Case: HR Contributes at SYSCO
Many people in the United States are not familiar with SYSCO, but they see its results because SYSCO is the largest food services and distribution company with almost $24 billion in annual sales. SYSCO supplies food products to customers in restaurants, hotels, supermarkets, hospitals, and other companies. In a firm the size of SYSCO with more than 40,000 employees, HR management is making significant contributions to organizational success. As an indication of this success, SYSCO received the Optimas award for general HR Excellence fromWorkforce Magazine.
Beginning several years ago, the need to revitalize HR activities was recognized by both executives and senior HR staff members. At the time, the SYSCO operating regions had administered many of their own HR practices. To bring change to HR corporate-wide, while preserving the entrepreneurial independence of the regions, a “market-driven” HR approach was developed. In this approach, corporate HR identified ways it could assist regional operations, and then developed programs and services that met regional needs. However, unlike in many other corporations where corporate HR programs would be “mandated” to operating units, SYSCO took a different approach. Key to market-driven HR is that managers in the regional operations must be convinced to “buy” the corporate HR services. For example, if a supervisory training program is developed by corporate HR, regional managers decide if they want to use the program for supervisory training in their regions.
Another part of creating HR as market driven was the establishment by corporate HR of a Virtual Resource Center (VRC) to provide services to managers and employees. A key aspect of the VRC is use of HR technology to gather extensive data on HR activities and provide that data to operating managers. One source of data is workplace climate surveys of employees. Using the survey data, HR developed initiatives to increase safety, which reduced workers’ compensation claims by 30%, resulting in savings of $10 million per year.
Another problem that SYSCO had was high turnover rates of night shift warehouse workers. Recruiting these workers has been a constant challenge for SYSCO and other distribution firms. By implementing a variety of programs and services, based on employee and managerial input from surveys, the retention rate for these warehouse employees has been increased by 20%, resulting in savings of $15 million per year. These savings are due to reduced time and money spent recruiting, selecting, and training new employees. Also, employees with more experience are more productive and more knowledgeable about SYSCO operations and products.
Another area where HR has contributed is with truck and delivery drivers. Data gathered through the VRC has been used to revise base pay and incentive programs, increase driver retention rates, and improve driver safety records. Additionally, customer satisfaction rates increased and delivery expenses declined.
All of these changes illustrate that HR efforts at SYSCO have been paying off for the company, managers, and employees. But as the value of HR efforts is recognized by more managers, HR’s role at SYSCO is likely to continue growing and changing.
Question: Discuss what types of HR changes could have affected reductions in workers' compensation expenses, employee turnover, and increases in customer satisfaction.