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THE KEEPERS: KEEPING A BANDAGE ON EMPLOYEE TURNOVER
By Jim Dees
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Click Here for The HiringPredictor™ for Pizza Operators
Alan Murph of San Antonio, Texas, has sprinted to success in the pizza business by moving with a marathoner’s mindset. Alan has been a franchisee for Domino’s since 1983 and now has 29 stores in the San Antonio area. (If 29 sounds excessive, Alan points out that, “San Antonio is the eighth largest city in the country.”) His sprint kicked into overdrive in 2001 when he acquired the San Antonio market and went from owning eight stores to –Bang!– suddenly having 24, (he has since added five.)
“I started as single store operator, a one-store franchisee, for five years before we grew to eight stores,” he recalls. “The hardest part about it was going from the one store to having two. I had to train managers, I had to learn how to train managers, I didn’t know anything about it.”
Alan currently has 575 employees throughout his 29 stores. “I’m trying to take care of my people,” he declares. “We do a lot of things to help them do well in their jobs. We have training programs and our trainer got Trainer of the Year last year. Our organization got the Gold Franny that Domino’s gives out for Operational Excellence. We do coaching for our senior guys, and we send different supervisors, HR people or managers to different outside classes for leadership training. John Maxwell, an employee development expert, is very popular with us. We also use Skill Path, a series of career-building seminars, from time to time. We invest in our team with the idea of getting better each year.”
Retention Attention
Alan has heard the sad song many in the industry know so well, employee turnover, though early on he wasn’t well versed about the problem. “I thought turnover was something you got going to McDonald’s drive through,” he chuckles.
After 20 years and nearly 30 stores, Alan is convinced of the importance of retaining good employees.
“From the supervisor to the driver, the general manager, the CSR (customer service rep) manager, the bottom line is, the longer they stay, the better job they do,” Alan enthuses. “People just learn more, the drivers learn the roads better, the staff knows the system better.”
Alan is right. There is no question employee turnover is a significant issue in the business world but the pizza industry is particularly vulnerable, hiring a whopping 2,000,000 new employees each year. The problem is so acute that more than 75% of those new hires are either fired or leave voluntarily during their first year. That high turnover rate costs the pizza industry thousands of dollars per store annually.
The reasons for such disturbing numbers vary. Part of the reason may be the average pizza worker is usually a young, hourly employee who often doesn’t stay past six months. Alan has managed to tackle the turnover problem and lower the numbers throughout his stores. He says he used a program called HiringPredictor™ by eBestHire.com (formerly PeopleSkillsInc.com), an on-line pre-employment testing service out of Sonora, California that identifies top-performing employees.
“Four years ago we were at 260% turnover,” he recalls ruefully. “This year, at the rate we’re hiring and firing, we’ll be at 100%. I don’t know any of my peers in the pizza industry who are running 100% turnover.”
Alan says 100% turnover is more manageable. “Basically you turn over everybody one time,” he points out. “At 100%, if we have 575 team members, over a period of one year, we will hire and fire/replace 575 people.” Has Alan noticed any savings to his bottom line?
“It’s hard to put a number on it, because it includes different positions, but I think we’ve realized annual savings in the $150,000 range,” he says.
To attack the turnover problem, Alan had eBestHire.com build a job screening template for each of the positions in a Domino’s Pizza store. “To build the templates, eBestHire.com had my top, average, and low performing employees take an on-line questionnaire”, Alan explains. The on-line HiringPredictor then identified the traits common to the top performers and problem traits of the low performers. These traits were then built into job screening templates that select high-performers and screen-out low performers.
Employee Screening/Profiling
“We’ve used the new templates to screen applicants for every position we’ve hired,” he declares. “It’s all a compatibility survey. We added criminal background checks and a drug screen. We pay for it, but we want to know what we’re getting; who we’re going to be working with. We don’t want someone who is going to rip us off. The HiringPredictor survey helps us determine what people fit our business best,” Alan says.
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| Above is a sample of the questionnaire’s Lie Detector in action. This is what the job applicant sees when an applicant hasn’t been truthful. Get a 10% discount on the hiring predictor for pizza operators at PMQ.com/hiring-test |
“We surveyed our current employees,” he says, “and figured out what attitudes contributed to a successful employee.”
Here’s how the hiring process works: Employment candidates complete a 20-minute online questionnaire either from the hiring office or their home computer. A hiring manager goes on-line and instantly runs a report that displays a color-coded thermometer of green, yellow, or red that determines if the candidate continues to the interview process.
