Talent Management: Hire Gauge

By Baselinemag  |  Posted 2006-04-06 Email Print this article Print

Pep Boys' Liviu Dedes says an employee-rating system lets the retailer identify internal candidates to promote into management positions—saving thousands in recruiting costs.

Liviu Dedes
Pep Boys
Dir., Training and Organizational Development
Philadelphia, Pa.

MANAGER'S PROFILE: Oversees training and development programs for the 20,000-employee auto parts and vehicle maintenance chain, which operates 593 stores in 36 states and Puerto Rico. Pep Boys had $2.3 billion in sales for 2005.

DOUBLED UP: Two years ago, Pep Boys decided it needed to split the duties handled by 42 area directors—who each oversaw operations at about a dozen stores—into two jobs, one responsible for retail and the other for services. "It was too much responsibility for one individual," Dedes says. But that meant the company needed to hire another 42 managers.

THE PROBLEM: Pep Boys didn't have a systematic way to find out which employees might be good candidates for promotion into the new jobs. "There's no business that can double its leadership overnight," Dedes says. "But we didn't even have information on who was on our bench."

HIS PROJECT: Early in 2005, Pep Boys implemented a hosted system from SuccessFactors that lets managers evaluate employees using a three-by-three matrix (a standard "nine-box" grid with ratings for performance on one axis, and learning agility on the other). It also includes information such as training history and an employee's next desired move. The system tracks information on all of Pep Boys' 20,000 employees; in addition, 4,000 have been evaluated for their potential to be promoted to open positions.

YOU'RE HIRED! Within three months of deploying the SuccessFactors application, Pep Boys placed eight internal associates into management-level jobs—people it probably wouldn't have identified otherwise, Dedes says. Pep Boys figures that saved about $80,000, which covered half the cost of SuccessFactors' service for the first year. A study the company commissioned estimated that it costs an average of about $20,000 to hire an external candidate, factoring in everything from training costs to the length of time a position is unfilled, compared with $10,000 to promote from within. Plus, Dedes says, because the system is standardized, employees are rated more equitably: "Everyone's measured against the same yardstick."


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