Compensation: Coffee Perks by the Hour

A menu of benefits for hourly workers helps Diedrich keep turnover down.

By Monica Rogers, Contributing Editor -- Chain Leader, 4/1/2006

Having lots of benefits doesn’t guarantee lower turnover, but as Irvine, Calif.-based Diedrich Coffee can attest, it sure helps. With an hourly turnover rate of 90 percent, the 65-unit coffee chain is well below industry average and believes good benefits are part of the reason.

“Hourly turnover has continued to fall over the last five years as we refined our work incentives to help us compete in a very aggressive labor pool,” Vice President of Human Resources Matt Kimble says.

“Benefits are just one in a menu of reasons hourly workers choose to work with us,” he says. “But the fact that we offer hourly team members full benefits and a paid vacation plan does set us apart from the competition.”

Count the Ways
Diedrich just added paid vacation days for both part-time and full-time hourly positions this year.

The company also recently introduced a generous employee-referral bonus plan. After referring new hires, employees receive $50 at the time of hire and another $50 after 90 days. Anyone referring candidates viable for management positions gets even bigger perks: $300 to $600 at the time of hire and $300 more 90 days later.

Keyed into employee desires, Diedrich’s corporate discount programs allow employees to purchase products and services such as cell-phone plans, health clubs, pet insurance and entertainment venue tickets at special prices. “The discounted entertainment tickets are especially popular,” says Kimble. “We sell upwards of $700 of those every month.”

Keep in Touch
To stay current on benefits that employees want, Kimble says, “Our operations team is in stores every day talking to hourly team members. And our store managers are very helpful in conveying ideas and needs.”

For example, stores wanted a way to celebrate employees’ anniversaries. So the company created the Anniversary Mug plan, where workers are recognized in front of their team and customers and receive coffee mugs in honor of their anniversaries. “We have received many positive comments on that,” Kimble says.

According to Kimble, hourly workers take advantage of the following benefits most: paid vacation days, holiday pay, discount programs, health insurance and the 401(k) program.

To get the word out about benefits, Diedrich communicates through the hiring process, district meetings and store managers as well as monthly fliers, e-mails and in-store posters. A detailed benefits manual explains all offerings, from health benefits to movie tickets.

“For many of our team members, this is their first job,” Kimble says. “We set the bar high so that they will remember us as the best job they ever had.

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