Poaching employees is common in most industries, and the cannabis industry is no exception. There is a shortage of skilled labor across many sectors, unemployment rates are low, and the economy is strong, which means demand for experienced staff is up. This type of environment increases employees’ confidence levels and promotes more risk-taking regarding job moves. In September alone, the Bureau of Labor Statistics reported that more than 3.5 million Americans quit their jobs.
What makes this problem worse in the cannabis industry is that experienced workers are difficult to find and hire. As the availability of skilled employees continues to decrease, it may become increasingly difficult to retain the best employees. What can the dispensary owner do to combat these threats?
1. Treat employee retention as a business imperative
Employee turnover is expensive and disruptive to your business, especially if you lose employees who you have trained and grown in the business. According to an article in The Huffington Post, Deloitte, a multinational professional services network, says turnover can cost up to two times the employee’s annual salary. Dispensary owners can be faced with the costs of recruiting, time spent in hiring, onboarding, training, and waiting for an employee to become proficient—generally between three and six months. Unwanted turnover affects dispensary performance, results in lost productivity, and can lead to low morale and low employee engagement, which can cause additional turnover and stress to your business.
2. Pay above-market salaries and reward superior performance
Gone are the days when dispensaries could pay minimum wage and retain employees. There is too much demand for experienced workers in the industry and thus salaries must be competitive.
A frequently cited reason for leaving a company is pay. While other factors certainly influence an employee’s decision to leave your dispensary, don’t let salary be an issue. Be creative in how you pay your best workers. You might provide financial incentives such as bonuses, stock options, paid time off, and other monetary rewards that are meaningful to your employees. Provide some small perks like free donuts on Fridays or company-paid childcare when overtime is required. These perks are significant ways to let employees know that you care about them, and they may be more likely to stick around because of them.
3. Coach your employees
Coaching is an important two-way communication process that allows both you and your employees to provide input about the work environment. By coaching rather than managing, you are encouraging your dispensary employees to think more like an owner and to solve problems rather than expecting “management” to have all the answers. Rather than the “command and control” style, most HR experts agree that this coaching style is a more effective management method, both in terms of employee performance and retention.
4. Recognize budtenders and dispensary staff as your critical first line of customer service and repeat sales
With increased competition, dispensaries’ attention to customers is what sets them apart from other stores. A customer’s first impression is often managed by the employee who guides them through the purchase process. This is a critical point toward reaching your business goals. The difference between great and average customer service usually is correlated with how engaged and educated front-line staff are. According to an article on Inc.com, “Employee experience and engagement does have a direct impact on your company’s products and services and ultimately your customer experience and business performance. … Highly engaged employees were five times less likely to quit than employees who were not engaged.” You can increase your employees’ engagement by ensuring they’re satisfied with their jobs, enjoy their work, and believe that their job is important to the company’s overall success.
5. Offer benefits that are meaningful
Most dispensaries understand that it’s important to offer a competitive benefits package that fits their employees’ needs. Providing health insurance, life insurance and a retirement savings plan can be important in retaining employees—as long as your employees actually value these benefits. However, one size doesn’t fit all. You may find that some employees prefer paid time off rather than a retirement plan or health insurance, for example. The decision to offer employee benefits should be based on your dispensary’s staff size, your current and future business plan, the competition for talent in your market and the environment you want to nurture.
Other benefits, such as flex time or paid vacation, go a long way to show employees you’re willing to accommodate their work/life balance and can be a deciding factor to stay with your dispensary. Working families tend to stay with dispensaries that offer flexible or part-time scheduling, for example. Other benefits that attract and retain employees could be education and tuition reimbursement, travel and participation in industry trade shows, off-site day care or pet-friendly accommodations. Ask what your employees need and want in determining a flexible benefits package that is best for your employees and your business. (For more information about offering benefits, refer to the March/April 2018 issue of Cannabis Dispensary.)
6. Conduct regular ‘stay conversations’
Most of the time, asking employees why they are leaving the company will not provide an owner with information that can be used to improve retention. Even if people list their complaints, they will likely be too general. You won’t learn or know what your top people need to be successful or what causes them to stay with your dispensary or where they feel frustrated or stuck in their jobs. You have to ask before they decide to leave, when you still have time to make necessary adjustments.
Meet one on one, in a quiet, unstructured manner with your best performers, at least twice a year (and separate from the annual performance review). Ask what is frustrating about their job, what is rewarding, and what might make them more successful. You might ask them if the reason they first came to work in your dispensary is the reason they have stayed. Ask questions such as: Why did you come to work for our dispensary? Why have you stayed? Try finding out what they would like to be doing but aren’t getting to do. What would they change or improve? Let your employees know you are asking these questions because you value their input and you really want to know what is on their minds, and what ideas they have. Then use that information to improve your employee retention strategy and take actions that will make a difference.
7. Provide learning and growth opportunities
Ensure your employees know what is expected of them and how they can grow with your dispensary. Understand the career desires of your key employees, and do whatever you can, within the boundaries of your business reality, to help them achieve them. Provide opportunities for increased responsibilities. While small dispensaries may not offer the positions into which the employees may want to be promoted, it is possible to provide employees with increased responsibilities, more ownership in the business or additional educational and growth experiences. In larger dispensaries, make the promotion process transparent, so employees can visualize the steps they can take to achieve upward mobility within your company. When you promote employees, you’re sending a message to everyone: These are the kinds of achievements, type of conduct and commitment that are valued and rewarded by our company.
8. Consistently recognize outstanding employee behavior
It is important to remember the rule: “Praise in public, correct in private.” Recognition incentives include actions, such as a simple “thank you,” praising employees or announcing an employee accomplishment at a company meeting. Supervisors can offer employee recognition in their day-to-day interaction with employees. A personal note of praise from an employee’s manager is very meaningful. Appreciation incentives also can come in the form of company parties and celebrations, company-paid family events or group lunches. Another way to reward employees is with service awards, which acknowledge solid performers who have stayed with the company and are committed to the dispensary’s goals.
A note of caution: You will want to avoid offering the same award every time because those incentives eventually become entitlements and lose their power.
9. Don’t keep unproductive or negative employees on the payroll
There are instances when you should fire employees. When an employee disregards your dispensary’s code of conduct after repeated warnings, it’s time to cut ties. An employee who steals product, time or money from the dispensary is grounds for immediate dismissal. A worker who is consistently late, can’t be trusted to complete tasks or negatively impacts overall productivity shouldn’t be tolerated, either. This type of turnover is good for your dispensary.
Employees who are unhappy at work can influence other employees and productivity. According to a 2019 survey conducted by the Society for Human Resource Management, “When they’re part of a strong workplace culture, employees feel inspired to go to work, seeking out new opportunities to succeed in the workplace. A toxic culture, on the other hand, leaves them uninspired and unwilling to push themselves at work. Employees may even choose to skip work altogether, in an attempt to avoid toxicity. About one in four working Americans dread going into work, while one in five call in sick when they don’t feel like going to work.”
When employees are happy, they perform better work and influence others positively, as well. If you’ve offered an employee remedies or different work, but he or she is still unhappy, you should encourage the employee to quit or consider terminating the worker.
Most of your employees know who on the team is productive and who isn’t, who does the minimum amount of work or who doesn’t work well with other team members. Keeping an unproductive member can result in overall lower productivity and morale and create a toxic environment. Usually, when an employee with low performance leaves the organization, there is an increase in team morale and engagement.
While these tips aren’t the only strategies to retain your valued employees, taking these actions will certainly help you create the type of work environment that will make employees want to stay with your business as it grows.