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© Copyright 2000 Rogers Media. The following article first appeared in the January 2001 edition of
BENEFITS CANADA magazine.
The Canadian Tire way
"I'm lucky to be an HR person at Canadian Tire. The company's founders did a lot of things right to
promote employee loyalty. " Janice Wismer, vice-president of human resources, Canadian Tire
By Sonya Felix
Janice Wismer's loyalty to Canadian Tire began when she was just a kid. The company's vice-president of
human resources recalls buying her first bicycle with Canadian Tire money. "I remember how exciting that
was," she says, reflecting from her spacious office on the 18th floor of Canadian Tire's corporate
headquarters in Toronto. "It gave me my first real independence and I never forgot it."
With such warm feelings, it's not surprising that when Wismer went to work for Canadian Tire Corporation
Limited six years ago, she felt like she was going home. "I'm not the only one here who feels that way,"
she says. "I hear lots of stories from other employees about how they bought their first bike or something
else that was important to them at a Canadian Tire store. Like me, many of our people say they love coming
to work because it feels like coming home." At a time when employers worldwide are struggling with
recruitment and retention issues, this is a powerful drawing card.
Canadian Tire has been measuring and documenting employee satisfaction on an annual basis since 1992. "On
every employee opinion survey, the satisfaction levels have gone up," says Wismer, who took on her current
role about a year ago. "In 1998 we scored in the very top percentile and the company thought it was a good
idea to do a best practices study."
At the same time, Canadian Tire decided to see how its practices compared to those of other businesses. The
company agreed to take part in a Best Companies to Work For in Canada survey being conducted by
Toronto-based Hewitt Associates and Report on Business magazine. "We decided we wanted to be public
about our accomplishments and we were curious to see how we'd stack up against other companies," says
Wismer.
After a rigorous competition with 61 other major corporations across the country, Canadian Tire ranked No.
1, beating out companies like Nortel Networks Corp. and Alberta Energy Co. Ltd. "It certainly boosted our
sense of pride in working for Canadian Tire," says Wismer.
The report was Hewitt's first Best Company to Work For survey in Canada, but it had already done
similar projects for three years in the U.S. with Fortune magazine. "Many of our Canadian clients
are also looking for advice on how to attract and retain talent," says Brian Toda, managing consultant for
Hewitt Associates in Toronto. "It's clear there's a shortage of talent in the world and everyone wants to
know how to get talent to come to their company. It's a strategic imperative to doing business."
DOING IT THEIR WAY
Canadian Tire, the country's largest hard goods retailer, consists of three business: retail, financial
services and gasoline outlets. Including staff on the retail side, the company has 38,000 employees across
Canada. (The retail outlets didn't participate in the Hewitt survey, which only looked at the corporate
side of the business comprising 6,000 employees in Ontario, Montreal and Calgary.)
One of the things that makes this homegrown success story a great place to work has a lot to do with "The
Canadian Tire Way," an umbrella phrase that covers all the corporation's employee programs related to
wealth, health, the employee's role, growth, work environment and the community.
Under each of these six categories, Canadian Tire offers a broad range of employee programs and perks,
everything from holiday gift boxes to employee retail discounts, annual parties, frequent public
recognition for jobs well done, opportunities for training as well as fully paid university tuition and a
generous profit sharing and stock purchase plan.
Many of these programs have been in place for years. In fact, profit sharing began with the Billes brothers
who founded the company back in 1922. "I'm lucky to be an HR person at Canadian Tire," says Wismer. "The
company's founders did a lot of things right to promote employee loyalty and we've continued many of those
ways to show employees how much we value them."
TOTAL COMPENSATION
As part of the total compensation package, Canadian Tire's long-standing profit sharing and stock purchase
plan plays a significant role in employee satisfaction. Every full-time employee and qualifying part-time
worker receives a share of 6.75% of the company's pre-tax profits.
