Finding Workers Who Fit
The Container Store built a booming business for neatniks --
who turned out to be their best employees.
Business 2.0, November 2004
by Vicki Powers
Since founders Kip Tindell and Garrett Boone opened the first Container Store
in Dallas in 1978, containing growth has turned out to be their most daunting
challenge. The privately held company has quietly expanded into a 33-store
nationwide chain with projected 2004 revenue of $370 million and annual sales
growth that has topped 20 percent in all of its 26 years. Behind much of that
success, analysts say, aren't just the popular knickknacks the Container Store
sells for Type A neat freaks. Just as important is the company's organizing
principle for human resources: turning its best customers into loyal, top-performing
In an industry with an average employee turnover rate of more
than 70 percent, worker churn at the Container Store is less than
10 percent for full-time employees and 30 to 35 percent for part-timers.
And nearly a third of the company's 2,500 workers come from referrals. "To
be a great place to shop, you need to be a great place to work," says
Doug Fleener, president of Massachusetts-based retail consultancy
Dynamic Experiences Group. "This company is in total harmony,
from the sales floor to the distribution center." Forget the
closet -- here's how the Container Store organizes its talent.
1 In-Store Head-Hunting
and Boone make recruiting part of everybody's job by offering all
staff members handsome bonuses. Workers get $500 for every full-time
hire and $200 for every part-timer. All employees, from stockers
to managers, carry recruiting cards to pull out when chatting up
customers in the aisles. The program is so successful, says Kevin
Fuller, director of training and recruiting, that the company often
goes six to eight months without placing a single classified ad.
2 All-Hands Interviews
who get a call back submit to a group interview with as many as
10 fellow job candidates. There, potential hires often make a pitch for a
product that solves an organizational challenge -- a key indicator of enthusiasm
and sales skills. The group setting offers managers a glimpse of how candidates
function as part of a team. "We want to see how people encourage one
another, because that's our environment," Fuller says.
3 Continuous Training
New hires begin a 241-hour
training program that stretches out over a year. (The retail-industry
average for training new workers is eight hours.) Newbies are paired
up with training "buddies" who give them crash courses
in everything from sales techniques to the ins and outs of Elfa,
the company's best-selling modular storage system. The company won't
disclose how much it spends on training, but "we know it's expensive," Fuller
says. Still, the training helps ensure better service -- which
results in fewer lost customers and a lot more sales: The Container
Store rings up an average of $400 per square foot, compared with
$125 for the rest of the housewares industry.