Mastering turnover: Talent optimization saved Master Electronics $2M

Background

Master Electronics is a leading authorized distributor of electronic components, boasting a portfolio of more than 300 suppliers. The Arizona-based, family-run company, founded in 1967, has 14 branch locations worldwide, including nine in the U.S. As the company has grown to 450 employees, its core values have remained the same: visionary thinking, entrepreneurialism, caring, dedication and loyalty.

The Opportunity

When Jon Trevor joined Master Electronics as Head of People in early 2019, he immediately recognized a big opportunity for improvement in one of the company’s most crucial tasks: hiring. The operations department—the largest team and hub of orders, shipments, and all the nuts and bolts of fulfilling customers’ needs—had a turnover rate of 111%, more than double the industry standard.

“Hiring was a mess. There was no consistency,” said Trevor. “I knew right away that they needed some structure. And PI provides that structure.”

Trevor had used the PI Hire and Inspire solutions in a previous role. During his interview with Master Electronics, he shared his Reference Profile to give the hiring managers a better sense of who he was—and show that he was a self-proclaimed “non-traditional HR leader” who would implement the change the company needed.

Once in the job, Trevor followed through on his interview demonstration and received buy-in from the Master Electronics leadership team to try PI with just the operations department.

“The intent was ‘Let’s just get it into Ops. Let’s get it to these 165 people and go from there,’” said Trevor. “But as soon as we started doing implementation, everyone started to hear about it and wanted to do it.”

The Solution

Trevor worked with Jerry Rutter, President of PI Certified Partner MindWire Group, to roll out the PI Behavioral Assessment™ first as part of the operations department’s hiring process, then across the rest of the organization. Prior to bringing candidates in or extending a job offer, they’re given the behavioral assessment—and, more recently, the PI Cognitive Assessment™ as well.

“We’ve been hiring exclusively from the behavioral assessment for almost a year, and now our sister companies are starting to use it as well,” said Trevor. “Since we added the cognitive assessment, attrition has become even lower with new hires and performance has gotten even better, obviously, because it’s a great predictor of quality talent.”

Trevor then took it a step further, using the PI Inspire solution in the onboarding process. At Master Electronics’ biweekly new hire orientations, each employee receives their behavioral report and a Relationship Guide to show them how to best communicate with their manager. The group, which is made up of employees from all different departments, is taken through a 45-minute explanation of their Reference Profiles and how employees relate to one another using the Team Work Styles map (now Team Discovery).

“What I’ve seen is that, over the last year, there’s less of an ‘us versus them,’” Trevor said. “[Now it’s], ‘Hey, we’re on the same team here. We all work for Master Electronics.’”

The Results

Since implementing PI to hire better candidates and cultivate better working relationships, the Master Electronics leadership has shown employees they’re committed to making the company a great workplace. The results speak for themselves:

• Total company attrition dropped from 71% to 38%.
• Distribution center attrition reduced from 111% to 58%, a 53% decrease.
• Headcount increased by 13% while new hire attrition dropped by 32%.
• By reducing turnover, the company saved $2 million in recruiting, onboarding, and training costs.

“It does show all of the impact of what we’ve done. People are feeling it and seeing it,” said Trevor. “I think PI has probably been the most important thing we implemented in the last year. For me, the value can’t be quantified.”