Reference no: EM133154393

The Container Store Hires Great Employees to Sell Empty Boxes

Empty boxes are big business for the Container Store (www.containerstore.com), headquartered just outside Dallas in Coppell, Texas. Founded in 1978, the company has grown to 67 stores nationwide and $800 million in annual revenue by specializing in storage products for home and office. From stacking bins and spice racks to trash cans and toy caddies, the Container Store sells a variety of functional, stylish storage solutions for every situation.

Kip Tindell, co-founder and CEO, attributes the company's decades-long success to the high caliber of its employees. "When you're selling empty boxes, you'd better have great people," he explains. Tindell's philosophy that "one great person equals three good people" has become the cornerstone of the Container Store's approach to recruiting, hiring, training, and retaining employees. To attract and keep enthusiastic people who enjoy working with customers, the company pays above-average wages-the average Container Store retail salesperson brings in $50,000-nearly twice that of the typical retailer. It also offers numerous benefits, including medical coverage, generous discounts on store merchandise, paid vacation time, and even pet insurance.

Not surprisingly, hundreds of people apply for every job opening. The Container Store requires as many as nine interviews before managers make a decision about which "great" candidate to select. Only 3 percent of the people who apply to work for the company end up being hired. Once they're hired, new employees enter a training program to gain the skills they need for on-the-job success. All full-time employees receive more than 260 hours of intensive training during their first 12 months. Part-time workers receive 150 hours of training during the first year. The purpose is to improve employees' product knowledge, teach them how to assess customers' storage needs, and provide the techniques and tools they need to suggest creative solutions for each individual's needs. The training also covers professional development topics to prepare employees for future career advancement.

Although retailers usually experience high turnover, the Container Store's turnover is exceptionally low, because it is so selective in hiring, rewards its employees well for performance, and provides a satisfying work environment. During the recent recession, when many employers were forced to cut costs through layoffs, the CEO reassured his employees that they didn't have to worry about being laid off. Rather than reduce its workforce, the company cut back slightly on some benefits and found other ways to lower expenses during the financial crunch. When the economy turned around and profits began to rise, the Container Store restored employee benefits to their former levels. It also embarked on its most aggressive expansion ever, opening six new stores in a single year and hiring hundreds of employees to fill the newly created sales positions.

The Container Store's no-layoff policy is only one way it proves how much it values its employees. Following the principle "communication is leadership," the retailer practices transparency, allowing employees access to most types of information except specific details about what individuals are paid. Not only do employees have the information they need to do their jobs, they can get a big picture overview of the company and its challenges and accomplishments. Thanks to its reputation for putting employees first, the Container Store has been named many times to Fortune magazine's annual list of 100 best companies to work for in America.*

Questions

What effect does low turnover have on the Container Store's ability to forecast human resources supply and match supply with demand?

Do you agree with the Container Store's decision to allow employees access to all kinds of company information except individual compensation? Explain your answer.

If you were interviewing applicants for a sales position at the Container Store, what questions would you ask, and why?