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Train to retain

Large pizza companies are battling turnover with a variety of training programs and incentives delivered from the top down.

May 20, 2003

Turnover. It's the bane of the foodservice industry.

Estimates of hourly employee turnover range from 100 percent to 200 percent annually, leaving store managers on the training treadmill year round.

And speaking of store managers, owners watch at least one of them walk out the door every six months, according to Teresa Siriani, president of the People Report, Dallas-based human resources research firm.

"Turnover in (quick service) management is around 50 percent a year," said Siriani, whose company surveys its 75 foodservice company clients quarterly about their turnover rates. "While that's well below (hourly), it's still not good."

Clients of People Report are among a growing number of foodservice companies working to reverse the turnover tide first at the management level. By attracting and keeping good leaders, they believe, those leaders will attract and keep good hourly workers.

That plan appears to be succeeding at several pizza companies, such as Tulsa, Okla.-based Mazzio's Pizza. In the quick-service category of People Report's 2002 survey, Mazzio's shared the top spot with El Pollo Loco, posting a 36 percent management turnover rate for the year. John Kidwell, director of human resources management and training at the 191-store pizza company, said that figure is improving.

"For our first quarter this year, we're showing 5.6 percent turnover for general managers and 20.3 percent for our restaurant managers on an annualized basis," said Kidwell. "On average, our general managers (who oversee multiple stores) stay with us just shy of eight years, and our restaurant managers stay 28 months. And while we think that's good, we can still do better."

Perhaps even as well as Monical's Pizza. Turnover at the 50-store chain during the 12 month-period ended April 2003 was a goose egg -- zero percent -- at its 35 corporate units.

Such results, said Monical's president, Harry Bond, come from a corporate culture in which employees learn to view restaurant management as more than a stepping-stone job.

"The key is that we look at this as a career -- even a lifetime career," said Bond.

Better hiring, better retention

Getting hired at Bertucci's Brick Oven Pizzeria is no show-up and sign-up event. Management applicants traverse a seven-step qualification process that includes online and telephone screenings, followed by time spent shadowing a Bertucci's store manager -- all before the first serious interview with a district manager.

"From there the candidate goes to a second interview with a regional vice president, all before the last step, which is a background search," said Irene Cook, vice president of training and recruiting at the Northborough, Mass., company. "Candidates have actually said to us that they were proud to be selected because of how thorough our process is. It makes them think they're working with the best."

Mazzio's runs its management hopefuls through a similar recruiting mill before hiring them. It also uses the Internet to receive applications and then taps outside sources for deeper screening. Once candidates move through initial approvals, multiple interviews, aided by psychological profiling tools, ensue. Kidwell said the results from those tests are very helpful in pinpointing the right candidates.

"There truly is a correlation with those candidates who score strongly and those who have potential for success in our company," he said. "Approval after that doesn't begin and end with one person, either. Everybody in the process confirms whether a person is a high-potential candidate."

Despite having 35 times more stores than Mazzio's, Ann Arbor, Mich.-based Domino's Pizza's Star Search selection process is comparatively less complex, said Patti Wilmot, executive vice president, people first. Over the past two years, the company has trained its managers and supervisors to spot desired characteristics in its management candidates. The net affect of the program was a 25 percent drop in management turnover in the program's first year.

Still, as every operator pointed out, hiring the right people solves only part of the problem. Once they're in, not only must they be trained thoroughly -- and regularly thereafter -- companies must provide valuable incentives that encourage them to strive for high goals.

Monical's, which received an Employer of Choice award in 2002 from the National Restaurant Association's Educational Foundation (NRAEF), offers multiple educational and enrichment programs to its managers. Monical's pays the bill for managers who want to acquire the NRA's Food Management Professional (FMP) designation ($150), and the tab for those signing up for ManageMentor ($195), an e-learning course hosted online by Harvard Business School Publishing. The course helps managers improve in the areas of decision making, training, leadership and problem solving.

"We've used it with our management team for the last year, and it's gone very well. We have 16 in the program now and 23 graduated in March," said Bond. "They can log on from the POS system in our restaurants or from home on their own computers."

The ManageMentor program also includes "about two hours of structured class time each week," said Bond. "Then they go out to lunch for an hour after that to have an informal peer sharing session."

