Workforce.com

Lowe's Builds Its Employment Brand

January 10, 2007
L owe's, the second-largest home improvement retailer worldwide, opens a new store every three days and recruits more than 60,000 employees a year. The monthly recruiting average includes 130 new hires for the corporate office in Mooresville, North Carolina, and 5,000 for the 1,442 stores scattered across the U.S.

   The Fortune 50 company employs a total of 210,000 workers in 48 states and pulls in $44 billion a year in revenue. With compound annual average sales growth topping 19 percent since 1994 and annual net income growth averaging 26 percent, the company is in hyperdrive, quietly outpacing Home Depot with superior service and newer stores.

   Although analysts predict that Lowe's will continue to steal market share from Home Depot in 2007, the entire $312 billion home improvement products industry is under pressure as the housing market continues to cool. Still, with profits rising for 23 consecutive quarters, Lowe's plans to continue new store openings in the U.S. and Canada through 2007, with its massive recruiting machine still moving in high gear.

   Catherine Keown, Lowe's director of recruiting, manages all recruiting with an internal staff of 35. Twenty-six recruiters are assigned to the company's headquarters to handle the full cycle of recruiting for the corporate workforce of 5,000, aided by two search firms for hard-to-fill positions.

   An additional nine recruiters work in the field to source managerial candidates for the stores and distribution centers. Each store, which typically employs 125 to150 workers, has one HR manager, who handles all hiring for hourly positions.

   "The store positions, which generally require a high school degree and some retail experience, are not difficult to fill," Keown says. "The corporate positions are more of a challenge."

   Lowe's meteoric sales growth and enviable earnings-per-share record reflect the company's success in building a strong customer brand. Keown has turned her attention to building an equally strong employment brand that will ensure a steady flow of top candidates for headquarters.

Illuminating weak spots
   Lowe's consumers know its stores for its wide, well-lit aisles and bright, easy-to-shop displays.

   "We want our recruiting tools to simulate our stores with a brighter electronic environment that will entice candidates to work for Lowe's," Keown reports. "We want new college graduates and professionals to look at Lowe's as a career destination."

   About 75 percent of all corporate-level candidates come in through the Lowe's Web site.

   To glean the information needed to build the employment brand, Keown implemented Bernard Hodes' QTrac recruiting and employment branding analytics in October 2006.

   "We wanted to gauge the effectiveness of the recruiting process and more fully capture the candidate experience," she says.

   QTrac is designed to measure the effectiveness of the employment brand and its impact on recruiting and retention. The goal is to provide measurements, analytics and benchmarks for gauging the ROI of employment branding efforts. Six Fortune 500 companies, including Lowe's and Bank of America, piloted QTrac in 2006—ahead of Hodes' national QTrac rollout in January 2007.

   QTrac uses a new-hire survey that covers every step in the recruiting process. The online survey takes 10 to 15 minutes and is administered to new hires after 30 days on the job and again at 90 days, 180 days and 365 days to capture the new hire's experience with the company four times during the first year of employment.

   "QTrac allows me to see how the recruiting process impacts candidate perceptions of the company, and confirms our internal research findings about the process and the candidates," Keown says.

   The point is to capture any weakness in the recruiting, onboarding, training and new-hire experience that HR needs to address to ensure effective recruiting and retention. Lowe's is now using QTrac for all corporate hires, and averaging an 85 percent response rate to the survey on a voluntary basis.

   "The first 30 days are critical to retention," says Bradley Savoy, director of strategic development at Bernard Hodes. "The first 90 days are a key point for referrals. The six-month and one-year surveys capture the full year of the employment relationship."

Tracking the relationship
   The survey for each time period asks different questions that are most relevant to a new hire at that mark.

   "We can map how a new hire's view of the company changes over the first year," Savoy says.

   Keown receives QTrac reports on Lowe's new hires each month and discusses the results with the business units to improve recruiting techniques and the candidate experience. After only two months of QTrac reporting, she gained information that her recruiting team could translate into tangible plans for improving the process.

   "For example, QTrac told us that candidates want more information about the company upfront," Keown says. "Throughout 2007, we will be revising our online career site to provide that information. The QTrac results allowed us to develop a stronger action plan to meet this need."

   Keown's overall strategic recruiting plan for 2007 is geared toward enhancing the candidate experience.

   "In addition to providing more information about the company upfront, we will try to make the candidate experience more like the customer experience," she says. Changes in the company's online career site are under discussion.

   Lowe's adoption of QTrac is part of a larger movement toward the greater use of analytics to improve recruiting and employment branding.

   "We've seen a progression toward analytics and a scorecard view in HR," Savoy says. "Over the past three years, I've seen a higher level of awareness in our client base about analytics. Providers are now stepping up to bring products to the market."

   In December 2006, ATS provider Cytiva Software launched a new analytics dashboard for its SonicRecruit system. The Recruiting Roundtable also launched a new recruiting dashboard available for its members.

   The ATS community has adopted analytics and dashboards, taking data out of ATSes and putting the information into graphic form.

   "Oracle has been offering HR dashboards for years," Savoy notes. "But one of the drawbacks with data from ATS is that recruiting professionals are inputting the data, and that may create bumps in what is reported. Most of the dashboards and analytics available are based on ATS data, which is only part of the picture."

   The push now is to offer companies more complete data on the effectiveness of the recruitment process and related data on the effectiveness of branding initiatives.

   "Companies like Lowe's and Bank of America are spending money to build their employment brand," Savoy says. "They perform very well and have deep experience in building their consumer brand, but the value proposition for the employment brand is quite different."

   The key indicators are the employment brand and the job brand, which consists of whether or not the job is what the new hire thought it would be. QTrac's analytics measure the ROI for an employment branding initiative and help validate the data coming in through the ATS on the quality of sourcing methods and other recruiting factors.

   The ability to pinpoint weaknesses in the recruitment and branding process hinges on detailed analytics.

   "For example, QTrac may report that candidates have problems in face-to-face interviews with specific hiring managers," Savoy notes. "A company can determine the value proposition for the employee and implement changes necessary to strengthen it."

   QTrac is also a retention tool. Survey questions on compensation and benefits, the working environment, the relationship with supervisors and other factors identify the top 10 areas of risk with respect to retaining employees. The responses to each survey question are graphed along with the initial baseline.

   The information that is collected and reported monthly through QTrac is also provided in more extensive quarterly reports. The benchmarking shows where the company is off the mark relative to competitors and companies in other industries.

   "The problems that clients are seeing through the use of QTrac are with the job brand and whether it effectively sells the job and clearly portrays what is entailed in the job," Savoy reports.

   QTrac strips off each layer of the recruiting process to undercut erroneous assumptions about new hires. For example, one question in the survey that is administered after 30 days on the job asks the new hires if they would be willing to recommend the company to a friend.

   "One client found that 95 percent of its new hires would be willing to recommend the company and refer friends, but the company wasn't tapping these employees for referrals until much later in their employment," Savoy says.

   The survey results launched a discussion about whether the company might ask for referrals as early as the onboarding process.

   "Companies still have a long way to go in obtaining data and then understanding its value and acting on it," Savoy reports. "HR executives can take data into the C-suite, but the challenge now is to show the actions taken as a result of the data and the results produced from those actions."

   Keown is ready to do just that as she builds the employment brand at Lowe's and tracks the impact of the effort on recruiting for the company's most important positions.