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How to Improve Dispensary Employee Retention and Reduce Turnover

14 May 2020  |  10 min read

Improve dispensary employee retention and reduce turnover

Working in the cannabis industry since 2014, I have seen many established businesses switch their main focus toward employee retention. At the end of the day, to have happy patients and customers, you need to have happy employees.

As the cannabis industry grows and hundreds of organizations and opportunities are surfacing with legalization, what is your plan of action to create a solid foundation where employees are engaged, motivated, and successful?

Read on for ways to retain your employees, including budtenders, dispensary managers, security guards, and receptionists, the impact turnover has on your team and business, and how to develop your team into industry leaders.

How to retain dispensary employees

Employee retention is a more complicated topic than most people think. It’s not just about culture, or pay, or bosses. It’s a combination of their whole work experience.

The best way to retain your employees is to look closely at your training procedures, how you motivate and engage employees, your competitive advantage, and your leadership.

Training

The first step after hiring dispensary staff is to provide adequate training that emphasizes important areas of the business, including technology, compliance, customer experience, and cannabis product knowledge.

Providing a detailed overview of your retail cannabis business will reduce employee turnover significantly, because training helps them feel confident in their role. Investing time into your new hire also demonstrates commitment to their growth and success.

Invest in dispensary employee success through training

Consider creating a dispensary employee handbook that clearly outlines all expectations, policies, and procedures so that all employees get the same information. This is important because companies without an onboarding plan only have a 1 in 2 chance of retaining the new employee.

Every employee, regardless of role or part-time, must be trained on your dispensary standard operating procedures, compliance requirements, state laws, and products. It’s your responsibility to ensure every employee in your store can answer customer questions, speak intelligently about your cannabis products, and do their part to keep your dispensary in compliance with state regulations.

Companies without an onboarding plan only have a 1 in 2 chance of retaining the new employee, according to ClearCompany.

During the training or onboarding process, also incorporate your company's vision, mission, and overall goals for the upcoming year. This will provide your employee transparency and will set the stage for success. It also makes them feel like part of the company’s future. Be sure to demonstrate exactly how that new employee’s role impacts your overall success.

Remember that training doesn’t just happen on day one; build regular check-ins into your onboarding program to ensure employees have what they need to be successful. This is especially important for entry-level employees, or those who are brand new to working in the cannabis industry.

And every time you get new products into your store, ensure all employees, but especially your budtenders or sales associates, are informed and educated on that product so they can adequately sell it.

Read next!

How Top Dispensaries Combine Training and Team-Building for Maximum Revenue

Dispensary employee motivation and engagement

Once your dispensary employees are onboarded, trained, and operating effectively, don’t forget about them. Research shows that for employees to be happy and engaged, they need to have positive relationships with coworkers, feel valued and respected, and be committed to the organization. So how can you cultivate this in your staff?

Some simple ideas include transparent communication, opportunities for advancement, and regular feedback loops. The field of human resources has long studied employee engagement, so look to other industries for ways to keep employees motivated and happy.

Then, get creative with the ways that you motivate your team to stay engaged!

Come up with ideas to strengthen your culture, to encourage productivity, attention to detail, and provide ways to go above and beyond the normal expectations. Recognize small wins and inspire your team to see your vision.

One idea is to create gamification that builds team bonding and allows for friendly competition. Here’s a basic BINGO example, encouraging budtenders to sell various CBD and THC products or completing other tasks during a given time period:

Budtender Bingo

  • Get 3 new reviews shouting you out!

  • Sell 20 edibles from a top brand

  • Highest total sales for the week

  • Learn a new skill from a teammate

  • Sell 3 slabs of shatter (7g)

  • Sell $250 worth of accessories

  • Biggest cart size of the week

  • Highest customer count for the week

  • Sell 25 tinctures

  • FREE SPACE - do a happy dance!

  • Sell 112 grams of premium shelf flower

  • Create flashcards for new hires

  • Sell 40 grams of concentrates

  • Highest average order for the week

  • Sell 4 product types in 1 transaction

  • Sell 30 Mary’s Medicinal patches

Another simple idea is to have awards, maybe Budtender of the Month, honoring the person who sold the most in a defined time period. Make it a regular occurrence where everyone can celebrate the winner. This not only inspires healthy competition, but also rewards high performers in front of their peers. Giving a reward or trophy increases the perceived value of the recognition, making it feel more selective and desirable.

If you don’t want to foster competition, consider encouraging solidarity and cooperation, like having specific days that staff all wear certain branded shirts or color schemes.

Dispensary employees wearing matching shirts

Competitive advantage

What sets your cannabis dispensary apart from those that surround you?

It’s very likely that the wages of your competitors will reflect similarly to the wages that you offer. So how else can you make star cannabis professionals work for you?

One way is to offer benefits and programs beyond just pay and commission. Vangst, a leading cannabis recruiting company, found that:

  • 71%

    of dispensaries offer health benefits to their employees

  • 51%

    of dispensaries offer dental insurance to full time employees

  • 46%

    of dispensaries offer vision insurance to full time employees

  • 46%

    of dispensaries offer all three to full time employees

For job seekers, benefits are an increasingly important part of the decision when selecting a new role or a new career direction. Based on Vangst data, approximately 1 out of 2 dispensaries offer full employee benefits.

You can easily be more of a desirable place to work than the cannabis dispensaries down the street by offering your employees a comprehensive benefits package, especially if you also have benefit options for part-time employees.

