Handle With Care

How UPS handles packages starts with how it handles its people. Here are five lessons on the art of delivering for your people.

Hire on at the United Parcel Service distribution center in Buffalo, New York, and your work might look something like this: Every hour or so throughout the night, a big brown truck backs into your bay. You unload its packages and place them (gently, please) on a conveyor belt. Heft another box, then another. A box every three seconds; 1,200 an hour.

There are worse jobs, sure -- but a UPS gig is pretty bare-bones. The company's 270,000-square-foot local hub, set in a gray, industrial section of the city, is an austere, three-story-high maze of belts and ramps. The packages don't stop until the shift does, and there's little opportunity for chitchat amid the din. "Basically, you've got to work," says Stewart Kita, who does just that five nights a week.

How does a manager keep someone like Kita engaged when the work isn't exactly ... engaging? More to the point, how does a manager keep Kita and others like him at all? Four years ago, the part-time workers who load, unload, and sort packages in UPS's Buffalo district were deserting at the rate of 50% a year. Since part-timers account for half of Buffalo's workforce -- and more than one-third of UPS's 340,000 U.S. employees -- the attrition was both costly and disruptive.

Enter Jennifer Shroeger. A UPS lifer, Shroeger started as a temporary driver's helper in 1979 while she was a college student and a single mom in Lansing, Michigan. Like many UPS executives, she worked her way through the ranks, eventually taking on a key staff position at the company's Atlanta headquarters. In 1998, she arrived in Buffalo as the new district manager, responsible for $225 million in revenue, 2,300 workers, and 45,000 boxes an hour.

She delivered: By last year, Shroeger's district-attrition rate among part-timers had already begun to plunge. In the first quarter of 2002, the rate sank to 6%. And during those three months, no one left a night shift.

That means that some 600 part-timers who would have left a few years back are now staying put. The annual savings, due in part to low hiring costs, total around $1 million. Lost workdays that are caused by work-related injuries are down 20%, and the percentage of packages delivered on the wrong day or at the wrong time has dropped from 4% to 1%.

It didn't hurt that all of this occurred in the middle of a flat economy. With fewer jobs available, it's not as easy for a $9-an-hour loader to jump ship for better pay. In fact, the Teamsters union, which represents most workers, argues that UPS takes unfair advantage of part-timers. In recent contract talks, the Teamsters have demanded that more part-time jobs be converted into full-time positions. Even part-timers, though, get full benefits and up to $23,000 a year in college aid. UPS also regularly surveys employee satisfaction and factors the results into managers' compensation. Although UPS won't give specific numbers, it says that retention has improved companywide.

But to produce such a dramatic change, Shroeger needed to come up with some winning talent strategies of her own -- and, surprisingly, most of them were not focused on retention, per se. Keeping more people longer, Shroeger realized, was a function of targeted hiring, effective communications, and local decision making. It also depended on admitting that most employees aren't going to stay forever -- and accepting the fact that it's not such a bad thing. Here is Shroeger's plan for hiring and retention.

1. Deliver the right package.

It's tempting to hire the first able-bodied applicant who walks through the door. And like most companies, that's pretty much what UPS had been doing in the past. But it was failing to ask a crucial question: What did the applicant want? Many of those who hired on as part-timers wanted full-time jobs, which rarely opened up. It takes six years to work up to a coveted full-time driver's job. "We're always thinking, Did anyone leave or die this week?" half-jokes Tera Barnum, a part-time loader.

If a new employee's expectations for career upside don't match the reality, he'll quickly bail. "I can't hire workers who want full-time work if there aren't any full-time jobs," Shroeger says. Instead, she started selling part-time jobs for what they were: short, flexible shifts that could complement the schedules of students, say, from the 30 colleges in and around Buffalo -- who now account for two-thirds of the district's part-time workforce.

2. Confirm the address.

Shroeger focused relentlessly on communication with her employees both before and after they were hired. She recognized that "what motivates people changes over the course of their careers, so we had to communicate differently to different groups."

The first step, of course, was to understand who she had in her workforce. Soon after she arrived, Shroeger analyzed all of the district workers' information, which produced a deep demographic and psychographic profile. Five distinctive groups emerged, distinguished roughly by the ages of the employees and by the stages of their careers.

In general, though, the defining generational divide fell at age 35. Employees who were older than that often talked differently, listened differently, and even responded to different motivation than their younger counterparts. By understanding what type of workplace promise each group responded to, Shroeger was able to tailor her pitch to bring the right person in the door.

3. Handle with care.

It didn't take long for Shroeger to figure out why so many new workers felt overwhelmed when they first came on the job: They had landed in a noisy, cavernous building with little more than a handshake and a week of training -- and suddenly the boxes were coming at them. "This is a warehouse," Shroeger says. "It's tough. If you're an 18-year-old college student, it's intimidating."

