You don't need me to tell you that a high turnover rate spells big trouble. It wrecks havoc on your operation. Service, quality, and customer satisfaction all take a hit. Plus it's time consuming headache that sucks big bucks out of your pocket as you constantly recruit, interview and train new employees.

Besides, without enough competent people to take care of your customers, the best laid marketing plans will fail.

But turnover is NOT inevitable as this edited excerpt featuring Mike Friedman shows. Mike's a former college basketball coach and owner of Captain Tony's Pizza shops. His five stores enjoy a tiny annual turnover rate.

How's he do it? Let's find out.

What role do your employees play in the marketing?

They play an active role in the marketing. We're the small guy so we kind of take almost a "Us vs. Them" attitude in the marketplace. So they have to be on our team. Not only as a diligent employee showing up on time and having an enthusiastic, positive attitude…but they have to have a "Sell…Sell…Sell" attitude. Believing that we have America's finest gourmet pizza.

Even with the labor shortage, you're still able to come up with people that buy into that?

Yes, but it's not an easy process. We have to absolutely sell, train and motivate them. And continue to prod and kind of tweak them to keep with the program.

With turnover being such a chronic problem what kind of turnover rate do you have?

For the last 9 years, we have averaged 4 to 10% turnover. Of course that's mind-boggling in an industry where the standard is more than 100%

How do you account for that?

Instead of spending a lot of money on advertising and marketing, I spend it on retraining, redevelopment and the word of mouth approach. Because the only way you get advertising, which everybody knows is the best, is by having your employees perform and give your customers an experience they didn't expect.

What's your most effective recruiting technique?

First of all we don't advertise. We have always felt that it is not a very good way to recruit people. When you have successful, happy employees, you ask them to get people. You can sometimes even create incentives. But even without the financial compensation, people like to work in a nice, fun, employee-friendly environment. We really think we've created that. So we not only get word of mouth for how great our pizza is, but how much fun it is to work here. Basically we recruit mainly through our own employees then.

So you really don't have problems finding employees?

I would say for the most part, we're a lot better off than our competitors. We never ever, in 9 years and 5 restaurants have put a sign in the window saying "Help Wanted". I think that has a negative connotation. Not to criticize our competitors for doing it. But for us it's not a positive image.

Switching gears in your opinion what do you feel is the key to being a good interviewer?

Well, I think the key to being a good interviewer is you have to have the ability to listen. You see a lot of people talking. Yet if you're doing most of the talking and telling them how good everything is, you really have no idea if they're going to be a good candidate or not.

Isn't that the truth? That said, what kind of questions do you ask during an interview?

When I interview people I'm looking for someone who is enthusiastic and has a passion for life. Especially when they're not working. So one of the first, and probably most significant questions I ask is what they like to do when they aren't working. Because if they're not interested or excited or motivated about their out of work experiences, they're not going to be very helpful for me in their in-work experiences. When a person comes in and says, "Oh yeah, I love fishing". Or "Music is my thing". Or "I read 4 books a day" I get excited. Because I at least know that there's some passion in this person. Now if I can have them generate that passion the 30, 40,  50 hours a week they work for me, then I've got a good one.

I also want to make sure that they know the time constraints and that the restaurant business is very grueling. They're going to be called in when they're not scheduled. We make all that very clear to them and question their motivation right away.

I try to find out about family life. Since the biggest conflict is work life verses family life, I want to know what family responsibilities they have. When I know there's loyalty to their family, I know there's probably going to be loyalty to us too.

Obviously you have to ask a few questions about skill level. But talk is cheap. People can say they are very skillful but for me skill level is really reduced to getting kind of a gut instinct.

If they have just left a job, I always like to know why. I'm very leery if they are critical of their last job.

Employee empowerment is a common buzz word today. How do you use that in your stores?

You need front line employees to have an employee ownership mentality. Meaning they have to take a little bit of ownership in the restaurant. It's a mental attitude that they own part of this restaurant. Once they have that employee ownership mentality, 99% of your problems are gone.

Because when they share in the responsibility of ownership then they are going to take pride and do the things that you need them to do to satisfy customers.

To develop the employee ownership mentality, you really have to learn to respect the employee. Respect their wishers. Listen to them and give them a little bit of forum. I make a conscious effort to make sure I do that, and that alone starts this employee ownership mentality.

For example, I have 21 gourmet pizzas on my menu. Even though this is a franchise outfit, 13 of those 21 were created by employees. I let them have a lot of leeway. I generally like my own marketing ideas best. But everything else, in terms of food, in terms of decor, I generally let my employees run the show.

Do you have specific tips for dealing with the younger so called GenerationX employees?

I do. I think you have to understand that they're in a totally different culture. One that might be hard for you relate to. You have to understand that the things that get excited are not the things that get you excited. You also have to understand some basic or common things you think all people adhere to – they do not.

Once you get that, you then have to figure out a few things they do like and get excited about. One thing is family. Because a lot of them come from dysfunctional families or divorced families, I think they long for family and for belonging. And you need to understand that.

You have to constantly teach them that if they want to keep their job they have to satisfy, at least in some ways, non-Gen X people. So they might have to change a little bit. Change some of their appearance and actions during work time. That's hard to do sometimes.

Anything else you do to cut turnover or improve retention?

I would say some of the unique programs we have puts us a little ahead of other companies. For example, we have emergency loans for employees for when they need bus money or to get their mother out of the hospital or to get a cavity drilled. And we let people know right away that we do those kind of things.

When you let people know you care about them, you're not going to treat them like just a number, it makes a big difference.

Makes sense. Thanks Mike

John Gergye is a consultant and publisher of the Food Service Emergency Survival Kit which is full of ideas to help restaurants, bars and pizza shops succeed. If you'd like a FREE 60 minute cassette that reveals more than 20 success secrets for getting more customers, or boosting profits or finding more or better employees, it's available free as a special offer to readers of PMQ. Call John at 614-436-6822 and be sure to mention the PMQ Tape Offer.