Implementing Topgrading throughout our organization has been integral to Benco Dental’s growth and success. In the five years since we started our Topgrading journey (and it really is a journey), we’ve grown revenues by more than 30% while doubling operating income. More important, Topgrading has helped us extend our continuous improvement culture to the way we select and develop people. It’s given us a replicable process that our Human Resources team has implemented in every corner of our company, across the country and at all levels. As leaders, we often say that people are our most important asset. Topgrading provides an invaluable template for managing that asset. – Charles Cohen, Managing Director
BENCO DENTAL (1,300 EMPLOYEES, GLOBALLY)
Industry: Dental Supply
- Improvement from 27% to 60% A Player managers hired in recent years.
- With Topgrading, turnover in the company has dropped significantly.
Company: Benco Dental is the largest privately held dental supply/equipment company in the country. Overall, we are the third largest. Benco Dental provides dental supplies, equipment, and consulting services to dental offices/labs in over 40 states. We currently have approximately 1,200 associates, 5 distribution centers, and over 50 total locations throughout our footprint. We have recently expanded to the west coast, including the opening of our Reno, Nevada distribution center in June 2011.
Topgrading History: In 2006, Managing Director Chuck Cohen and Vice-President, Culture & People (HR) George Rable initiated Topgrading. The beta test was in the sales area, and with success, has been rolled out throughout the company.
George Rable conducted two-hour briefings on Topgrading for all 100 company managers. An effective sales point, when managers initially complained of not having 3 hours to conduct an interview, was to ask the manager for the estimated cost of a mis-hire. Aggregating those costs and reducing them to only one times salary, George showed that in the previous year mis-hires cost 1/3 of profits.
In 2006 and 2007 talent reviews played a major role in replacing a third (33) of our managers.
Although tandem Topgrading Interviews were required and conducted, there were concerns that corners were cut, and so starting in 2010, Culture & People (HR) has been the tandem partner along with the hiring manager.
Topgrading has become a key component of Benco Dental’s Culture. Managers have bought into the need to conduct thorough screening, Topgrading tandem interviews and background checking. We believe our biggest success to date has been our hiring in management. This has a direct impact on the quality of associate hiring as excellent managers hire the best associates”.
Topgrading Results: For managers, hiring has improved from 27% to a projected 60% A Players, as rated by the CEO and two top HR managers. Since beginning Topgrading the percent success hiring and promoting has improved to 33% (2007), 39% (2008), 43% (2009), and 47% (2010). Those hired in 2011 have not been on board for the full year expected for a formal rating, but there is confidence that the success rate will be 61%. “And we expect to improve that stat indefinitely,” said George.
- MEASUREMENT: While we know the cost of turnover can be as many as 15 times annual compensation, we have generally (and obviously conservatively) used one times annual average compensation as an indicator of the cost of turnover. For example, when we compared the first 9 months of 2010 vs. the first 9 months of 2011, we had 31 fewer terminations during 2011 despite having a 55 associate higher headcount year over year. Using an average annual compensation of $50,102 (which may be low due to sales commissions), we project that this improvement in retention equates to adding $1,553,162 of profitability year to date during 2011(31 terminations X $50,102). If this trend continues, our improvement in hiring/retention will contribute over $2 million to Benco Dental’s bottom line for calendar year 2011!
- JOB SCORECARDS: Due to the fact that Benco has detailed job descriptions, we do not currently use job scorecards. However, we may look at doing so in the future to improve our effectiveness.
- RECRUITS FROM NETWORKS: As a family-owned company, we do believe that great associates will refer similar individuals for employment. On average, approximately 10-12 associates are successfully referred (hired) for employment at Benco each year (5-6% of total hires). Due to the fact that retention of these associates is very high, we are exploring methods of ramping up this key referral source.
- SCREEN WITH THE TOPGRADING CAREER HISTORY FORM: While we have not uniformly required that the Benco Employment Application be utilized for telephone screening interviews, many managers are doing so. However, once a candidate passes beyond the telephone screening process, a fully completed Benco Employment Application is required in advance of the full Topgrading interview.
- PHONE SCREEN: We have found the phone screening process invaluable in narrowing down the list of viable candidates, saving time for both Benco managers and the candidates.
- COMPETENCY INTERVIEWS: Yes, Competency questions are incorporated into the Topgrading interview.
