Handle With Care

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.