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A Fallout Shelter

August 3, 2004
Related Topics: Retention, Featured Article, Recruitment, Staffing Management

When Aramark’s Refreshment Services division adds a new employee to its 2,200-employee workforce, the recruiting team takes a moment to celebrate--and then readies itself for the final recruitment battle.

    This division of giant Aramark, a Philadelphia-based food, coffee and vending services and uniform-outsourcing company that logged $9.4 billion in sales in fiscal 2003, is in the break-room business--providing food, beverages and other accoutrements to break rooms for more than 60,000 clients. For the Refreshment Services division, the cornerstone of its staffing strategy is not only to wow candidates during the recruiting process but also to keep up the sales pitch after the candidate has accepted an offer--right up until the moment the new employee walks through the door on his or her first day.

Hiring "A players"
    To some employers, this effort is overkill. Quite the contrary, says Tony Petrucci, human resources vice president for Refreshment Services at Aramark and a six-year veteran of the company. The "post-acceptance, pre-start period" is an acutely emotional time for a new hire, he explains.

    While career change is stressful for anyone, anxiety is often at its worst during the stretch between an accepted offer and the start date. It’s a time when many employers inadvertently lose touch with their soon-to-be employees. After all, the wining and dining of the recruiting process is over; training and on-boarding have yet to begin. To the new employee, though, this "silent" period is the ideal petri dish for worry, anxiety and doubt.

    Petrucci knows that his new hires are likely to feel the strain more than the average employee. "The people we typically hire are ‘A players,’ " he explains. Candidates have usually had a long tenure at their current position, since the division looks for people who haven’t job-hopped a lot. Because of that, Petrucci knows that his new hires might be "feeling the tug of emotional ties to their previous job," which could make them exquisitely vulnerable to a counteroffer from the employer that they’re about to leave. And since Refreshment Services is going after individuals who are in demand, Petrucci has no doubt that his would-be employees are entertaining plenty of glittery counteroffers from competitors. In fact, he says, "if the candidate doesn’t receive a counteroffer, we probably made the wrong hiring decision."

Fighting "hired remorse"
    The time after an offer has been accepted is the exact wrong time for any recruiting team to take a break, explains Elliot Clark, chief operating officer at Kenexa, an employment-process outsourcing firm in Wayne, Pennsylvania. If the doubts and counteroffers build in the candidate’s mind, and the new employer stays quiet, it might be just enough to turn a new hire into one that got away, he explains. It’s a situation known as "fallout," and it was an all-too-familiar occurrence during the tech boom of the late 1990s, when some companies experienced fallout rates as high as 10 percent, he says. As hiring picks up again, fallout is "a growing concern," says Bertrand Dussert, vice president of global services at Recruitmax, in Jacksonville, Florida. "We’re shifting to a candidate’s market from an employer’s market."

    Fallout can be very costly to a company: it brings all the cost of recruitment with no employee to show for it. But as Aramark has learned, fallout can be a remarkably simple and inexpensive problem to solve. "We know that if we can start to break down the emotional barriers after the offer is accepted, it can make a big difference," says Petrucci. "We have to counter the counteroffers, make them feel like they’re a part of the family before they start, and work to overcome the emotions that come with changing jobs." In other words, after an offer is accepted, Aramark Refreshment Services starts the battle for the new hire’s heart and mind.

"Excitement starts brewing"
    In truth, the advance work for the battle has been done before Aramark’s offer is even accepted, says Petrucci. After a successful first interview, the first salvo is a "PR Packet." This passel of info includes an upbeat video about Aramark, articles that have appeared in the business press, annual reports and other pieces of propaganda. "This comes to their home, and the articles are lying around, and the friends and family are starting to pick it up," he says. "An excitement starts brewing at home about Aramark."

    Total cost per packet: about $10 per employee, says Petrucci. If the division is hiring 150 a year, and conducts five to eight interviews for each open position, then at a maximum that assumes that each candidate gets past the first interview, it could cost Aramark $12,000 for this piece of its strategy. The video tacks on an additional $5, or a maximum of $6,000.

    After an offer has been made and accepted, human resources sends an internal e-mail to about a half dozen staffers, dubbed the "Ways to Wow" e-mail. This e-mail goes to all of those who were involved in the recruiting, and also to those who will be involved in training and on-boarding, including the new hire’s supervisor. The "Ways to Wow" is a blueprint for what comes next, says Petrucci.

    The first "way to wow" is another package, this time filled with what Petrucci calls "Aramark trinkets": pens, pencils, notebooks, Frisbees, footballs--all branded with the Aramark name. Also included is a package of gourmet coffee, naturally, since Refreshment Services is in the break-room business. That package is sent to new hires at home, with a "little letter welcoming them," says Petrucci.

    These are obviously not high-end gifts, and clearly are not intended to bowl over a new hire with the company’s generosity. But in Petrucci’s estimation, a new hire who’s out in the yard with the family playing Frisbee and football has less time to worry and entertain counteroffers. "We’ve started to address some of those emotional influences," says Petrucci. Total cost of the trinkets: about $15. With 150 new hires, that’s an annual cost of about $2,250.

Schedule ready before day one
    All the trinkets in the world, however, won’t reassure a wobbly new hire who is feeling insecure, says Clark of Kenexa. What helps the most is a continuous stream of human "touches" that help to put a human face on the company, and start to build loyalty. "If employees start feeling allegiance to the new employer, they’re less likely to entertain counteroffers," says Clark. "Also, more than that, it helps the person who’s fully decided to feel like they’ve made the right choice."

    Aramark Refreshment Services addresses this need in its next two steps, designed to help new employees start to bond with their new employer, says Petrucci. Aramark has a couple of the team members that new employees will be working most closely with call the employees at home. Petrucci says he wants the new hires to "start to feel like they’re already on board."

    Finally, a manager schedules a lunch with them before their start date, says Petrucci. For the manager lunch, "we’ve prepared the first several weeks of the on-boarding schedule, so the manager can give them the first few weeks and answer any questions they may have." More bonding over burgers ensues. (The tab at lunch is usually about $25, or $3,750 for 150 new hires.)

    "From there, we prep for the first day," he says.

Spend a little to save $750,000?
    The ROI on this very simple process appears to be quite high. Excluding staff time, a tally of the division’s expenditures during the stretch of time between offer and start date totals about $55 per hire, or $10 for the packet, $5 for the video, $15 for the trinkets, $25 for the dinner. That totals $8,250 annually. As for the payoff, "of the 450 people we’ve hired over that time frame, very, very few have accepted counteroffers," says Petrucci. He also credits the program in part with bringing down turnover in the sales force. Over the past three years, turnover has been reduced by 24 percent, he says. "This means we’ve had to hire 38 fewer sales consultants each year," which equates to $450,000 in savings on training and prevented an estimated $300,000 in lost gross profit from having a newbie in a sales position, he says.

    "I think the critical piece of all this is having an internal staffing team with quality people, working to overcome the emotion of changing jobs and making them feel like a part of your family before they start," says Petrucci. The more the warm feelings build before the start date, the less likely it is that you’ll have to head back into the recruiting process, and the more likely that you’ll actually have a new hire to train--and an employee to retain.

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