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Are you following these steps to find high-quality workers?

A veteran restaurant industry leader on why restaurant strategy today focuses on finding and keeping creative workers over and above just about everything else.

May 24, 2017

Today's most successful businesses are shifting their main brand strategies to hiring topnotch, creative thinkers at all levels, instead of business's longtime top priority of attracting investment capital, according to  recent Harvard Business Review article, "Strategy in the age of superabundant capital." The authors wrote that business investment capital is inexpensive to secure but that employees, who take creative, innovative ownership of their jobs, are lacking.

The restaurant industry is no exception. Even those that manage to attract top-notch people, often lose them within the year, as proven in data recently provided by customer data company, TDn2K, which found that in the restaurant industry: 
•    Four of every five terminations were voluntary last year. 
•    40 percent of all hourly terminations happen in first three months of job. 

The need is greater than ever for today's restaurant brands to invest money, time and expertise into finding and keeping quality employees at all levels, according to the Harvard article, which said, "Organizations need to manage their workforces as carefully and rigorously as they manage their financial assets, unleashing and supporting the talent within their organization."

Today's savvy hiring strategy: Find innovators and set them free on their jobs

Restaurant veteran Bobby Shaw said he is all in for this approach. The consultant who spent his career in leadership brands at a variety of brands, including Chipotle and McDonald's, said that talent may be scarce but investing in what it takes to find, hire and retain topnotch creative employees is worth the investment.

Q: What's the starting point for brands that want to enact this type of strategy that emphasizes hiring and keeping the most creative employees for all levels of responsibilities?
Shaw: Ideally, a company would ensure that the investment in culture receives the same amount of capital as the innovation and growth strategies. Investing in the culture, ahead of even what the need might technically be to do so, is, in fact, an investment in the growth of the company. ... I think it is more important today than ever due to the fact that anyone can open a restaurant company but not everyone opens a restaurant company with the right culture in place. You might have the capital, but if you don't have the right culture you will not be a healthy company long-term, and eventually, any talent you've attracted will leave without the infrastructure of a great culture. 

Q: What's the pay-off for this type of investment in time, money and manpower?
Shaw: The advantages of investing in a strong people culture are many, including lower turnover, keeping high performers, and attracting more high performers. Another advantage is ... that culture permeates beyond the employees into the guests. 

As Simon Sinek says, 'People don't buy what you do, they buy why you do it. With that in mind if you can create a culture connection where your employees become true ambassadors and connect with your guests in an authentic and meaningful way, you create loyal guests which supports your business model.

Q: But it's already tremendously difficult to hire just "warm bodies" to fill needed positions, so how do you hire or even find employees who thrive in an environment that gives them freedom and even compels them to innovate and contribute?

Shaw: I believe it starts with ensuring that the top company leadership fosters the culture and environment to incubate that kind of ideation and innovation. When you have that, and everyone making the hiring decision is clear on what you're looking for, then that's the type of person you will recruit and hire. 

For those already working (at a brand or company), they will feel empowered to contribute ideas when they are recognized for doing so, and rewarded for positively impacting results. ... You can't train for it, but you can recognize and reward for it. But the employees have to see that behavior modeled and supported.

Q: What's currently in place now that stymies this process at most restaurant brands? 
Shaw: Many brands have leaders that are too insecure to allow this type of innovation to bubble up to the surface. And that's too bad because so many of the best ideas come directly from the field. This insecurity can come across as "expertise," so an employee who might have a company-changing idea never expresses it, as to not be shot down.

It has to start at the top, but it can't stop there. If it does, then it's only lip service and it isn't real. This message has to start at the top and then it has to be reinforced throughout the organization by modeling the behavior and recognizing it when the top leaders see it. But most importantly, the culture has to be tied back to actual results and then those successes need to be celebrated by everyone on the team.

Q: How and where should a brand start to assess and even measure results to determine the need for a shift to this sort of strategy? Then, how do you gauge success?
Shaw: It has to start with the CEO, or leader acknowledging the state of the business and where they are on the spectrum of a healthy culture. If they aren't where they need to be, taking the position of being honest about it and making sure that they take accountability for it will begin the process. I have seen it happen over and over again. I think Domino's and Patrick Doyle did this really well several years ago.

(Then,) you move what you measure. Things like internal promotion rates, employee engagement, turnover, and 360-survey results are all metrics that can be looked at to gauge how things are going and allow you to dig in where you need to. 

I would start with assessing the existing management team and multi-unit leadership. If either of those groups are not right, than nothing you do matters. You need the right leadership to create the right environment that supports a healthy culture and improved financial results.

If the culture is healthy, ideas should come up from throughout the company, regardless of where they fall on the organizational chart. The big question is, "Are all employees encouraged to share those ideas?"

Q: Do you have any examples to share of this process working or being squelched at a restaurant brand? 
Shaw: When I see this processnotworking, it typically starts down the road of casting the vision for creating a better culture — one that truly fosters innovation from its front-line employees — but pulls back because it's too much of an investment. That is the ultimate culture killer. Or they spend the dollars but don't make sure that the results tie back to the culture by having the right people in position at all times to keep it alive. Then there is little confidence that having the right culture is important.

There are some great companies out there who do this well —  K&N Management (Mighty Fine Burgers and Rudy's BBQ) and Which Wich come to mind. 

Q: On that matter of lack of investment: What kind of costs are involved in putting this approach in effect?
Shaw: It takes valuable resources to implement this type of culture that recognizes and rewards this type of employee innovation through culture-building. One of those resources is dollars. ...

(Then), it all depends on the size of your organization and to what level you build out the culture. But while there is a financial component to this in terms of creating incentive programs to recognize improved performance, there is a zero cost to treating people right, developing them, providing opportunities for them and investing in them with your time.

Q: What are the pay-offs for both workers and companies? 
Shaw: Lower turnover, higher loyalty, better financial results, and higher levels of employee engagement. (For employees, the pay-off is) opportunity. I believe that front-line employees want to believe in the mission of the company and want to be a part of something special, and if they can contribute to the mission and do it at a higher level that creates opportunities for themselves, it's a huge win for them. 

Oddly enough (for companies the pay-off is) the same: Opportunity. 

I believe that today more than ever, the restaurant industry has a chance to capture some of the best talent out there if they are willing to invest as much in the culture as they are (in) growth. And the business results mentioned earlier are a huge pay-off. 

We know it takes anywhere from hundreds to thousands of dollars to replace talent when they leave, so if we can retain top talent that's a win. And we also know that you attract talent that mirrors what you already have so it pays big time to have the right people to attract more of the right people.

Q: What are the costs of not doing this and how do you measure to determine how active your company is currently immersed in this model? 

Shaw:There's an old quote that goes like this: 

A CFO says to the CEO, "What if we invest in our people and they leave?" The CEO says to the CFO, "What if we don't invest in our people and they stay?" 

There is a huge cost to notdoing this. It may not show up immediately but it will show up and you will lose your competitive edge. 

A company needs someone independent of the organization to come in and assess the overall health of the business and determine where they are on the spectrum of building a healthy culture to improve results. That, along with looking at the business results alongside the people metrics, will tell the story that needs to be told. It's up to the company to decide whether or not to write a new chapter.

Wanna hear more? Watch Shaw's presentation on leadership development here. He recently spoke at the Restaurant Franchising and Innovation Summit.

Editor's Note: On Wednesday, please come back to this site for the second part of this report with the leadership at a top restaurant talent recruitment organization who will detail how to put this type of hiring priority into action.