People Report panel: respect equals retention

Nation's Restaurant News,  July 2, 2007  by Dina Berta

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IRVING, TEXAS -- Hourly employees in quick-service restaurants want to be treated with respect and work hard, yet have fun, a group of young workers told some 150 foodservice executives at a conference here that focused on turnover reduction in the fast-food segment.

Being appreciated has kept her working for Whataburger for the past three years, said Erica Sampson, a student at the University of Houston who works at a branch in Euless, Texas.

"I'm well-respected at work," Sampson told operators and HR executives who attended the inaugural QSR Workforce Symposium, hosted by People Report, a Dallas-based research firm that tracks human resources practices among more than 100 member restaurant companies.

Also on the panel were high school seniors Austin McManus, who works at a Little Caesars in Plano, Texas, and Chris Billups, who works with Sampson at the Whataburger in Euless.

Quick-service restaurants have higher turnover rates than other segments do, said People Report president Teresa Siriani. Hourly turnover in the category was about 141 percent last year, while limited-service restaurants had a rate of 124 percent. Casual-dining employees turned over at the rate of 107 percent, and fine-dining workers did so at a 90-percent rate.

Management turnover was 39 percent for quick-service restaurants, 34 percent for limited-service restaurants, 25 percent for casual-dining chains and 26 percent for fine-dining restaurants, Siriani said.

As a segment, quick service pays female general managers better than male managers, and GM salaries also have an impact on employee retention, Siriani said.

"Companies that were in the bottom third in what they were paying their GMs in base salary had GM turnover of 38 percent," she said. "Those that were at the top of the game when it came to GM base salary had only 25 percent GM turnover for that same year."

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Managers who recognize and reward employees will do a better job of retaining them, the panel of workers advised.

"I want to have fun, but you also need to tell people they are going to have to work hard," said McManus, who plans to attend culinary school after high school.

Billups encouraged operators not to be too hard on applicants when they are taking tests and being interviewed. They might be very nervous and not do as well, he said.

Attendees also heard from operators on ways to develop and retain employees.

Corner Bakery Cafe, the fast-casual chain that's a division of Corte Madera, Calif.-based Il Fornaio (America) Corp., considers diversity and retention goals in evaluating managers, president Jim Vinz said.

"Almost a third of their balance score card is people metrics--how are they doing on retention and diversity," Vinz said. "Their direct compensation is based on [diversity and retention rates]."

Offering health care also boosted retention at quick-service restaurants, Siriani noted. Those employers that offered it, even if only to a small percentage of eligible employees, saw lower turnover.

Employee health fairs have resonated with employees of the Ann Arbor, Mich.-based Domino's Pizza chain, said Patti Wilmot, the executive vice president who oversees human resources. "You can reach out and partner with organizations like the Diabetes Association, or have blood pressure checks done," she said.

Attendees also heard how Pal's Sudden Service, the Kingsport, Tenn., based fast-food chain, used the criteria for the Malcolm Baldrige National Quality Awards of the U. S. Department of Commerce to good advantage. Pars made history by becoming the first quick-service brand to win the prestigious Baldrige honor in the late 1990s.

When the chain began using the criteria to define its culture, Pal's average annual unit volume was a little more than $700,000. Last year it was $1.7 million, chief executive Thom Crosby said. Hourly turnover previously had been in the mid-200-percent range, but is between 60 percent and 75 percent today. Only 2 percent of assistant managers turned over last year, and the chain has not lost a general manager in the past four years.

dberta@nrn.com

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