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How to think about hiring in cannabis retail

The Retail Expert Series features Krista Raymer, CEO of Vetrina Group, a leading cannabis retail consultancy. In this segment, Raymer shares her expertise on how to think about hiring for your cannabis retail store or dispensary. Raymer discusses why hiring is so important, how to measure the relative success of strong hires and some tips and tricks for optimizing the hiring process for retailers.

Learn more about Krista Raymer and the team at Vetrina Group.

More from Vetrina Group

Watch and read more from Krista Raymer and Vetrina Group:

The Retail Expert with Krista Raymer – Pt 5 – Hiring

Today, we’re going to talk about hiring and focus a little bit on how impactful it is to the business; where we can measure it and what KPIs we should be looking at when we’re hiring; as well as some tips and tricks to get started.

Hiring Impact

Hiring for a cannabis store is going to impact the business on a number of different aspects. Whether you’re getting started, or rehiring staff that have left or turned over; one of the things that we want to think about in hiring, is how impactful it is to the business. 

Yes, there’s the cost of having employees- but what happens to the business when we lose them? This should directly impact what steps we take when hiring off the first place.

The people that we have in store are going to be a direct representation of the brand and how we connect and retain our customers. So the cost to acquire a new customer really lives and dies with our budtenders in store. Thinking about where we’re hiring; how we’re hiring; and what skills we’re building into the business, will directly impact how profitable the store is in the long run.

Hiring Measurements

So when we look to measure how effective our hiring is, there’s a couple of different KPIs we can look at; but one of the first things that we want to do is get an assessment of how expensive it is to bring somebody onto the team. 

There are obviously sunk costs, as well as opportunity costs when we bring on new team members. Sunk costs might include things like licensing; but opportunity cost is more looking at how we prepare our team members to do the job that we’re expecting them to do. The onboarding costs–or our investment in a team member–will directly relate to how effective they are doing their job.

So one of the things that we like to think about directly is: how expensive is our onboarding and training program? This is a cost that we invest in our team members. So if we think about it as a true investment, sometimes it actually relates, or translates, to saying: would I invest $5,000 in bringing this person on?

If I would; then maybe they’re the right decision. Often bringing on a new team member isn’t only about the number of hours that they complete their training in; but it’s also who else worked with them in that time period. If you’re bringing in other staff, or having a manager work with that person directly, the cost per hour to work on their training is quite extensive; it isn’t uncommon to see training or onboarding programs in a cannabis retail store go anywhere between $4,000 and $7,000 easily. 

The second KPI we like to take a look at is employee retention, as well as employee turnover. These are really impactful because they are a direct reflection of how engaged our team is within our company culture.

When we have engaged employees, we usually see a much higher retention of our customers and higher averages-per-customer. 

If they’re disengaged, we usually see customer service problems, as well as a drop-off in our customer retention. So taking a look at employee turnover isn’t only going to tell us about how expensive our investments have gone into building our team; it’s also going to give us a good indication of what our health looks like in relation to our customer relationships.

Finally, the third KPI we like to take a look at is sales distribution. This is really important once we’re up and operating, and have a team that is selling to our customer base. We want to see that the sales are almost split evenly across the team–obviously pro-rated by the number of hours that they work in the store–but that everybody is hitting about the same sales volume; whether that be in terms of averages-per-customer, or number of customers serviced.

This is an indication that the team is working cohesively together. Where this starts to break down, is when you have a couple of players who sell really, really well; and a couple of players who are not selling as well. We need to dig into that and understand what is happening. It could be that some of your top performing sellers are actually getting support from your lower performers; is there a way to level up your lower performers, or do we need to provide additional support to your top sellers? This is just an indication of our overall team cohesiveness.

Hiring Tips & Tricks

So let’s talk about some tips and tricks around hiring. 

The first one is building a budget. We not only want to put together a budget, or expectation, around what the salary is going to look like per employee; we also want to think about what this as an entire cost center is going to look like on our P&L.

In traditional retail, this is usually a payroll percentage. So what does the percentage of revenue that we’re bringing in go towards payroll? This is going to be a reflection of how we’re operating the store. If we’ve generated a store that operates in a really small space, we might not need a lot of employees and therefore our payroll percentage could be lower.

If we’ve generated a space that’s quite large, and we have a number of employees working in the space at any given time, our payroll price is going to be higher. So taking a look and building a budget-and what that looks like-as well as monitoring and maintaining where we are versus the budget, is going to keep us in check.

The second tip we like to consider is doing two types of interviews. The first interview is a skill check and the second one is a culture check. So in the first one, what you want to do is get to know the candidate; what skills they’re bringing to the table; and how that directly aligns with the job that you’ve got posted.

For example, with a budtender, we might want some experience using customer service; we want to directly understand what skills they have already built into their experience that directly relates to customer service. In a culture interview, we want to take a look and align that the employee, or potential employee, lines up with what our core tenets are of the business.

If one of our core tenets is that we’re fun, then our employees need to have an aspect of fun as well. This is going to be a gut-check based on how we’re wanting to build the relationship with our customers, and how we want to communicate our brand. 

So in the first interview, we’re really understanding what skills the team member potentially has; in the second interview, we’re understanding how they would inter-relate to our company culture. 

Finally the third one is to build a training program. It seems pretty clear, but it’s more about what is included in the training program. 

The first one is your SOP and your operational practices. A team member needs to understand what goes into the environment.

The second part is understanding all of the technology; the logistics around how to do the job. This is going to help empower the [new] team member to make decisions when they come up, as well as just do their job on the day to day. 

The third piece is really focusing on product knowledge. These are the areas of the business that are going to directly relate to the products that you carry in store and how we communicate it with our customer.

Finally, the most important piece of the training should be leveraging all of that information, tying it together with how we complete a sale, and really practicing how we interact with customers. This is the piece that gets most commonly missed, but also is the most important. This is going to help build the team members confidence, and ability to make a relationship with the customers.

Within that we’ve done some role playing that pulls together all of the pieces that they’ve previously learned. In this type of onboarding, you’re going to ensure that you’re setting up your [new] team member to be successful, as well as building a team that is going to drive profitable transactions with your customers.

Thanks for joining us today. If you have more questions, or want to know how to drive a profitable retail environment in cannabis, you can reach out to me directly at Vetrina Group.

We have more awesome content just like this, that will be on businessofcannabis.com.

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