TSI SCORES with Work Force INITIATIVES

Employee selection and development are sometimes an afterthought to other needs, such as the implementation of new equipment and technology. But, as TSI has discovered, the key to managing successful growth can begin with innovative human resource initiatives.

When Tropical Sports wear Int'l, Corp. (TSI) embarked on a major human resources testing and education initiative two years ago, the company was struggling with the loss of productivity caused by employee turnover and the coinciding costs of hiring and training new personnel.

With increasing levels of technology and automation being implemented across its Tampa, FL-based operations, the firm realized it needed a new approach to hiring and retaining its work force, which includes more than 450 hourly employees in the cutting room and distribution center.

Established in 1927 as Tropical Garment Co., the company came under new management in 1989, and since that time has enjoyed aggressive sales growth under company branded lines Savane[R], Farah[R], Flyers[TM], The Original Khaki Co.[TM], Two Pepper[R] and Bay to Bay[R], and with its licensed brand, such as Bill Blass[R], John Henry[R] and Van Heusen[R], (See "TSI Built To Win," Bobbin, January 1999.)

As TSI has expanded to become a powerhouse in both branded and private label men's and women's casual and dress sportswear, it has faced many of the significant work culture changes and challenges that accompany rapid growth. For instance, the introduction of new technology (such as radio-frequency scanners in the distribution area) signaled a need for dramatically increased skill sets among the firm's hourly associates. The challenge before TSI was to implement human resource initiatives that would help employees keep up with the technological advances while improving their skills. At the same time, TSI needed to address the issue of work force turnover.

Assessing the Situation

"With our associates we had two goals," notes Cory Pugh, director of organizational development/human resources at TSI. "As we started to implement the new technology, we wanted to assess and develop the skills of our current associates and make sure that new hires had the necessary skills. A secondary focus was on turnover. We needed to focus on hiring and retention."

After interviewing several prospective consulting partners, TSI chose The Context Group, a soft goods-focused consulting firm whose apparel clients include Polo Ralph Lauren, VF Corp., Sara Lee, Jockey International, Brooks Brothers, Guess? and Pendleton.

As it looked to address TSI's specific challenges, The Context Group first conducted a job analysis to understand what skills, abilities and performance characteristics among associates were critical to high performance in the firm's distribution center and cutting room.

Warren Bobrow, Ph.D., and a principal with The Context Group, led the job analysis project with TSI's Pugh. They found that TSI had an unusually high degree of technology in use, particularly in the cutting room. Related to this, the skills assessment revealed that as computers played an increasingly important role in cutting room jobs, the most critical attributes among associates became an eye for quality and the ability to work as a team. Before the introduction of cutting technology, the most critical attributes among cutting room personnel were spatial relationship skills.

In the distribution center, on the other hand, it was found that the introduction of new technology did not substantially change the skills and personal characteristics required to perform the jobs well. "Math skills, the ability to read series of numbers and letters accurately and willingness to work independently continue to be the key success factors," notes Bobrow.

The assessment also included an evaluation of all associates' reading ability -- a skill that has become more important at TSI as new procedures have been introduced, requiring employees to read appropriate training materials in order to implement them.

Testing for Specific Skills, Strengths

Next, The Context Group tested all hourly associates in basic reading and math skills and personality characteristics. Cutting room employees were also tested in their ability to perform visual quality inspections. Distribution personnel were tested for the ability to quickly identify number series, which are used to code boxes in the distribution area. The test results were correlated with both productivity and quality, and revealed that associates who scored higher for certain skills were those who were producing more and higher quality work.

The test results were used to determine cut-off scores for new recruits. Testing of job applicants made it possible to identify which candidates possessed the basic skills, and also to determine where they would best fit into the organization. Teamwork skills and values, for example, are essential for cutting room employees because they work in an environment in which much of the work is carried out by teams. These skills are not as important in the distribution area, where associates work independently.

Offering Free Education

Employees who needed to improve skills or to upgrade their skills, for instance to prepare to use hand-held computers for scanning stock, were all offered training at Tropical University, TSI's free internal learning center. Ongoing course offerings at Tropical University include English, Spanish, math, basic computer skills and management and communication skills. The courses, offered at many hours throughout the day, are also open to families of employees at no charge. And because some 50 percent of employees speak Spanish as their primary language, courses are offered in both Spanish and English, and all documentation of processes is presented in both languages.

"We graduate 130 or 140 people every quarter at Tropical University," Pugh opines. "Education and training have proved to be a big benefit for our employees and their families. We also offer 100 percent tuition reimbursement for outside education, whether it's for a GED or a doctorate."

Higher Retention Pays Off

The results of TSI's highly focused testing and education programs have been impressive: Within six months of the initial testing, turnover was reduced by 38 percent, from 65 percent to 40 percent, and that rate continues to decline (see Figure 1).

For instance, TSI has discovered that for employees who enroll in a course at Tropical University, the retention rate is 95 percent. This high level of retention has produced a direct impact on TSI's bottom line.

Consider the following scenario, which could apply to any apparel company:

* Typically, employee turnover costs a company $5,000 per person who needs to be replaced;

* If a company has 400 employees, a 30 percent annual turnover rate could potentially cost the firm $600,000 per year;

* Assuming it costs $25,000 to take steps (consulting, testing, training, etc.) to reduce turnover to 20 percent, the cost of turnover could be reduced to $400,000 per year, representing savings of $175,000. Obviously, the numbers can vary from company to company, but this illustrates the costs associated with employee turnover and the amount of savings any company can realize by reducing it.

In addition to free education, TSI has implemented other human resource initiatives, such as offering subsidized daycare, holding daily and weekly staff meetings to communicate the goals and status of the company, providing cross-training to help employees understand where their contribution fits into the big picture and recognizing and rewarding employees for ideas that save money and boost productivity.

Not every company will be able to afford or execute all of the initiatives undertaken by TSI. However, the critical lesson to be learned is that employee selection and development go together. TSI made a conscious decision to hire people who had the skills to do the current jobs, but also to prepare them for the future. As you can see from this case study, implementing an effective human resource development program can have far-reaching benefits throughout your organization that you cannot afford to ignore.

Janet Fox specializes in writing about consulting and training solutions.

COPYRIGHT 2000 Miller Freeman, Inc.
COPYRIGHT 2000 Gale Group