Employee Retention: Looking Within for Answers
Slumping sales force human-resources execs to focus on their own problems despite good ideas from outside the industry.
By David Farkas, Senior Editor -- Chain Leader, 7/1/2009
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| Casual, relaxed and playful, employees at Zappos.com are encouraged to be “a little weird” at work, after being offered $2,000 to take a hike. |
“And we wish them well,” declares Director of Human Resources Rebecca Ratner, adding it's the Las Vegas-based online retailer's way of making sure only truly motivated people stick around. (By the way, if you take the dough, you can't apply to Zappos.com again.)
Here's another idea. Absorb the cost of medical insurance for every full-time employee. Zappos.com does. “The company pays 100 percent of co-pays and deductibles,” Ratner says. Turnover is very low.
Today, such ideas are patently foreign to restaurant chains. They've been busy trimming the cost of benefits, reducing contributions and removing perks as sales tumble. Who could possibly afford to give someone two grand not to work, particularly with so many job seekers? And given thin margins and skyrocketing medical costs, how could any restaurant company give away health insurance?
Fewer Future WorkersRestaurants nonetheless must find ways to attract talent, particularly entry-level managers, if they hope to fully staff their restaurants when the recession ends, argues Joni Doolin, founder and CEO of People Report, a Dallas-based work-force consultancy. She warns that the pool of workers under 25 years old—nearly half of all foodservice employees—is shrinking.
“Sixty-seven percent of this age group was in work force in the '90s. That figure has now dropped to 57 percent,” says Doolin, who recommends customizing benefits packages as one way of attracting employees.
Customizing benefits isn't exactly a new concept. Kate Shehan, vice president of human resources for Chicago-based Morton's The Steakhouse and president-elect of the Council of Hotel and Restaurant Trainers, recalls that customized benefits at the 84-unit chain once determined whether a candidate accepted an offer. “There was competition for additional perks like dry cleaning. People didn't hesitate to ask for something as simple as that,” she says.
Today, few job applicants demand companies pay for removing grease stains. In fact, Shehan has discovered that benefits, wages and perks are of relatively small concern these days. “It's really a different market right now,” she says. “People are grateful to have the basics.”
When Shehan looks ahead at how benefits might change post-recession, present difficulties impinge on the future. “One thing is the whole financial-planning piece,” she says. “People have been hit so hard. They have been laid off and unemployed for a long time or lost money in 401(k). An added benefit is financial advice. That is something we're considering.”
Back to Basics
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| Ruby Tuesday now bases employees’ 401(k) matching funds on comp sales. |
She maintains that matching funds will reach from 30 percent to 75 percent of an employee's contribution. That's roughly 35 percent more than the previous automatic contribution. Unfortunately, officials predict same-store sales will dip by 8 percent to 9 percent in the current fiscal year, which ends in June.
When Kitts imagines future benefits packages, she doesn't see them getting larger at the 902-unit company headquartered in Maryville, Tenn. “As we move forward, what we've learned from this recession is that we have to be careful of what we offer because it is painful to take things ways. Once we come through this recession, companies will be more hesitant to give as much as quickly,” she adds.
Among the belt-tightening lessons Morton's has learned: Don't be too hasty to hire someone who has to relocate. “We have not eliminated relocation expenses, but do we really need to hire someone in California who needs to move to Boston? Recruitment is much quieter now.”
Maybe too quiet, argues recruiter Amanda Hite, founder and CEO of Talent Revolution. She recently posted a video on YouTube in which she claims she receives “hundreds of e-mails” from job seekers saying chains are blowing them off after one interview. Bad idea.
Hite maintains these people are now likely to “opt out of our industry” at a time when restaurants should be creating relationships. She suggests chains should stay in touch by inviting promising applicants and their families to their restaurants. “Let them know you're not hiring, but 'We still want to get to know you,'” she offers.
Social-Media RecruitsHite also suggests chains with hiring freezes remain in touch by taking a page from giant accounting firm Ernst & Young—a Facebook page. “They've got 30,000 fans on their page,” she marvels. “They are engaging conversation and giving [fans] job resources and tips. They are a great example.”
“Ernst & Young Careers” serves as a good model for how to connect to potential employees without having to interview them. Career counselors, respond to all job-related posts, like one from Rafique, in Edmonton, Canada, who wondered if a recruiter was nearby. The counselor's response: “Hi Rafique, I look after Edmonton recruiting and am located in the Calgary office. Please feel free to Facebook me and let me know how I can help. I can let you know the key dates of events later this summer.”
Zappos.com's Facebook fan page has merely 789 fans. Ratner explains this is because the page is under marketing's control, though she's hopeful human resources can help grow the number. Social media, particularly Twitter, nonetheless plays a significant role in recruiting.
People who tweet are more likely than not a good fit into Zappos.com's corporate culture, she says. How does the company know this? “We measure and keep track of the results,” Ratner says. Much of the information about a person's social media habits is revealed in a one-on-one interview lasting an hour-and-a-half. Every job candidate must submit to it. “There are specific questions we ask,” she says.
Ratner is quick to point out that the 10-year-old company also recruits via the usual online job-posting boards. Employee participation on MySpace, Twitter, Facebook and LinkedIn, on the other hand, helps show that its work force is well-connected (400 on Twitter alone), a plus for a company that hires young, tech-savvy workers.
Working out the bugs
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| Morton’s relocates managers on occasion and pays for GM drycleaning. |
Shehan isn't alone. Ruby Tuesday has yet to embrace social connectivity when it comes to employee recruiting. “We are trying to dabble in that area,” Kitts says. “We have done stuff with Craigslist for hourlies. We have used some Internet, like Monster.com. I can see us moving in that direction. We are trying to get all the bugs worked out of it internally first.”
In the meantime, Kitts adds, the chain will recruit in a time-honored fashion. “We really encourage our district and area managers to get to the individuals in their areas and learn who is doing a good job,” she explains.
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