How to Combat High Turnover in the Cannabis Industry
Why do employees leave their job? It’s a question that plagues businesses both within the cannabis industry and across the greater workforce. Employees report frustration with compensation, feeling undervalued and a lack of opportunity for advancement as top reasons for leaving. Although these are some of the most common motivations for quitting, the decision likely results from a combination of many factors. With over a third of U.S. workers considering quitting their job at any given time, it’s a problem that needs serious addressing to improve.
Headset, a cannabis industry data platform, a 62% turnover rate for retail cannabis employees in Colorado. With the annual rate of turnover across the workforce reported at 44%, cannabis has a notably bigger problem to address.
WHAT CAUSES TURNOVER IN THE CANNABIS INDUSTRY?
While the cannabis industry faces many of the same universal reasons for turnover, there are circumstances specific to cannabis that perpetuate the revolving door pattern. Unrealistic expectations of the industry contribute to the disconnect, specifically in hourly retail positions. Some cannabis enthusiasts assume that certain positions are more relaxed than those outside the industry. Cannabis is filled with incredible people who love what they do — and they take their jobs seriously. The “lazy” cannabis stereotype (which is largely incorrect for most consumers) doesn’t apply to cannabis professionals. Any job seeker that looks to the cannabis industry for an “easy” position is going to be in for a surprise.
In addition, some job seekers hold unrealistic expectations about the growth and culture of the industry. Samantha Pomerantz, the Sr. Regional HR Manager for Harvest states:
“We see employees in our space doing a lot of “dispensary hopping,” working a few months here and there for various cannabis companies before moving on. We find very consistent feedback on why this happens and continues to happen, even at our company, through entrance and exit surveys. There are still expectations related to extreme growth both in compensation and position within an unrealistic time frame, as well as the expectation that it is acceptable to consume cannabis while on the job. As so many folks join our industry for the first time, we have a duty to educate and create clear expectations that we are a legitimate business and hold ourselves to a higher standard (pun intended)!”
Sara Thom, the Director of Human Resources for Native Roots, expands on the unrealistic expectations candidates hold (which are sometimes perpetuated by the media).
“The media has at times portrayed an unreal expectation of day to day cannabis industry work. If employers aren’t clear about the details of the role during the interview process, it can potentially lead to a disappointing experience for the employee, causing turnover. Giving candidates a realistic preview of the role – the good and challenging aspects – is key. The cannabis industry has a lot of incredible positions available in it that are meaningful and fulfilling. Guiding prospective hires by first understanding what it is they’re looking for is essential to fitting the right candidate to the right position.”
While unrealistic expectations do contribute to turnover within cannabis, businesses have the biggest opportunity to combat the issue.
HOW CAN A BUSINESS COMBAT TURNOVER IN CANNABIS?
Addressing turnover starts with the employer. By properly setting expectations, vetting candidates, and following up after onboarding, cannabis businesses can increase their chances of employees staying past the 90-day mark. Proper placement retention starts before you even meet the candidate.
START BY ATTRACTING THE RIGHT JOB SEEKERS
To ensure you attract the right talent, start by crafting a job description that clearly outlines the requirements, expectations and company culture. By being as clear as possible of your expectations, you’ll attract more of the right job seekers from the start.
During the interview process, uncover all questions and expectations for both parties. Interviews should cover more than just the basics, screen each candidate for a culture-fit and invite applicable team members to interview for additional perspectives. Sara Thom reiterates the importance of digging in during the interview.
“It’s important for applicants to research the company and know that it’s okay to ask detailed questions about what the position entails and why it is vacant in the interview process. Ask about retention, culture and what the company values."
Here are a couple of tips to follow during the interview to make sure you stay on track:
- Ask what their future career goals are to make sure they align with the company and department goals. If the candidate is hoping to advance quickly but there are no open roles within their career path or their expectations are unrealistic, be honest about the projected growth the positions will see.
- Make sure the candidate is comfortable with the salary range and compensation package. You can use our 2019 salary guide to reference average compensation for common positions in the industry. As lack of adequate compensation is a major reason for turnover, address the situation during the interview process so there aren’t any misconceptions in the future. In addition, don’t over-promise tips, commission or promotions. Empty promises cause resentment — don’t commit to anything you’re not 100% confident about.
- Make sure the candidate is comfortable with the hours expected. Include any overtime, holidays or additional hours the employee may be expected to work. Frustration from lack of flexibility or schedule changes not addressed well in advance contribute to employee turnover.
After you’ve made an offer that both parties agree on, plan their first day and let them know what to expect so they feel comfortable within the company from the start. Clearly outline any information your new hire needs to know upon arriving the first day, like where to park, who to report to, an on-site contact in case they have any issues arriving and what they need to bring for onboarding paperwork.
Prepare your team for the new hire’s arrival. You want your new hire to feel welcomed. A team lunch or simple gift like a company lanyard or shirt can go a long way for making your new hire feel special on the nerve-wracking first day.