"A lot of it had to do with creating a positive work environment," adds Ray Barczak, a Buffalo business manager who helped Shroeger deliver the turnaround. UPS improved lighting throughout the building and upgraded break rooms to make the place feel more human. It also installed more personal computers on the floor, which gave workers easier access to training materials and human-resources information on the company's intranet.

Barczak turned some of his best part-time shift supervisors into trainers, who spend a week shadowing new workers. Carla Wass, an outgoing young woman who takes classes by day at Buffalo State College and serves as a trainer by night, devotes the first part of each shift to a review of the new hires' performance from the night before. Then she sticks around to supervise package processing. "If I can get them past the first 30 days," Wass says, "they'll be fine."

For each of the 20 operations and shifts across the district, Shroeger initiated an employee-retention committee, which is composed of both managers and hourly workers. The committees track new hires through their first few weeks on the job, offering encouragement when needed and trying to fix small problems before they mushroom. Judy Caveny was a week into her job when she started getting conflicting instructions from competing supervisors. "It got to the point where I wanted to walk out. I was so frustrated," she explains. The employee-retention committee stepped in and talked to both supervisors, quickly clarifying Caveny's reporting relationships.

The employee-retention committees have another important role: They try to make work more fun. There are many after-hours outings to baseball games and bowling alleys, a basketball tournament, and floorwide "super loader" contests. "We know that these are monotonous jobs," says Barczak. "We want to make it less mechanical and more social. People don't want to feel like robots. And if I'm happy, I'll take the missorts seriously. I'll treat other people right, and the quality will go up. Because, hey, I know that guy -- I played volleyball with him."

4. Let the drivers do the driving.

"It's hard for me to know what motivates 18-year-old kids," Shroeger says. "I can't predict what's going to get them going." So she lets her supervisors -- most of whom are part-timers themselves -- figure it out. Since the supervisors are closest to the work and to the workers, they are "critical influencers," as Barczak calls them.

Jaykhell Ghee supervises 15 workers in his area. He's an Army veteran who's been with UPS for nine months. The older guys on his shift, he says, respond well to military-style command and control. But that doesn't fly with college kids: "They always want to know why."

Ultimately, Ghee says, he has to "tell everyone that we're all working for the same thing." At a daily briefing near the team's truck bays, he tells workers how many packages are expected and reviews safety tips. And he has a small budget for rewarding exceptional performance. But Ghee understands that keeping UPS's employees engaged means playing to diverse backgrounds, interests, and needs.

That's why Shroeger has sent every supervisor through training. They have learned how to assess difficult management situations; they have also learned to communicate in different ways and to appreciate the need for flexibility that goes along with people in various career stages. College students and moms, for example, tend to need occasional days off or changes in their schedules -- the sort of flexibility that supervisors in UPS's demanding production system weren't eager to grant. But it turned out to be something that was relatively easy to do. "Instead of just saying, 'We can't do this,' we started looking at ways we could do it," Shroeger says.

Most important, supervisors are taught to demonstrate interest in their workers as individuals. Higher-level managers often spot-quiz supervisors about their new employees: What are his hobbies? Where is she going to school? Show an interest in someone -- especially someone who's new and a bit lost -- and for that person, an intimidating workplace can start to feel more like home.

5. It's all right to drop a few.

Supervisor Carla Wass doesn't see herself at UPS forever. She wants to get her master's degree in education and then become a teacher. Jonathan Ziders, a night loader, hopes to be a firefighter after he finishes community college. William Jaruszewski has been to cooking school and is saving money to start up his own restaurant.

And that's just fine with Shroeger. Not everyone should spend the rest of his life loading and unloading boxes. "People are going to leave," she says. "Instead of worrying about them leaving, we should be taking an interest in their future. We had to learn that part of making people successful means letting go."

That was the crucial insight that has helped UPS attract and keep so many young workers in Buffalo. College kids aren't especially loyal to their jobs, their supervisors, or their employers. But they are loyal to skills -- the kind of skills that they can apply to other work as they build their careers. And that's why UPS helps pay the college bills and why it offers its employees Saturday classes for computer-skill development and career-planning discussions.

A few part-timers will figure out that UPS is where they want to stay. After all, the company offers good pay, stability, and a long-term growth path. "I want this to be my last job," says Ghee. Even though most others will leave, they will leave after years instead of weeks. And when they do leave, they'll depart, Shroeger expects, with a sense of fondness.

Her definition of victory? "You know what I'd like?" she muses. "I'd like all of those part-time workers to graduate from college and start their own businesses -- and become UPS customers."

Keith H. Hammonds (khammonds@fastcompany.com) is a senior editor based in New York. Contact Jennifer Shroeger by email (jennifershroeger@ups.com).

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