Retention: Going Deep
Panera’s detailed assessment of managerial applicants leads to long-term employment.
By David Farkas, Senior Editor -- Chain Leader, 5/1/2007
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“Grease-free environment.”
“No late nights.”
“No alcohol service.”
So boasts the copy on Panera Bread Co.’s Web site advertisement for managers. No doubt such qualities--many of them are unusual in a limited-service format--not only help attract employees but also account for low turnover: 22 percent among company-store managers in 2006.
“They’re huge,” declares General Manager Cory Plaster, who managed a Burger King restaurant before joining the 1,027-unit chain six years ago, “and the reasons a lot of managers come to Panera. We’re not here until 2 a.m.”
As attractive as they are in an industry known for long hours under demanding conditions, those attributes don’t completely explain why general managers at company-owned units stay an average 3.9 years, according to officials. For assistant managers it’s 2.7 years. (Panera doesn’t track manager turnover among its 636 franchised outlets.)
The fast-growing chain is also quite careful about picking the right people to run its high-volume eateries, which average $2 million per store. The task is all the more crucial considering that two-thirds of this year’s crop of 640 new managers will be hired from outside the company. Chief People Officer Rebecca Fine estimates Panera will hire 770 in 2008.
The Right Fit
The hiring process, which the company says is “systematic and objective,” starts with recruiters who screen applicants to determine potentially good fits. Often the screenings take place at units during “open houses,” where recruiters explain benefits “and what it’s really like to work here,” says Fine, an HR veteran who joined the St. Louis-based company in August 2004. “You can do 30 to 40 people for new bakery-cafe staffing.”
Later, district managers call the applicants who the screeners liked and ask a few questions to gauge interest. The person is then invited to fill out a 74-item questionnaire called QuickSelect, which includes open-ended questions like these: Compared to others, how well do you learn new procedures? Which has been the best way for you to lead people? Recent daily sales totals are $4,200, $4,704 and $5,268. If this trend continues, what are projected sales for the next day?
Fine says the assessment tool, which the company has used for about two years, reveals how well potential managers solve problems, lead teams, maintain quality, remain flexible, communicate and take care of customers. Once completed, the questionnaire is faxed to a Dallas-based testing company, which returns an evaluation to the manager within 30 minutes.
While the results of the test are not necessarily deal-breakers, they do reveal whether applicants have the ability to manage in a “hybrid” environment, as Fine calls it. That means managers must be able to adjust to both demanding production and service sides. Operating a Panera, she adds, is unlike the typical QSR experience, where production-oriented managers thrive. At Panera, service-oriented leaders are required. “There’s a lot of activity going on in our restaurants,” Fine says, “and it’s a lot to manage.”
Once the results are known, interviewers--usually district managers--delve more deeply into the applicant’s thinking. “[QuickSelect] doesn’t say pass or fail. It gives you areas to probe,” Fine explains. “We see a lot of ‘highs’ in one thing and ‘lows’ in another. We want to probe to see whether it’s a real [high or low] or a byproduct of how we asked the question.”
Fine won’t go as far as saying using a customized questionnaire is entirely responsible for revealing managers that have the potential to thrive at Panera. “I don’t know if this specific tool leads to that. I have to prove it out,” she says. “But having a focused interview is better than not having one.”
Her uncertainty stems from the lack, to date, of human resource data, largely the result of Panera’s rapid expansion. “We’re building people metrics along the way, and we’re still working to connect data points,” she admits. “It’s all feeding together, but I couldn’t say that if I pulled [QuickSelect] out tomorrow, I would see things drop.”
Attractive Growth
The type of people applying has something to do with their commitment, she says. “I think the concept attracts a higher quality pool of individuals. They have an interest in being a part of a concept that’s growing,” Fine reasons, adding Panera’s benefits package isn’t that much different from others.
“They believe in the concept and in hard work,” says Plaster, noting his four assistant managers were general managers at other restaurants before joining Panera. “These are adults that really have it together.”
Asked how she defines higher quality, Fine explains that behavioral-based interviews quickly show whether the interviewer and interviewee are connecting. “You know when someone is telling you what you want to hear,” she says.
Panera doesn’t ignore work history and job growth. “If someone says they were struggling in a place doing $15,000 a week, we know there’s a question of whether they will fit here,” she says. Panera units averaged $39,150 a week in 2006.
Fine says interviewers listen for things like how an applicant followed up with a customer by taking “a few extra steps the next time that customer came in.” Consumer research shows Panera’s employees are on the whole friendlier than at other QSRs, Fine claims.
“We talk about finding ‘Panera warmth’ in a person,” she adds.
Making Connections
That also translates into a manager’s ability to be proactive with hourly workers. “If you know people are on ball teams or do academic things and will need time off, you acknowledge that before they ask for time off,” she says. “It’s called connecting, recognizing that people have needs.”
Fine admits not every new manager does this automatically. “The reality is you have the 20 percent who will always do it,” she says. The rest are trained. “The first week of training is enculturation,” she notes.
The company trains new managers for eight weeks, most of it in the employee’s market. It includes three days of professional baking lessons and three at headquarters where Chairman and CEO Ron Shaich and other top brass including Fine talk about what it means to work for Panera.
“We have all these people coming in,” Fine says, “and you have to find out if they’ve ever been with a growth company before and how they coped.”
The absence of late nights may be all it takes. Says Plaster: “One of the AMs came from casual dining six months ago, and he still can’t believe he goes home so early.”
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