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Entrepreneurs

Strategies to Survive the Tight Labor Market

One company's efforts to keep turnover to a minimum have helped provide consistent customer service.

September 06, 2000

With U.S. employees changing jobs on average every three years, most companies spend considerable time and money recruiting and training personnel. But Carolyn Nelson has found ways to keep employee turnover to a minimum at her Capital Office Products company, which caters to small and medium-size businesses. The personal service, stability, and cost savings that her high level of employee retention allow her have contributed greatly to her company's growth. Nelson was interviewed by freelance writer Karen E. Klein.

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We have to rely on value-added service to compete with the office superstores. One of those services is consistency in our staff. When customers call in their orders, they talk to me, my husband or Raquel, my office manager who has been with us since two months after we started the company.

When I have a first appointment with a potential client I tell them that instead of being on hold with the office supply stores, talking to a faceless stranger who is unfamiliar with their needs, they can call us and be on a first-name basis. They don't have to start the conversation by reciting their account number. They can talk to the person who knows what kind of toner they need and how much they ordered last month. Our customers really like the strong, personalized relationships they have with our employees, who are responsible for creating and maintaining a "person-to-person" connection with customers.

Without a doubt the single biggest reason for the success of our company is the employees that we have. Given the shortage of qualified workers in Southern California today, we would be hard pressed to find replacements for them. Since we started our company, more than half of the people we hired initially--two sales reps, an office assistant and a driver--have stayed with us. This stability has allowed us to do things that other companies can only dream about.

One thing we can do is plan our growth. We have grown the business in double-digit percentages each year. Because we don't have to deal with a constant turnover of employees, we can devote extra time and resources to expand our base of business.

Our recruitment cost is next to nothing. The fact that we don't have to constantly advertise or search for new employees saves us time and money. The money we save goes into an employee SEP-IRA program that we have established. Last year we put almost $800 into each participating employee's retirement plan. Our pay scale is well over average for similar size firms here. We offer the same types of benefits that larger companies have, but our atmosphere is different.

For one thing, we allow flexible hours when they are needed. Raquel takes her lunch hour when she needs to pick up her children from school. Although it is a busy time in our office, it is a compromise we are willing to make. In over five years of employment here, she has never called in sick. Recently, she had a baby-sitting problem so she had to bring her kids into the office a couple times and we worked with her.

Many companies have owners who say that their employees are like family, but in our case it is true. We expect everyone to get along because we want our customers to see a seamless connection from the office staff to the driver delivering supplies. If there is conflict, we resolve it immediately. We are very particular about bringing a new employee into our family.

One way that we recognize how highly we think of our employees is our philosophy of getting out of the way and letting them do their jobs. We offer a low-stress environment but we do expect everyone to do a good job, day in and day out. Our employees are responsible, caring people, and they understand their role is to take care of the customer. If they don't, someone else will. We have given our employees the authority and the responsibility to do their jobs. They are empowered to take care of the customer, from setting prices to resolving issues on the spot if there is a problem.

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