- TANDEM TOPGRADING INTERVIEWS: Tandem interviews are conducted for the selection of all candidates. Sometimes there are two managers involved; most of the time, it is a Culture & People (HR) representative and the hiring manager.
- INTERVIEWERS GIVE EACH OTHER FEEDBACK ON INTERVIEWING TECHNIQUE AFTER THE TANDEM INTERVIEW: Yes, tandem partners do provide feedback to each other after the interview. Managers look to the C&P (HR) team for constructive feedback after interviews, which helps to build their skills.
- EXECUTIVE SUMMARY: Yes, interview results are discussed (and sometimes debated) by tandem partners and documented to facilitate the selection process.
- CANDIDATE ARRANGES REFERENCE CALLS: Benco requires final candidates to provide names and contact information for current/prior managers. While the candidate sometimes goes as far as coordinating an exact discussion time for Benco and the prior manager, more often than not Benco is making this contact. However, if any problems arise in making a successful contact with a reference, the candidate is then required to intervene to be considered further.
- NEW HIRES COACHED IN THE FIRST MONTH: All new associates complete a new hire orientation, which includes generic Benco training and job specific training by the manager or mentor.
- ANNUAL MEASUREMENT OF PERCENT OF HIGH PERFORMERS HIRED AND PROMOTED: We have not done this historically. We are now starting this process going forward as a measurement of how we are performing in the selection/retention process.
ARE TOPGRADING METHODS USED FOR PROMOTING PEOPLE: Yes, but in a modified fashion. Tandem interviews are utilized for making promotion decisions. The main difference is that most of the questions are focused around employment at Benco and fit for the new role vs. a review of pre-Benco employment. Having said that, the more diverse the prospective role is vs. current role, the more prior employment experience is analyzed.
INSIGHTS & BEST ADVICE:
VALUE OF APPLICATION/CAREER HISTORY FORM VS. RESUME: It took several years and workshop demonstrations, but Benco managers now believe in the need to utilize a fully completed Employment Application/Career History Form in order to conduct a thorough Topgrading interview. Essentially, a resume is a marketing piece that is intended to play up an applicant’s strengths. In a courtroom setting, it’s like a defendant being questioned by the defense attorney. However, the Employment Application asks questions that the applicant may or may not want to answer….it’s like a defendant being cross examined by the prosecuting attorney!
AMOUNT OF TIME REQUIRED TO CONDUCT TOPGRADING INTERVIEWS: Advice to HR Professionals…If managers raise concerns over the time required to conduct lengthy Topgrading interviews vs. traditional interviews, asking them one question will probably resolve their concern… “Would you rather take additional time now to make a more effective hiring decision or spend much more time later addressing a poor hire that causes problems related to your customers, other associates, etc.?”
DON’T APOLOGIZE FOR ASKING JOB CANDIDATES ABOUT THEIR EARLY YEARS: One of the things that we’ve found managers doing is starting out the interview by saying, “I’m sorry we need to do this, but we are going to start the interview by going back to your high school years.” There’s no need to apologize! We’ve discovered that in addition to providing great insight into how the candidate has become the person they are today, it also serves as an excellent ice breaker because people seem much less guarded about discussing what they did 10, 20, 30 years earlier than what they are doing today.
TANDEM INTERVIEWING HELPS TO BUILD A GREAT WORKING RELATIONSHIP BETWEEN HR AND MANAGERS: Earlier in our Topgrading journey, many managers were very reluctant to have Culture & People (C&P or HR) involved in their interviews. Their feeling was “How can C&P determine who a good Accountant, Programmer, or Sales Representative is, that’s not your field?” Our response was: “We are not partnering with you because we know the technical aspects of the job better than you, but because we know how to assess cultural fit for the organization. We also interview EVERY day, so we have become skilled at knowing what follow up and probing questions to ask and when to ask them.” Since C&P began to collaborate with managers in tandem interviews, this has not only facilitated a more effective interviewing process, but has served to greatly increase the collaboration between C&P and managers in general.
DON’T USE FRIENDS, NEIGHBORS, CO-WORKERS AS REFERENCES: As the old saying goes, “You can pick your friends, but not your family.” This concept also applies when conducting references. A job candidate cannot select who their manager is/was, but they can give you the one co-worker out of ten that will say positive things about them. Always rely on conducting phone references with managers. This significantly improves the value of the information provided.