Home Depot’s New HR Leader Faces Tall Order

It appears Home Depot’s new human resources chief, Tim Crow, is going to have to hit the ground running to tackle two of the most pressing issues facing the Atlanta-based building supply retailer: meeting an aggressive recruitment target of 15,000 hires and overcoming gaps in customer service.

 Crow replaces Dennis Donovan, the executive vice president of human resources who tendered his resignation February 1. Crow joined Home Depot in May 2002 as vice president of performance systems. In February 2005, he was promoted to senior vice president.

“It would be difficult to understate the important role that Tim and his HR team will play in getting the company back on track,” says Jeff Sonnenfeld, a professor at the Yale School of Management.

Preparing for the busy spring and summer season will be no small feat. Home Depot, which already employs 355,000 workers and has 2,171 stores worldwide, plans to recruit 15,000 new employees for a variety of part-time and full-time positions in sales, night operations and specialty departments, says company spokesman Ron DeFeo.

Crow was not available for comment.

Meeting recruitment goals will vary drastically for Home Depot, depending on the position being filled, says Susan Hartman, director of retail recruitment consultancy HireQuest. Skilled employees being wooed for corporate jobs may hesitate to join the company in light of the recent departures of Donovan and CEO Robert Nardelli.

The managerial shake-up, however, is unlikely to make a difference when it comes to recruiting rank-and-file employees—either because they are unaware of the corporate brouhaha or because they simply don’t care.

“A cashier will have a much different attitude and level of understanding regarding the departure of Nardelli and Donovan” than someone at the corporate level, Hartman says.

The recruitment goals are attainable, but if Crow wants to give customer service a much-needed shot in the arm, he is going to have to reduce the high ratio of part-time workers, Sonnenfeld says. Only 20 percent of Home Depot’s workforce is made up of full-timers, which has had an adverse impact on customer service, he explains.

“Part-time workers are useful,” Sonnenfeld says. “But they present drawbacks in that they lack deep expertise and there’s high turnover, which are bad for service-oriented industries such as retailers.”

One of Crow’s most critical tasks is reviving the culture of strong customer service that Home Depot had before Nardelli became CEO in late 2000. His centralization policy made the company more efficient and saved it money, but it also eroded employees’ entrepreneurial spirit. Service suffered, Sonnenfeld says.

Besides increasing the number of full-time workers, Home Depot can enhance the quality of customer service by bolstering training and giving workers more power to make decisions. “This can be turning point for the company,” Sonnenfeld says. “Breathing back creativity and a sense of ownership among workers should take center stage.”

Analysts have urged Home Depot to work on shortfalls ranging from messy aisles to lackluster customer service.

Company earnings fell 3.1 percent in the third quarter of 2006 to $1.5 billion. Aggravating the situation, sales in that quarter at stores open at least a year dropped 5.1 percent. The company has already hinted that fourth-quarter results may lag expectations.

—Gina Ruiz