Over the years, employees have, on average, been paid at least 11% of their base salaries. The money, which
is fully vested after two years, goes into two plans--a deferred plan and a taxable plan. Ten per cent is
automatically invested in the Canadian Tire Corporation Share Fund and the remaining 90% goes into four
other investment funds.
About 80% of employees also participate in the stock purchase plan, contributing up to a maximum of 10% of
their salary towards Canadian Tire shares. At the end of the year, the company gives employees 50% of what
the employee contributed in additional shares. The retailer also pays the income tax on its contributions.
"This type of plan makes everyone feel like owners in the company," says Wismer. "It encourages them to
speak up, to give their opinions and to challenge ideas."
Late last fall, employees received ballots asking them to vote on changes to several aspects of the profit
sharing plan. "[Those holding] seventy-five per cent of the dollars in the plan have to approve any changes
that are made," explains Wismer.
David DiFelice, manager, customer service analysis for Canadian Tire's credit card division in Welland,
Ont., admits that he didn't think the profit sharing plan was a big deal when he first started working at
the company five and a half years ago. Now, he says the plan is certainly one of the important components
of working for Canadian Tire. "I appreciate it more over time," he adds.
DiFelice isn't sure that the perk is enough to make anyone stay in their job though. "It depends on the
individual," he adds. "I don't think pay is a big part of the basis for working here. Instead, I think
Canadian Tire is a great place to work because there is respect for the individual and the culture is tough
to duplicate. This is a unique place where people feel they can make a mistake and trust they will be
treated fairly. Over time I've seen many examples of that."
It's probably a good thing that pay isn't a high prerequisite for employees like DiFelice. While Wismer
insists that Canadian Tire's base salaries are competitive within the industry, she admits there was a time
when the profit sharing plan was intended to make up for lower wages.
Wismer adds that even staff who are recruited by other companies that can deliver better pay don't bite at
the offers that often. For example, in the information technology area of the company the turnover rate is
only 6%, she says.
BEYOND PAY
More important than pay is the corporate culture at Canadian Tire, says Wismer, which allows lots of
flexibility and opportunities for personal and professional growth.
Twenty-seven years ago, Len Foster started working at Canadian Tire's distribution centre loading trucks.
Today he is senior director of human resources for supply chain in Brampton, Ont. During his years with the
company, Foster has completed an undergraduate degree, a college diploma and is now working on his MBA.
"It's all been funded by Canadian Tire," he says.
"These opportunities exist for any employee," adds Foster. "At any given time a large percentage of our
staff is engaged in continuing education. I believe we have the most dynamic education program in Canada."
Not everyone who benefits from Canadian Tire's tuition reimbursement sticks around though. The company paid
the full $52,000 cost of an executive MBA for its former senior director of distribution operations. The
fellow left the company shortly after he completed the program.
"We'd made a significant contribution to [him]," concedes Wismer. "It was disappointing to see him leave.
But Canadian Tire can't be a closed environment. If we want fresh talent to come in we have to realize that
people will also move on to other things. We have a commitment to lifelong learning and who knows, maybe
[he] will come back to work for us some day."
FLEXIBLE CULTURE
In addition to its generous education benefit, Canadian Tire offers flexibility in its health benefits plan
and working hours. In fact, a commitment to flexibility is one way Canadian Tire tries to help employees
meet the challenges of both their work and family lives. "Flexibility is part of our corporate culture,"
says Wismer, "I think it is directly related to our low turnover rate."
Daily working hours, as well as the number of hours or days of the week that an employee works, accommodate
conflicting demands that arise from family responsibilities, commuting as well as fitness and school
schedules. Employees can work from home too if the need arises.
Canadian Tire was also one of the first companies in Canada to implement a flexible benefits program.
Employees can choose from a range of health benefits, including optional disability and life insurance.
They can even use flex dollars to purchase extra vacation days.
