Talent assessment software helps Mattress Firm manage — and prosper from — a period of rapid growth
Mattress Firm, as the name implies, is dedicated to helping its customers get the peace, comfort and soothing sleep they need. Inside its Houston headquarters and across its rapidly growing territory, however, the company itself is wide awake and restless. Last year Mattress Firm’s total sales volume increased nearly 21 percent to $1.2 billion, a figure that includes comparable-store sales growth of 6.5 percent, plus incremental growth through acquisition.
A lot of acquisition. In 2012, Mattress Firm acquired 242 stores. In 2013 it acquired 46 more, plus a sizeable online operation. In April, it announced the purchase of Sleep Experts, which will give it another 55 stores in Dallas and Austin, Texas, as well as Mattress Liquidators, operator of some 75 stores in Colorado and Arizona. Mattress Firm currently has more than 1,400 stores in 33 states, giving it the largest geographic footprint in the United States among multi-brand mattress retailers.
It also has 3,500 employees. For all its industrial-size growth, the core of Mattress Firm’s business is what it’s always been: One associate selling one customer one mattress at a time. In other words, it requires people — good people, and lots of them. “It’s not unusual for us to hire 1,000 to 1,500 associates in a year,” says Abby Ludens, Mattress Firm’s vice president of talent management, “just for the field sales team.”
Time for some science
In early 2009, aware of management’s ambitious expansion plans, Ludens and her colleagues met to determine how they were going to manage it. “At that point,” she says, “we were still taking resumes and applications via e-mail. We knew it was time to put some science behind our hiring process.”
As retailers, they knew there was a lot more at stake than just putting bodies on the sales floor. Crucial to both performance and loss prevention are well-screened associates with a long-term commitment to their employer. After looking at a number of providers, Ludens and her team settled on PeopleAnswers, recently acquired by enterprise software firm Infor.
PeopleAnswers (whose customers include Audi, Foot Locker, Neiman Marcus and The Cheesecake Factory) has determined that certain personality attributes — among them ambition, discipline, energy, acceptance of authority, attention to detail, flexibility, conscientiousness and empathy — are better predictors of a new employee’s future performance than skills and experience. Based on this insight, Mattress Firm set up a new approach to hiring and placing associates.
Benchmarks and goals
They began by having the field sales and management team take a computerized assessment test. After the entire sales team had taken the test, Mattress Firm sent its sales and turnover data to the PeopleAnswers science team. “They evaluated all this data and came up with what appeared to be the main differences between our top performers and our bottom performers,” Ludens says.
This information is useful both in initially screening candidates and in conducting the subsequent interviews. “If there’s something you think might be amiss with a candidate,” she says, “you can use the information from the assessment to dig deeper and make sure you’re really making a good hire. It helps you ask better questions and identify better candidates. You can hire people for years, but if you do it all on gut feel you’re taking a risk. You reduce that risk when you implement an assessment program.”
Early on, Ludens and her colleagues sat down with the PeopleAnswers team and discussed their goals. They were pretty straightforward. Like virtually all chain retailers, Mattress Firm has two primary objectives for its associate workforce: sales performance and turnover. Simply put, they wanted more of one and less of the other.
And that’s what they got. “On the turnover front,” says Ludens, “when we look at all the workforce we had hired previous to deploying the PeopleAnswers program and compare them as a group to all the people we hired after deployment, we have seen a 51 percent decrease in turnover.
“And if you dig a little deeper into the numbers, we have experienced a 65 percent decrease in involuntary turnover — which indicates we are truly hiring people who are a better fit for our company.”
Determining who will make a better fit is only partly based on skills or experience, though Mattress Firm certainly hires people who have strong retail sales or management credentials. “We hire people from a wide assortment of backgrounds,” says Ludens. “We look for people who have a passion for sales, who are energetic and who like helping people. You can’t walk down the hallway of our office without having somebody smile at you or give you a high five, and we tend to hire people who fit into that culture.”
On the sales performance side, the news is even better. “By hiring people who are a good fit against the benchmark,” Ludens says, “we have seen an average 11 percent increase in sales performance. When you take that across more than 3,000 sales associates, the results can be pretty staggering.”
A new age
“This is the new age of talent science, where by being able to put the right person in the right job you can really start making some big impacts on the organization,” says Gabriel Goncalves, founder of PeopleAnswers and senior vice president of human capital management strategy at Infor. “We do a lot of work with a lot of retailers, and time and time again, in a very objective way, we find that when you put the right person in the right job they sell more.”
Another important aspect of this type of evaluation is its effect on promotion and succession. “In an organization like Mattress Firm, where they’re opening new stores all the time, it’s quite common for them to say, ‘I’m opening a store a mile down the road from where I already have a store, and I want to pick some folks in the region and give them a promotion. I’ll take somebody who’s a department manager in an existing location and make them the store manager,’” says Goncalves.
“What the software can do is say, ‘Well, you don’t necessarily promote your top-performing sales reps. Look for the person who has the right behavioral makeup to be successful in the manager role.’”
Ludens concurs. “We’ve been in such a rapid growth mode that we’ve been primarily using the assessment and applicant tracking system, but there is much more that we can do, and we look forward to taking advantage of it. We feel like we’ve just scratched the surface of what we can do.”