Alan says an entry-level employee (what he calls a customer service rep or CSR) takes about a month to train into proficiency at taking orders and stacking and labeling inventory. He estimates the cost of training a new employee at $3,000.
Alan says another thing that has aided in his hiring process and employee pool is the use of background checks.
“When we started doing criminal background checks in 2004, you would not believe the people we kept out of the company,” he says, shaking his head. “We check for assault, drugs and sex offenders. I’ve got 16-year-old kids answering the phone and with younger employees, you need to make sure you don’t have any sex offenders on the payroll. We’re battling for employees to keep our staffing levels up, but I can’t expose my kids to criminal behavior.”
Alan points out that today’s work force is a little savvier in interview techniques. He believes further testing is required to double-check a prospect who might simply be a “good talker.”
“Some people have become masters of the art of the interview,” Alan points out. “The HiringPredictor’s templates are helpful because they are geared to test for consistency, to see what is “underneath,” so to speak. The Paradox Methodology is used to go underneath. It determines an applicant’s problem behaviors without ever asking the applicant about those behaviors on the questionnaire. The technological Lie Detector is used to test for consistency and is built into the questionnaire. The Lie Detector prevents job applicants from providing false answers.”
Marketing Strategies
Like most operators, Alan wants to develop strong employees, but he also wants to market his business by developing strong ties to his community in San Antonio. To this end, Alan has developed a promotion directed at the local school system. He gives away 300,000 pizzas annually to schools through merit certificates that are good for a free pizza. The teachers reward students with these certificates for perfect attendance, grades, athletics or other achievements. Some of the pizzas are awarded to students simply for their birthday.
“I want every student in San Antonio to have a free pizza on their birthday,” he declares. Alan says the students and teachers love the promotion and it accomplishes another important goal, it adds names to his customer database. Alan says some of his stores also offer tours – during slow hours – where students can watch pizzas being made, and even try their hand at it.
“They get to learn about us and learn a little about pizza,” Alan enthuses. “This is something we have been doing for about two or three years and I hope that maybe some of these kids will not only become lifelong customers, but maybe I’ll get a few future employees out of it too.”
Since San Antonio is a tourist destination, Alan has worked with local hotels to provide a key/card program which can include room keys with his logo or four-color menu cards placed in each room that advertise specials featuring the tag line, “Just in case you didn’t pack dinner.” He says they purchase the key cards from KeyAd and another company called IDS and provide them for free to the hotels along with the table tents with the cable channel listings.
He also provides apartment buildings with move-in packets that offer discounts and promotions. “I used to hand those out myself and I’ve been run out of many apartment buildings,” he recalls with a laugh. “Now we work with the apartment managers. Our current move-in packet typically will offer a certificate for a discounted four cheese pizza, menus and refrigerator magnets with our logo. We also do direct mailing. This is a weekly newsletter that goes out to our database with our menu and any specials we’re running. We also offer free sodas if a delivery is late.”
In keeping with the aforementioned “marathoner mindset,” Alan cautions against trying to implement too many ideas system-wide. “You don’t roll out a new concept or idea at 29 stores at once, especially if it’s something earth-shattering. I have made this mistake before. I suggest that with any new addition to systems, products or a marketing idea, you need to sample it first to see how your systems will handle it and how it effects operations. I try to test new ideas at six or seven locations before a system-wide launch. I won’t go into detail, but we’ve done some silly coupon stuff that overwhelmed us.”
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| “This year, at the rate we’re hiring and firing, we’ll be at 100%. I don’t know any of my peers in the pizza industry who are running 100% turnover.” |
Taking Control
Though he had honed his pizza skills, Alan says his management skills had to be acquired through study. “I read books and went to leadership seminars,” he said. “When we got up to six stores, I knew I had to have help so I hired a supervisor. Once we were running 24 stores, I hired a marketing director and he now has four people working under him. This is something I wished I had done a lot earlier than when I did. Now I have someone who can oversee the marketing programs I have, such as the move-in packets with apartments, scheduling store tours with schools, distributing the merit certificates to teachers, making sure the hotels have enough key cards and the cable guides are in the rooms and many of the other programs. My marketing director monitors, creates and executes these programs with his assistants. The assistants for the marketing director make seven or eight bucks an hour.”
Marketing and monitoring go hand in hand in an ever-competitive pizza marketplace. Strict adherence to the bottom line should cover all possible ways to save money while working to increase revenue. Employee turnover may be costing you more than you realize. An employee assessment program may be just the trick to stem the stream of “short-timers.” It worked for Alan Murph in Texas.
“The employees we hire now seem to stay longer, they’re better quality employees,” Alan concludes. “You must find employees who will be productive members of your team.”