Although the profit sharing and stock purchase plans are intended as retirement savings, the company
recognizes that employees may have different reasons for saving money. Eligible employees who want to save
for a home or pay off an existing mortgage can have a portion of their annual profit sharing award put into
a separate personal interest-bearing bank account for that purpose.
The Home Ownership Assistance Plan amount is allocated as all or part of the taxable portion of the profit
sharing award. As well, employees can withdraw from their vested profit sharing holdings to pay the
education costs for their children. Canadian Tire employees also have the option of contributing to a
no-fee group registered retirement savings plan.
One of the most impressive aspects of Canadian Tire is the company's ability to blend top-notch benefits
with business success. The plan sponsor operates in a difficult sector that is renown for cut throat
competition and low profit margins. "Canadian Tire is competing head to head with Wal-Mart, Home Depot and
other U.S. retailers," says Rob Gerlsbeck, editor of Hardware Merchandising magazine. "Overall, it
has done exceptionally well."
Gerlsbeck points out that in the early 1990s when Canadian Tire was taking a beating from larger U.S.
competitors and the Canadian recession, business analysts virtually wrote the company off, labeling it as a
"retailer that was going to die." In 1993 and 1994, Canadian Tire imported its recently departed president
Stephen Bachand from the States and embarked on an aggressive process of revamping its stores. The two
moves turned the operation around--a comeback that was accomplished without a notable downsizing of staff.
Last year, the company posted an increase in sales at the store level of 7.7%. Pointing to the demise of
other domestic retail giants over the years such as Woolco, Eaton's and Zellers, Gerlsbeck calls Canadian
Tire "the last of the true great Canadian retailers."
LOOKING AHEAD
Canadian Tire has decided not to participate in the next Hewitt survey because of the recent retirement of
Bachand. In the meantime, the company is continuing to build on its tradition and look for ways to fine
tune employee programs.
The profit sharing plan will be refined according to how employees voted in the fall. There are also plans
to develop a learning network to help prepare employees across the country for leadership roles in the
company. In addition, new Web-based recruitment software is designed to help maintain consistent employment
levels and offer employees the ability to be matched up with job openings.
Whatever the company decides to do, one eye will always be on making sure employees are happy. "Canadian
Tire's name in the community is important," says Foster. "Our turnover rate is far lower than the industry
average. This is truly a great place to work where people are treated with dignity and respect."
Sonya Felix is a Toronto-based writer and regular contributor to BENEFITS CANADA.
sfelix@interlog.com.
*** ***
Dealers share in the Canadian Tire philosophy
Many Canadian retailers are being hit hard by the current labour shortage. This isn't surprising
considering retail is often thought of as a dead end with minimum wages, few benefits and little room for
advancement.
But not all retailers are suffering.
"I've got as many as 50 employees who've been with me for 20 years," says Bill Line, a Canadian Tire
associate dealer for 32 years with a store in Burlington, Ont.
Although he hires a lot of students who tend to come and go, Line says that the average turnover rate among
his core staff is low in relation to the retail industry as a whole. "I try to run my store like a family
business," he says. "My philosophy is that if you don't treat someone well, they won't treat you well
either."
Line doesn't have to offer his staff the same employee programs which are available to corporate staff, but
he says he'd be short-sighted not to. Eligible retail staffers participate in the company's profit sharing
plan and last year Canadian Tire contributed $360,000 as the share for Line's employees.
"Sometimes it's difficult initially to sell someone on the long-term benefits of the plan and some people
say they'd rather have cash," he says. "But as time goes on and the amount in the plan goes up they start
to see how great it is."
Some of the sales staff on the retail floor have investments that have grown to six digits, he adds. "There
are young people who've worked here since grade 10 who conceivably have $10,000 in the plan. Many use it to
pay for university."
Still, Line doesn't believe you can get people to stay with money. "We're on the leading edge for hourly
wages in retail. We also offer complete benefits, including group insurance and annual bonuses," he says.
"But, money won't hold someone--that's short-term thinking. You have to build an infrastructure with
recognition, opportunities for growth and respect."
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