SET THEM UP FOR SUCCESS
Create an onboarding process that not only gets your new hire up to speed on their specific role, but also informs them of the company’s history, the company’s org chart/who they report to, how the other departments operate and any applicable industry information they need to know. By clearly outlining all processes, you avoid future frustration from both the employee and employer. Ask for feedback and questions during the process to make sure they aren’t left with any confusion about the role and company as a whole. Consider incorporating a mentor or buddy the new hire can come to with any questions and incorporate time for the new hire to shadow someone with their role or within their department.
STAY ON TRACK
During the onboarding process, establish 30/60/90 day goals so expectations are defined and documented. Review these with your new hire, ask for feedback and check in regularly (weekly) to track progress and uncover any goals that may fall behind before it’s too late. Make sure the new hire clearly understands the goals and is comfortable with what is asked of him or her.
Review the goals frequently to make sure your new hire is on track. Continually provide feedback, both constructive and positive input so both parties are satisfied. Positive feedback is important, you want to make sure they feel appreciated in their role. Constructive feedback is important as well, as you don’t want to become frustrated with something they are doing that is fixable. Continually ask for feedback regarding their position, your managerial style, department and company as a whole so issues don’t become bigger problems and your new hire feels heard. Continue providing performance reviews outside of the 90 day mark so your employees can improve and provide suggestions.
KEEP THE MOMENTUM GOING
Supporting your employees requires offering ways for them to grow both within the company and within their role. Most employees are excited about their new role during the first couple of months, but that excitement can dwindle if you’re not providing outlets for engagement. As an employer, plan ways to keep that excitement rolling throughout their career at your company. Ongoing retention strategies are some of the most important practices you can incorporate to combat turnover. Here are some of the most effective ways to continually engage your workforce.
- Offer ongoing training and personal development courses: Those passionate about their job are eager to learn more about the industry and their position. There are various ways to offer paths for continued education. Bringing in an expert from the industry for a couple of hours to speak on new developments within cannabis can help educate a larger team. Also, various training courses are available depending on the position. By offering a budget or outlet for employees to pursue these opportunities, you are improving your overall workforce expertise. Samantha Pomerantz cites continual educational opportunities as a key component to Harvest’s employee retention.
“We have focused largely on building out our Learning & Development program as well as emphasizing the Talent Management process with managers. We have tied these together by training managers on succession planning and creating career paths for our team members. The L&D Department builds out the career pathing to ensure folks understand the path between their goals and the reality of that promotion. Our emphasis is truly on building our team members to grow and stay with us versus just having a warm body in each position".
- Provide networking opportunities within the industry: Networking opportunities help foster a sense of connection within the industry. Networking events are not only great for meeting others within cannabis, but also for learning about what’s new in the industry. Denver networking events like Budtender Appreciation Night foster a sense of community and provide a fun outlet for your employees to engage with others in cannabis. Try sending a monthly email to employees about upcoming networking events so they can participate when available.
- Encourage team building: Holiday parties and employee appreciation events go a long way in showing your staff you value their work. Fostering friendships outside of the normal working hours helps build a sense of belonging within the organization as well. Show your appreciation by incorporating a quarterly team-building event.
- Improve your benefit offerings: More and more cannabis companies are offering 401(k) plans, health, dental, and vision insurance, as well as paid time off and stock options. It’s crucial your company offers competitive benefits and continues to add benefits as budgeting permits. 22% of employees leave because of lack of benefits, it’s a valuable add that can drastically improve employee retention.
- Recognize opportunities for advancement: The biggest factor employees cite for leaving a position is lack of opportunities for advancement or promotion. Recognizing your employee’s hard work by offering bonuses and promotions will help combat turnover in the industry.
OFFER SUPPORT THAT GOES BEYOND THE ROLE
Taking the time to continually offer assistance to your employees is crucial to the ongoing success within your business. Providing comprehensive assistance requires going beyond the role. Samantha Pomerantz shares how Harvest takes a holistic approach to supporting their employees.
“Many of the employees in our industry are first time employees in a professional organization and are not aware of some of the ins and outs of employment. We have the opportunity to help our employees grow with us and offer the extra step in internal customer service. For example, so many employees do not know what a deductible is, or that we even have an Employee Assistance Program. Creating opportunities such as a benefits fair roadshow and explaining in full what these things are and mean, can really go a long way with our team members. I have had several folks say to me, ‘Wow, I have never had a company sit down with me and explain what an HSA really is.’ We are all so busy within our space but all this truly takes is time, and isn’t our time worth higher retention and a more meaningful employee experience?”
Although turnover is still an issue for many within cannabis, it’s showing signs of progress. Sara Thom reports seeing an optimistic trend for the future.
“As the industry has grown in its maturity, we’ve found that turnover is becoming less of a problem. Now more than ever before, talent is entering the space with a better understanding of what to expect from a career in cannabis. In addition, we as an industry have become better at setting these expectations during the hiring process.”
Employee retention comes down to taking the time to show your employees you truly care about their success. While there’s no one-size-fits-all to combating turnover, a combination of attracting the right talent from the start, setting them up for success and retaining talent through opportunities of engagement and advancement, you can start to combat the costly and time consuming issue of turnover within the cannabis industry.
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