Re-Tales

Last month's column looked at the hi-fi industry's struggles with recruiting and retaining qualified staff. For that article, Specialty Sound and Vision's Anthony Chiarella, also director of sales and marketing for Gryphon Audio and Brinkmann Audio, made a comment that bears repeating here: "If we're going to have a future in hi-fi, we have to make it worthwhile to make a career in hi-fi." How might that be achieved?

Achieving that key objective requires achieving another one: How do we make more people aware that our industry exists?

Long ago there was a saying. People (read: guys) need three things: a camera, a car, and a stereo. Now two of those three are on your mobile phone. Hi-fi is no longer a cultural given. People need a reason to visit hi-fi stores, let alone to want to work in one. People need to know that it's not all service-industry retail with the salaries that go with it. "Could the industry pool its resources and do a 'Better than Best Buy Google AdWord buy'?" Chris Forman, projects director and junior partner at New York City's Innovative Audio, wondered aloud.

Wider awareness could help in many ways—not least, the possibility of revving up a new group of folks about hi-fi. Forman said, "I don't know how we reignite the passion. We are the aspirational place and sales location for the end user. We also need to be the aspirational employer for the sales staff and tech staff that want to support this as an industry." What could be better than to earn a living sharing music and these cool, exclusive toys?

Offering salespeople better pay and benefits seems like an obvious solution. But after all those dealer costs—inventory, real estate, taxes, tariffs—offering higher pay isn't so easy. It's even more expensive to retain talent—and pay rent—in markets with higher costs of living, such as the San Francisco, L.A., and New York metro areas. Then again, those markets have a greater concentration of wealth than most—and ostensibly, more opportunities to sell to customers who have more disposable income, potentially yielding more profit for dealerships and more income for salespeople.

Income stability can help with employee retention. Forman said that Innovative Audio, which has been around for 50 years, recently made some changes to its compensation packages, shifting from a strictly commission-based structure to a package of base salary, commission, and bonuses. "Having one toe in the management side and one toe in the sales side, I recognize that there is a need to protect our salespeople by giving them a base salary so [that] they're not living on a draw against commission," Forman explained. The new approach also acknowledges that salespeople do more than just sell. "There's also a core group of tasks that I believe are required of salespeople, like marketing initiatives that should be compensated." He also told me he'd rather pay each of the salespeople a percentage of a receptionist's salary and have them share a receptionist's work than to pay an actual receptionist.

Ray Benza, CEO of Entertainment Technology, which is located in the Bedford/Mount Kisco area in upper Westchester County, New York, is another industry veteran, having worked in car stereo, consulting for Harvey's, A/V, and satellite communications systems. He launched Entertainment Technology in 1998. Of Benza's seven current employees, five have been there for more than 15 years. A sixth recently retired after 18 years.

Before COVID, ET had 14 employees. Four were furloughed during COVID, two were rehired, a few just left, and a few new employees were hired.

ET employees' compensation package includes salary, commission on certain products, some performance bonuses, and a 401k plan. That package is sufficient to retain at least the high performers. "The guys that are really good are staying here," he said. The job also comes with perks beyond the obvious: being able to play with some pretty cool toys. "If we need them to go to school, we send them to school," he said. ET staff visit CEDIA, AXPONA, and other shows, not just to staff rooms but to increase industry awareness.

Approaches to sales staff retention and compensation varied, but there are clear patterns across the industry. Greg Hanson, founder and owner of Ohio's Hanson Audio Video, keeps employees engaged with training, teamwork, and profit-sharing.

He and his son Troy own and operate two large, purpose-built showrooms, one in Dayton (their city of origin) and another in Cincinnati, about 50 miles south. Both stores carry equipment for two-channel audio and home theater and offer custom-install services. Hanson provides ongoing weekly training for employees, in addition to some manufacturer presentations and programs, such as McIntosh's Masters Training. Hanson has a standards manual for its 34 employees.

"We spend a lot of time and effort on education," Hanson said by phone. They seek employees with "the right kind of personality—more of an aggressive person who can get through our training program. They're our best employees, homegrown with a willingness to learn on an ongoing basis."

Surprisingly, Hanson's compensation package is not commission-based. "I'm not a big believer in commissions," Hanson said. He speaks from experience—much earlier experience in a different industry, in which he was a national sales director at a company with a commission-based system: "Disputes happened all the time," he told me. At Hanson, he says, not having commissions has "worked out well for us. There's a lot more team spirit and working together. No one's fighting over a territory or a customer or a deal."

Profit sharing is key to making the Hanson Audio system work. "The basis for how we do that is a team effort," Hanson said. Hanson has had growth and bonuses in every one of the 26 years the company has been in business. "That keeps people energized and focused," Hanson added.

Summing up Innovative Audio's perspective on recruiting sales and technical staff, Forman said, "We recognize the need to incentivize people to want to do this, to enjoy it, and to be rewarded at the end for a job well done." Accomplishing that remains, at Innovative and elsewhere, a work in progress.