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    Decreasing Turnover

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    How should Mary go about increasing the number of acceptable job applicants so that her company need no longer hire just about anyone who walks in the door?
    What practical suggestions could you make that might help reduce turnover and make the stores attractive places in which to work, thereby reducing recruiting problems?

    While most of the publicity about "tight" labor markets usually revolves around systems engineers, nurses and chemical engineers, some of the tightest markets are often found in some surprising places. For example, if you were to ask Mary carter, the head of her family's six-store chain of dry-cleaning stores, what the main problem was in running their firm, the answer would be quick and short; hiring good people. The typical dry-cleaning store is heavily dependent on hiring good managers, cleaner-spotters, and pressers. Employees generally have no more than high school education (many have less), and the market is very competitive. Over a typical weekend, literally dozens of want adverts for cleaner-spotters or pressers can be found in area newspaper. These people are generally paid about $8 an hour, and they can change jobs frequently.

    Why so much difficulty in finding good help? The work is hot and uncomfortable: the hours are often long: the pay is often the same or less than the typical applicant could earn working in an air-conditioned environment, and the fringe benefits are usually nonexistent, unless you count getting your clothes clean for free.

    Complicating the problem is the fact that Mary and other cleaners are usually faced with the continuing task of recruiting and hiring qualified workers out of a pool of individuals who are almost nomadic in the propensity to move around. The turnover in her stores and the stores of many of their competitors is always 40% per year. The problem, Mary says, is maddening: "on the other hand, the quality of our service depends on the skills of the cleaner-spotters, pressers and counter staff. People come to us for our ability to return their clothes to them spotless and crispy pressed. On the other hand, profit margins are thin and we have got to keep our stores running, so I am happy just to be able to round up enough live applicants to be able to keep my stores fully manned."

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    Solution Preview

    1. The only way to do this is raise the wages. Even a small raise may make a lot of difference in terms of the applicants and it will give Mary the ability to be picky since nobody else is offering the same wages and more applicants will want to apply for the position at Mary's cleaners. Furthermore, it will be seen as a lucrative position in terms of such positions ...