Cook said Bertucci's has developed its own ongoing management enrichment program called Bertucci's University. Its highest level is an MBA: Master in Bertucci's Abilities. The chain won an Employer of Choice award from NRAEF this year.

"None of this happened overnight; it was a five-year process developing these programs," said Cook. Today, Bertucci's management turnover on an annualized basis is 19 percent, down from a one-time high of 73 percent. "There's no question in our minds that these ongoing training programs have resulted in that drop."

Domino's Wilmot said her company also employs e-learning initiatives, but she said its lower-tech programs have the most impact. For example, in designing its Back to Basics training manual, Domino's assembled 25 of its best store managers to help the company distill its multiple training manuals into one.

Wilmot also insisted that regular, face-to-face meetings (every four to six weeks) between store managers is the linchpin in its ongoing training system.

"We believe nothing can take the place of meeting with people," said Wilmot, adding that Domino's training only recently was elevated from afterthought to line item on the company's balance sheet. "We went to from hoping it would happen to budgeting for it."

Share a little love, a little wealth

Every operator interviewed said managers had profit-sharing incentives tied into their employment agreements, and Cook said Bertucci's is planning to award managers stock options for extended service terms.

But as Kidwell and Bond said, merely dangling dollars in front of managers won't ensure their happiness or long-term employment.

"If you don't have some measurement, how else do you get any better at this? When they make changes and see the needle move, they understand that the human resources metric makes a difference in their overall business." Teresa Siriani President, People Report

Financial gain can drive managers to put profits before people, starting the turnover cycle all over again. Monetary rewards must come with positive reinforcement from supervisors, as well as less tangible perks.

"We want them to have a reasonable work week -- not working 80 hours all the time," Bond said. "Their schedules allow them to get family time and vacation time. ... These are the kinds of things they need to have to consider restaurant management as a 'real job,' a career."

Bertucci's Cook echoed Bond's remark about the sometimes negative perception of restaurant careers as a root of the turnover problem.

"The primary reason we lose managers is because they leave the industry, not because they go to another (restaurant) company," Cook said. "They make a personal choice to do something else. It's often the whole, 'I'm looking for a real job' thing."

Sounding a bit like a Hallmark card, Bond explained the value of intangibles this way: "Sometimes it's the little things that matter."

For example, Monical's managers who find certain words in e-mails from the president get dozens of cookies baked by the man himself. Employees at all levels receive items such as pins, shirts and blankets for tenure milestones. "It's doing fun things that build the core culture we're striving for."

Measuring success

During her four years as vice president of human resources at Wolfgang Puck, People Report's Siriani learned well the challenges of retaining restaurant employees. The experience taught her firsthand that people are the industry's key asset, but that it often views them as expendable.

However, by virtue of becoming a People Report client, she said, her clients demonstrate their desire to change that perception.

"(N)ow we're measuring the human resources metric as a business component, which is something the industry needed," she said. "It's a people P&L if you will."

People Report data allows clients to measure their HR performance internally and externally. That peer review, Siriani said, motivates corporations to improve.

"If you don't have some measurement, how else do you get any better at this?" said Siriani, whose pizza clients include Mazzio's, Monical's, Donatos Pizzeria, Domino's and Chuck E. Cheese's. "When they make changes and see the needle move, they understand that the human resources metric makes a difference in their overall business."

Of course, People Report's survey results come at a price. Pricing is based on multiple units and begins at $5,000 for operations with fewer than 50 units. Larger companies spend much more, Siriani said.

Independent operators do have opportunities to gain information through People Report survey participation. One program that costs as little as $125 per company uses surveys to measure HR programs and procedures for hourly employees. "We get terrific participation in that," Siriani said.

For companies that want to develop or reexamine their training and retention policies, Bertucci's Cook offered some advice. Start by asking management what they like about working at your place, and whether they like working with their peers. Find out what motivates them to meet the company's standards, and ask them to consider what would keep them working there for an extended period. Take the most reasonable suggestions and use them as a guide for refining your HR policies.

"Then get back to selecting the right people on the front end," Cook said, adding that such initiatives should apply to leadership personnel first. "Once you've got that, make sure your training is really strong and ongoing."