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Can independent, family-owned distribution businesses win the war on talent? I say unequivocally, “Yes.” I believe independent distributors are uniquely positioned to overcome the pervasive labor shortage that has been wreaking havoc on our businesses. Unfortunately, only 15 percent of distributors feel they are in a good place to do it.
They’re not completely wrong. The old way of recruiting and retaining talent is a losing battle.
Becoming a dominant employer of choice requires a shift in mindset from antiquated notions of management to employee-centric leadership. Here are a few reasons:
• Only 31 percent of human resource (HR) leaders think their employees are satisfied with the company employee value proposition (https://gtnr.it/3BdVG8y).
• Nearly 44 percent of distributors agree there are HR practices that must be unlearned going forward (https://unleashwd.com).
• Nearly 88 percent of distributors agree that the future will require leaders to focus on employee experience to the same degree or greater as the customer experience (https://bit.ly/42poE12).
According to my recent survey, more than 82 percent of distributors believe overcoming the labor shortage will be their biggest challenge for the next decade (https://bit.ly/42poE12).
The solution requires focusing on your people.
About halfway through season one of my We Supply America tour (www.wesupplyamerica.net), I realized something. I didn’t see products and racks; I saw something bigger. I concluded that your businesses are platforms for the personal and professional growth of your employees.
Then, during season two, I developed the unconditional belief that your businesses contribute to the greater good of society. The development of your people is part of that goodness.
And that’s why this is what I believe deep in my core: You are perfectly positioned to win this war.
First, we need to address these three things:
1. You don’t believe it. Some distributors have bought into the narrative that they can’t compete with the big, sexy conglomerates out there. They’ve bought into the narrative that they can’t compete with big benefits programs or there is a ceiling in their organizations.
2. You haven’t thought deeply, strategically and holistically. The tyranny of urgent and administrative duties has stolen your focus and, instead of coming up with proactive solutions, you react tactically.
3. You are humble. Historically, the distribution business has not effectively advocated for or marketed itself. You have a hard time articulating your value and place in the market.
It’s time to perform a gut check.
Distributors must check their mindsets and ask themselves, “Is our business ‘sexy’ enough to attract the talent we need?”
Distribution not sexy? Nick Porter, CEO at Porter Pipe & Supply, says to leaders: “It’s up to you to position your business as an attractive place that attracts the next generation.”
It doesn’t end there. Distributors must fight the false narrative that says the industry isn’t sexy. To drive this point home, my thoughts go to the former president of Bauer Hockey, Amir Rosenthal, now COO of The Granite Group.
I asked him to tell me what it was like to go from running a sexy business the likes of Bauer Hockey and transitioning to the world of plumbing supplies distribution.
His answer? “Sure, it was sexy. We interacted with the National Hockey League and had contracts with star players. Now I’m selling toilets. Let me tell you this; the sexy business of hockey only touches about a million people in North America. When you think of what we do at The Granite Group, we touch 330 million people. That’s sexy.”
I was blown away hearing those metrics, so I did some research and found American distribution touches:
330 million people;
142 million housing units;
6 million commercial buildings.
Every one of those 330 million people uses the products you sell. That’s pretty sexy.
Serving Local Communities
There are three reasons distributors are uniquely positioned to win the war on talent:
1. They prioritize long-term thinking over decisions to please Wall Street each quarter.
2. They have organically built a culture of dignified respect and family instead of viewing employees as just numbers.
3. They favor leadership with deep purpose rooted in the local community over distant, autocratic leadership.
However, we must believe it and know we possess something worthy to offer.
I asked Curt Hovis, vice president of Hovis Auto & Truck Supply, how the noble calling of distribution leads to job creation.
“It’s private entrepreneurs in search of their own betterment and freedom, supplying families and people with jobs and keeping communities strong,” he notes. “Amazon isn’t going to donate to the local football team. It’s big business. The noble calling is to do a great job servicing local communities and providing economic opportunities for everyone in that chain. Your people need good jobs, and you have to supply their needs.”
How did Andrew Berlin, former CEO of Berlin Packaging, go from an $11 million valuation to a $2 billion distributorship in 20 years? It started with strategic thinking.
Early on, he identified the importance of attracting and retaining talent, paying above-market salaries while his competition paid the average. Berlin thought long and hard about the type of talent the company wanted and then strategized how to meet the needs of those potential candidates.
So, while competitors not only paid at market value, they allowed recruiting to be a second, third or fourth priority (after all, they had to pick, pack and ship). However, Berlin Packaging made recruiting a core competency.It’s critical, given the top HR trends facing distributors today (https://bit.ly/42poE12), to build a plan for your business. Over the years, I’ve identified these four phases you can bring to your organization to begin winning the war on talent.
• Phase 1: What is Your Organizational Purpose? Define your organization’s deeper purpose and connect it to the needs, wants and desires of today’s talent pool. You must articulate your organizational belief on the humanity-people equation of business. Does it align with today’s talent?
More than 85 percent of distributors surveyed realize that the needs, wants and desires of employees have changed significantly over the last several years.
• Phase 2: Rethink Your Employee Value Proposition. Define how your job and career opportunities meet the career and lifestyle needs of employees. Clearly articulate your organization’s ambition for positively impacting employees’ lives and the platform you use to do so.
Nearly 90 percent of distributors believe that it is equally, if not more important, to think about the employee value proposition we offer employees compared to our customer value proposition.
• Phase 3: Become Great Internal and External Marketers. Define your brand and outline key messaging to unapologetically communicate your differentiated employment opportunities. Outline communication strategies for both internal and external audiences.
Only 41 percent of workers feel they understand what their employer stands for or how their company’s brand is different from the competition (https://bit.ly/3B9O6eO).
• Phase 4: Create Go-Forward Plans. Build your desired outcomes into a specific and actionable plan aligned with your business and people strategies.
Create an important and tangible impact on society.
Define an inspiring and meaningful future reality for the business.
Lead by a true north that pulls the business toward greater significance.
Be grounded by foundational beliefs and values that add meaning to their lives.
Focus on the whole person to unleash the human spirit.
If 82 percent of distributors believe overcoming the labor shortage will be the biggest challenge for the next decade, we better get started.
Dirk Beveridge is the founder of UnleashWD, executive producer at We Supply America, president of the Beveridge Consulting Group and champion of the noble calling of distribution for more than 36 years. His one-of-a-kind perspective on the future of wholesale distribution has guided his mission to advance the growth, relevance and transformation of the industry, helping distributors thrive.