Tackling Turnover

Creative benefits and screening techniques can keep hourly workers on the job.

Wednesday, December 1, 2010
Write To The Editor Reprints

Dusting. Vacuuming. Washing floors. Cleaning toilets. The responsibilities of a maid are rarely appealing, even with the promise of a steady paycheck during a recession.

Yet, My Maid Service, which employs 45 such workers, didn't experience any turnover in 2009. So far this year, only one person has resigned. That's a pretty good track record for an industry that claims a 300-percent annual turnover rate, says Derek Christian, who acquired the Lebanon, Ohio-based company three years ago and sits on the board of directors for the Columbus, Ohio-based Association of Residential Cleaning Services International.

"I'm not naïve enough to think that everyone is going to want to clean houses for the rest of their lives," he says, adding that he addresses employees' short-term and long-term goals during monthly performance reviews. "As long as they spend two good years with me and do a good job, I've got no problem helping them find [other] jobs."

In good and bad economies, engaging hourly employees or those in unskilled, low-wage positions is often a battle for companies that employ them. Many of these jobs are monotonous, unchallenging, physically demanding and sometimes even dirty. Still, these positions were created for a reason. Companies can't survive without them.

However, hourly workers frequently quit in search of more money or better opportunities, leaving employers in the lurch. Tired of constantly refilling these positions, HR professionals are developing effective screening techniques and retention strategies to keep such workers on their payrolls instead of scouring the want ads.

Several years ago, Christian learned a few techniques while selling cleaning products for Cincinnati-based Procter & Gamble.

"A lot of what I'm doing is not that different from what P&G taught me," he says, explaining that managers at P&G asked employees what jobs they wanted next at the company, then provided them with related skills training and work assignments that would help them reach those goals.

Most of Christian's employees, however, prefer to leave his company to pursue other jobs.

"For a lot of people, their ideal job is an office job," he says. "We help them build computer skills by sending them to training classes either through the community college or online; then, we have them help out in the office and apply for jobs."

For example, he's teaching one employee who wants to launch a pet-sitting business how to create a business plan and operate a small business -- everything from managing employees to simple bookkeeping. He also pays for employees to complete any of ARCSI's 400 online business-training classes, helps others develop their resumes and offers flexible hours to all workers, which is especially appreciated by the handful of employees who are college students.

Paying above industry wage certainly helps, too, he says, adding that his maids earn $12 an hour compared to the average $9 hourly rate. Most of his employees are in their mid-40s and are either high-school graduates or dropouts. Not only are they "very loyal," Christian says, but when they leave, they refer their friends so there are usually three people to replace them.

"It wouldn't be that hard for big companies to adopt a similar program," says Christian. "I get really good people, people who can potentially do better things because they know I'm going to help them get somewhere else."

Hiring for Retention

But not every employee is ambitious or wants the responsibilities associated with a management job. Many of the employees at Mike's Car Wash Inc. fit that description.

The Indianapolis-based company has 650 employees -- roughly 450 work part-time -- in 37 locations throughout central Indiana and in Dayton and Cincinnati, Ohio. While the industry's average turnover rate falls between 75 percent and 80 percent, Mike's turnover hovers around 55 percent, says Joe Rice, the company's HR director.

He credits the difference to a new hiring process.

"We got much better at hiring the right person from the start," says Rice, explaining that, now, only 1 percent of applicants are hired. "If we hire the right person, we know we'll get much longer tenure out of them and better performance."

About five years ago, Mike's HR department spent six months analyzing three years of employee data. It compared the applications of employees who quit with those who didn't, reviewed assessment scores from hiring managers and notes from exit interviewers. Twelve red flags, says Rice, were identified.

One includes job-hopping. HR implemented a rule that no applicant can be hired if the individual has left more than two jobs in the past 12 months, unless there's a reasonable explanation, such as the person was laid off. Likewise, since the car-washing business is customer-service intensive, candidates are not hired if their job history shows that they chose jobs that don't involve interaction with customers, such as stocking shelves.

Then the HR department, under Rice's leadership, developed a program called Hire the Best. It retrained all hiring managers and developed an interview script to help them identify red flags or other past behaviors that predict how well an applicant would perform on the job.

