The employees typically mention benefits such as flexible scheduling, a fun working environment in which they feel valued and the employee discount—all points that are likely to resonate with customer candidates. 

Most retailers offer an employee discount, which can be a huge selling point for customers. But other industries may have other perks to spotlight. When Southwest is hiring in a particular location, gate agents and customer service agents don T-shirts bearing the message “Work With Me—Fly For Free.” At Holiday Inn Cincinnati Airport, the discounted room rates at Holiday Inns around the world are part of any recruiting conversation. 

Benefits are another big selling point. At REI, many co-op members are motivated to apply for employment because of the company’s attractive benefits package, which offers health coverage to all employees regardless of the number of weekly hours. Medlyn says this benefit is particularly attractive to older workers who have no retiree health benefits and have not reached the Medicare eligibility age of 65. 

Of course, employees are more likely to recruit customers if the initiative is linked to a strong employee referral program. At The Container Store, employees are encouraged to write their name on any recruiting card that they give to a customer, so they can get credit for the referral. Referring employees receive a monetary bonus of between $200 and $500 once the referred applicant is hired and finishes a probationary period, depending on whether the recruit is a full-time or part-time employee. After REI recently doubled its employee referral bonus to $100 per hire, employee referrals skyrocketed by 850 percent. 

The direct communication with customers can also yield valuable information. Maynard says that customer feedback led The Container Store to change its scheduling practices. “We heard loud and clear a few years ago that we had lots of customers who wanted to work for us, but they wanted to work around their kids’ school or [they wanted to] work a few nights a week,” Maynard says. “We listened to what our customers had to say.” As a result, The Container Store adapted its scheduling procedures to provide more flexible options, which helped The Container Store attract customer candidates who otherwise would not have applied.

High Quality, Low Cost

Recruiting customers not only brings in high-quality candidates but also is far more cost-effective than traditional recruiting methods. Even the most robust customer recruiting program’s cost per hire is typically a fraction of the cost for newspaper advertising and job boards. 

Medlyn says that REI spends less than $100,000 recruiting about 4,000 people each year for its 80-plus stores. “It’s a cheap date,” Medlyn says—about $25 per hire. Newspaper ads and job board postings, by comparison, can cost several hundred dollars per hire. Medlyn says that for a recent new-store opening in Cranston, R.I., he spent around $5,000 to send a direct mailer hit to every REI member in the area, drawing four times more applicants than the store required.

A Caveat, Not an Obstacle

Customer recruiting doesn’t work for every type of job opening, of course. The strategy is best for positions that don’t require specialized skills or experience. “We can do broad strokes for retail sales,” Medlyn says. “But if we’re looking for a specific skill set that isn’t necessarily trainable, we don’t know who to target [among our customers]. We know that they shop our stores, but we don’t know their profession.” 

But experts say that the technique can still work for more highly skilled positions. Sanz’s recruitment card campaign at the Holiday Inn Cincinnati Airport netted a sales manager who had formerly been a meeting planner for one of the hotel’s biggest clients. And even for positions outside of sales and service, customers can still be a rich candidate pool. “Any position where the employee and the customer have mutual respect and understanding of each other’s roles, that customer is a good target for recruiting,” says Berry. 

Employers say it’s difficult to track the source of all hires accurately. But experienced HR professionals are confident that their customer recruiting efforts pay off. When The Container Store was started, the founders “really had such an incredible focus on the value of people, employees and customers,” Maynard says. “They knew that the relationship they would build with customers would lead to finding great people to work with them.” Nearly 30 years later, Maynard adds, that is just what happened. “I absolutely know that the vast majority of our employees were customers first.”

Jennifer Taylor Arnold is a freelance writer in Baltimore.

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