1 out of 2 dispensaries offer full employee benefits, according to Vangst.

Offering benefits doesn’t just help you attract great new employees, but also helps to retain employees because leaving could mean losing insurance. That’s a risk many people aren’t willing to take.

You could also consider the following employee benefits as a competitive advantage:

  1. 401K plans (also consider giving employees a match for investing in their future)
  2. Paid time off
  3. Employee discounts
  4. Friends & family discounts
  5. Profit sharing
  6. Event tickets
  7. Anniversary date awards
  8. Sales/performance awards
  9. Free food (like Friday morning donuts or a monthly team lunch)
  10. Regular pay increases based on performance
  11. Advancement opportunities
  12. Education opportunities

Leadership

We’ve all heard the old adage: People don’t leave bad jobs, they leave bad bosses. It’s true. Even if all factors were the same, your staff will eventually leave if your leadership isn’t great.

Your culture has the potential to separate you from other cannabis businesses, and the leaders you put in place to oversee store operations and lead the future of the company will have a tremendous impact on this.

Do you have someone managing your team, or do you have someone leading your team?

Great leadership is important for retaining dispensary employees

This is an extremely important question to ask yourself as you explore employee retention. A leader will build a culture of development and tenured employees. This will in turn create opportunities for internal promotions and recognition for growth.

The less appealing part of leadership is identifying those that are not contributing to the team, the employees that do the bare minimum, or cause conflict within the store. What do you do with these team members when your focus is employee retention?

Well, tough decisions need to be made to preserve the culture and morale within the store. Employee performance plans are a good start, but if it comes down to it, an upset or underperforming employee is likely to negatively impact other team members the longer they stay within the organization.

If you aim to have great leadership, you will also end up with great employees, and a thriving business. You can’t put too much focus on this; companies with negative cultures will always struggle with turnover, a poor reputation, and ultimately, success and expansion.

The impact of dispensary employee turnover

There is a real business and team impact of high turnover. First, it’s more expensive to find and train new employees than it is to retain them.

“Employee turnover and retention have been the subject of many business discourses, with the general consensus that the cost to replace a valuable employee can be up to 213% of the annual compensation for that employee’s role.”

Second, if people come and go regularly, it’s hard to build a great culture, foster engagement, and boost retention. This revolving door will inevitably cause morale to fluctuate.

If you’re seeing a lot of turnover, it’s important to be transparent with your employees about changes within the organization. Make sure you have messaging when people leave, whether it is on good terms or not. Communication is vital in balancing the morale within your team and redirecting the focus back to the fundamentals of the store.

If a skilled employee puts in their two week notice, conduct an exit interview to see what has prompted the resignation. Spend time understanding why your good people are leaving and use this feedback to find ways to improve your employee experience.

The cost to replace a valuable employee can be up to 213% of the annual compensation for that employee’s role.

Center for American Progress

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How to build your employees into industry leaders

Now that you understand how to encourage retention and discourage turnover, let’s talk about ways to further engage your top performers.

Here are a few ideas on how to build up your team into industry leaders:

Education opportunities

  • Provide your team with a wealth of knowledge about products, cannabis research, workflows, and procedures.
  • Foster a mentorship program to inspire your team at a high level.
  • Make sure your leaders are continually touching base with team members on their goals and areas of opportunity to expand their knowledge and role.
Turn your dispensary employees into industry leaders

Growth and development classes

  • Offer leadership classes to encourage an open mind of how to motivate and lead a team. Look to local recruiting or HR organizations for materials to help cultivate your leaders.

Succession planning

  • Create a plan of action for team members that display willingness to grow within your company. Identify areas where they would like to develop and follow through with developmental progress.
  • Make sure more than one person can do every role. Document processes and procedures so if something were to happen to a key employee or leader, others could step in to support.

Cannabis associations

  • Encourage team members to join cannabis associations and advocacy groups for the industry.

Community events

  • Partake in community events to spread knowledge about your business and cannabis.
  • Encourage employees to be active in the community, including volunteering, serving on boards, or just participating to strengthen their (and your) bond with the community you serve.

Monthly meetings

  • Hold monthly meetings with the entire team to review last month's wins, changes in expectations, new products, etc. This is also a great time to provide some food and have a formal awards ceremony.

Team buildings

  • Host team building events for team bonding and fun outside of work!

Conclusion

When I first got hired into this industry, I was told this is a ‘million dollar ticket.’ I didn't quite understand what that meant at the time, but now it’s very clear. This was a way to instill the value of my position as I entered the cannabis industry. I had an opportunity ahead of me to be a successful cannabis professional, if I wanted to take it.

In this industry, there is constant change. With that comes immense opportunity for growth, development, and career stability. With motivation, knowledge, and dedication, you can do whatever you put your mind to. Show that to your team.

If you give your staff the tools to succeed, effectively onboard/train, creatively build engagement, demand greatness of your leaders, continually increase your competitive advantage, and work to turn your staff into industry leaders, your cannabis dispensary will be more successful than any of your competitors.

Image from i OS

Stefanie Deaguero

Customer Success Manager

Stefanie is a Customer Success Manager at Flowhub, where she helps dispensaries use Flowhub products to create efficiency with operations, standardize workflows, and ensure compliance. Stefanie joined Flowhub in 2019. Prior to joining Flowhub, Stefanie was a cannabis retail leader focused on building retail teams and standard operating procedures to streamline compliance.

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