Ecommerce and Entrepreneurship Blog | About | Contact | Store

How to Really Know When and Where to Hire Next

Posted on February 12, 2010 by Jeff

Identifying the “Knobs & Levers” that drive your company’s profitability is only the first step in a successful business. The second, and perhaps more difficult, is fine tuning those knobs & levers for a desired result. One such knob or maybe it’s a lever, is salaries and wages as a percentage of gross sales.

Focusing on balancing salaries and wages as a percentage of gross sales generally starts with the question, “When the heck are we going to hire someone to support our growth?” A few thoughts…

Explore all Available Avenues

While piles scattered about your desk, burning the candle at both ends for days, weeks, months, maybe even years and skipping one or more meals a day all potentially point to hiring reinforcements, these are not sole indicators hiring will be the silver bullet. Redistributing responsibilities (we like to call these buckets) can provide the efficiencies necessary to effectively manage the do-to list. You may just find a current employee stepping up to not only take on the additional responsibility but thrive on the opportunity to shine. Technologies within your current infrastructure may be able to offer more than you are aware of.  I’m not the expert on this one, I simply keep adding to the “request” list and IT finds a viable solution when available. With that said it’s amazing what the techies around here can accomplish when they put their heads together and look for alternatives that positively affect the bottom line.

Paint the Picture and Back it Up

Do properly identify a focused picture of what you’re experiencing, providing hard data that brings clarity to you or your departments needs. Let’s say you’re experiencing an elevation in outstanding returns (meaning your warehouse is backlogged on the returns it is receiving and needing to inspect and process).

Paint the picture…

New returns come in as one of two things, cancellation requests or RMA (return merchandise authorization) requests. Our Returns Team reviews the request, plans a course of action, and moves the issue to the appropriate bucket. For simplicity, cancellation requests generally move on to the reorder or refund tabs to be closed while all RMA requests require the attention of the Warehouse Team. The Warehouse Team is responsible for creating call tags (Call Tags tab) to get the product back and subsequently all product inspections (Inspections tab). The tabs are named and uniquely identified in our administration system where the processing takes place. Once an inspection has been performed the return is either approved as is or adjusted accordingly; moving the return on to the Pending tab awaiting a supplier RGA, Damage Claims tab initiating a carrier damage claim, or to the Reorder or Refund tabs to be closed.   As you can see quite a few different scenarios can take place, but it’s a system that’s been pretty well refined over the years.

Provide the data…

RMA Metrics for New Hire

The simple snap shot shown above, while not indicitive of any real data will work for the purposes of what we are trying to accomplish for this post.  The chart provides the number of “transactions” open at the end of each day over a two week period by bucket. The work flow moving from left to right for each bucket has an identified outstanding target in red and subsequently highlighted anything greater than that target on any given day that it was not met.

In our example, with the exception of a single day the Returns Team is processing new cancellation and RMA requests within the target; driving the numbers down as they work through the week preparing for the weekend increases. A single instance can likely be attributed to a known issue or decision. The first Warehouse Team bucket (Call Tags) although significant is being met. This is an important step in the returns process as it sparks the products physical return. The first hint of bottle neck is at inspection, this is a time consuming, detailed, physically and mentally challenging step that sets the tone for the customer’s return experience. Although once the inspection has been completed the Warehouse Team technically moves the return back to the Returns Team via the Pending, Damage Claims, Reorder, or Refunds tabs, they’re not out of the spot light.  Once a supplier provides the required RGA from the Pending tab the Warehouse Team is responsible for shipping the RGA back to the supplier. Likewise, the Warehouse Team is physically involved in the damage claim if for nothing else than disposing of the damage once completed by the carrier. Finally, even a reorder has the potential to impact our Warehouse Team. That reminds me, they’re also responsible for inventory and order shipment including: domestic, LTL (light truck load), and international shipments. If you’ve ever shipped LTL or internationally you know you don’t just slap a label on it there’s a lot more that goes into it than just boxing up a product.

Analyze the Data

In this example if we’d looked simply at the Returns Team’s elevated outstanding returns we might have identified the need as an additional Returns Team member. With a more focused look at what’s being experienced throughout the returns process it becomes clear the Warehouse Team is struggling to support the volume moving through the numerous buckets they impact in the process. Assess and insure that the Warehouse Team is working as efficiently as possible taking into account their inventory, shipping, and returns responsibilities before moving on. Review available technologies for assisting those responsibilities. Pay attention to your bottom line, does the cost benefit impact to your knobs & levers more significantly impact the cost benefit of considering additional Warehouse Team support?

Connect the Need to the Big Picture

For our example:

  • Overwhelming responsibilities may be heading your Warehouse Team to an elevated turnover rate. This only accelerates the issues currently being experienced in the returns process.
  • Hiring warehouse support may also free additional time up from your Returns Team. The Returns Team may be working outside their responsibilities to help the Warehouse Team in an effort to meet their own targets. This inadvertently leads to inefficiencies in their own respective fields. Unaddressed, the same elevated turnover rate could result.
  • Never forget the desired result of any returns process is a quality customer experience. Consider how you’re impacting the initiatives of the Customer Service department.
  • As part of the inspection process (our examples bottle neck), the warehouse team works closely with the Data Team to identify discrepancies in data quality.
  • Every effort is given to make inventory accessible to the Marketing Team’s initiatives to capture high quality images.
  • Product that’s made its way through the returns process identified as unsellable is managed as salvage for philanthropic opportunities.

If you’re already sleeping at the office it can be difficult to slow down enough to move beyond the emotional desire for more support. Keep your eye on the prize; paint an accurate picture supported by data, coupled with connecting the need to the larger picture. It’s like asking, “When the heck are we going to hire someone to support our growth” but with an interest in affecting the salaries and wages knob or lever for a desired result.  Oh yeah, and in the end… turning a profit.


blog comments powered by Disqus