What's Happening?
Family Express, a convenience store chain based in Valparaiso, Indiana, is focusing on labor retention strategies to reduce employee turnover and maximize labor efficiency. At the National Association of Convenience Stores (NACS) Show in Chicago, Alex
Olympidis, President of Operations for Family Express, highlighted the importance of retaining employees, noting that turnover in the convenience store industry typically ranges from 120% to 150%, with a cost per separation of $4,000 to $6,000 per employee. Family Express has managed to keep its turnover rate significantly lower at 40%, and aims to reduce it further. The company has adopted a tenure-based wage structure, starting at $15 per hour and increasing to $20 per hour by year five, to incentivize long-term employment. Additionally, Family Express employs a double-coverage philosophy to ensure efficient store operations and cleanliness, and emphasizes the importance of strategic scheduling based on transaction counts and customer traffic.
Why It's Important?
The strategies implemented by Family Express are significant as they address the high turnover rates prevalent in the convenience store industry, which can be costly and disruptive. By focusing on retention, Family Express not only reduces costs associated with hiring and training new employees but also enhances operational efficiency and customer service. The tenure-based wage structure provides employees with a clear path for career advancement, potentially leading to higher job satisfaction and loyalty. These efforts could serve as a model for other convenience store operators seeking to improve labor retention and reduce turnover costs, ultimately benefiting the industry as a whole.
What's Next?
Family Express plans to continue investing in new convenience stores across Indiana, with a $100 million investment in new-to-industry stores. The company is also focusing on developing the next generation of store managers through regular communication and training. These initiatives are expected to further enhance labor retention and operational efficiency. As Family Express expands, it may face challenges in maintaining its low turnover rates, but its strategic approach to labor management positions it well to address these challenges effectively.
Beyond the Headlines
The emphasis on labor retention and strategic scheduling by Family Express highlights broader trends in the retail industry, where companies are increasingly recognizing the value of investing in their workforce. This approach not only improves employee satisfaction and reduces turnover costs but also enhances customer experience and store performance. As labor markets tighten, such strategies may become more critical for businesses seeking to maintain competitive advantage.
