It's fair to argue that the biggest problem facing quick-service operators isn't government intervention or getting and keeping customers. It's hiring and retaining employees.
Multiple sources set the United State's restaurant industry's annual turnover average near 130 percent, a shocking number few operators seem able to reduce. When it costs restaurants an average $3,000 to replace a single hourly employee, the bottom line suffers, morale takes a hit and ultimately customers suffer.
Some companies, however, are enjoying strong retention levels by providing both hourly employees and store-level managers increased benefits. Where promises of higher pay often keeps peripatetic employees jumping from one job to the next, some operators say offering health and dental insurance, 401k opportunities and other less tangible support keeps them onboard longer. To boot, some say their employees are happier, perform much better in their roles and, in the end, serve guests better.
At Pollo Campero, which has 21 units in the Western United States, every employee is eligible for health insurance (80 percent of which is paid by the company) and dental insurance (100 percent is paid). They are also eligible for the company's credit union and can participate in its 401k plan. As if that wasn't enough, the company negotiates special rates for employees using public buses to get to work, and deals at local health clubs.
If one looks only at the cost, the investment appears high, said Frank Mitchell, vice president of human resources and governmental affairs for Pollo Campero in Los Angeles.
"But if you look closely, it's not as bad as it seems because that investment repays us in terms of lower turnover," Mitchell said. "Our turnover rate is 34 percent: nearly 100 points lower than the national average. If we're not spending money replacing people, we can put money into other things like benefits."
Pollo Campero's employee retention is so strong that 80 percent of its managers began as hourly employees who were promoted from within. Mitchell said the company's culture builds pride among the staff to the point that a job at the chicken chain isn't just a stop along the way to a college degree, it's the first step on a career path.
"They're proud of working for the company and they want the customers to feel it too," he said. "They know we care about them. So when someone else comes along with an offer of 50 cents or a dollar more an hour, it's not much of a lure to them."
Mike Schneider, co-founder of The Loop Pizza Grill, said throughout the company's 26-year history, he's worked to maintain a family atmosphere by meeting employees' needs at every level. Happy workers please customers, so in addition to traditional insurance benefits, The Loop has sought to help staffers on spiritual and emotional levels as well.
Two Loop programs, Corporate Care Works and a Chaplaincy Program, were created several years ago to provide counseling and coaching for employees dealing with conflicts at work and at home. The programs help with substance abuse, stress reduction and helping workers financially if necessary. Both programs include 24-hour hotlines employees can use to call licensed counselors for immediate assistance.
The goals of those programs, Schneider said, is to boost productivity, reduce absenteeism and retain valuable employees.