During the interview, applicants also watch an eight-minute video (which can be viewed on the company's website). "Everything that would steer you away from the job is in the video," he says. "[Most] of it talks about the work environment, being on your feet all day and working in the heat and cold. About the last third says, 'If you can live with this, here's what's in it for you.' "

The company hires mostly millennials -- people born between 1980 and 1995 -- at minimum wage. Millennials, says Rice, prefer structure and like to be kept in the loop. They also like to receive feedback and know what's expected of them, he adds.

With that in mind, every Mike's employee receives two performance appraisals each year and many participate in focus groups that address company policies and issues. Every month, employees also compete with their peers at other locations for best-in-customer-service awards.

The winning team earns the highest mystery shopper score and revenue through suggestive-selling or persuading customers to buy more add-ons, such as a clear-coat protective finish. In exchange, employees in that location are paid $1 more per hour for one month.

Today, the average length of stay for a Mike's employee is two years, with nearly half of the turnover planned -- i.e., teenagers going off to college.

"Where we get the most measurable results is in hiring and selection -- making sure they're a good fit for us and truly a good fit for them, personally," Rice says, adding that millennials also expect a supportive workplace. "If you don't have that great work environment, it doesn't matter how good you are at the hiring process; you're still not going to keep them."

In addition to watching out for red flags, HR needs to develop a list of competencies for each position, then translate them into specific behaviors, says Ilene Siscovick, a partner at Mercer in Seattle who leads the HR consulting firm's human capital business in the Northwest.

Consider one competency: customer-service skills. What does that mean? Break it down. Tell employees they must greet customers and say key phrases such as, "Thank you for coming," or "Have a nice day." Employees need to know what's expected of them; otherwise, they may become frustrated -- even angry -- and walk out.

Worse still, they may drag others with them. Some employees may ask why the person quit and start wondering whether they still want to work for the company. "There could be some herd mentality," says Siscovick. "And if people aren't satisfied with their job, that translates right away to [lower] customer satisfaction."

More than Money

According to the 2010 Restaurant Industry Operations report, prepared by the Washington-based National Restaurant Association, turnover among hourly staff at limited-service or fast-food restaurants averages 71 percent.

As the owner of Patrice and Associates, a 23-year-old recruiting firm in Annapolis, Md., serving close to 100 restaurant chains, including TGI Friday's, Ruby Tuesday, Arby's and Applebee's, Patrice Rice was interested in learning how some companies were shrinking those numbers. So she asked restaurant managers visiting her company's Facebook page what they were doing to reduce employee turnover.

The top response? Show respect to team members.

Newsletter Sign-Up:

HR Technology
Talent Management
HR Leadership
Inside HR Tech
Special Offers

Email Address

Privacy Policy

Since the restaurant industry frequently hires first-time jobholders, she says, one of the most effective ways to demonstrate respect is to cross-train employees, everyone from dishwashers to servers. She believes the confidence and competence gained through cross-training not only makes them feel good about themselves and the jobs they're doing, but also demonstrates that management trusts them and believes they are capable workers.

Some managers even pitch-in and help.

"In this industry, you cannot be a clipboard manager," says Rice, adding that, when short-handed, managers need to roll up their sleeves and work alongside employees who perform a variety of jobs -- whether it's bussing tables or cleaning bathrooms. In addition to feeling a sense of teamwork, employees realize that their work is respected and valued, which also boosts morale.

Cici's Pizza offers a voluntary cross-training program called Stars, says John Deaton, vice president of operations at Patrice and Associates. Deaton, who left Cici's last spring, served as its director of operations, overseeing its corporate stores in Orlando and more than 350 franchises in the eastern United States.

Stars certifies employees in various positions, says Deaton. With each certification comes a small pay raise. Employees certified to perform more than one job are usually in demand and rewarded with more work hours. "People were fighting for hours," he says.

Cici's corporate training department also developed an onboarding program requiring restaurant managers to spend several hours with new hires at their stores, reviewing the training syllabus, providing a restaurant tour, answering questions and discussing expectations.

"We wanted [employees] to feel very good right up front, that they're very important and we're taking the time to train them correctly," Deaton says, adding that it's critical to create a positive first impression.

Hourly workers also attend staff meetings, usually held on Saturday mornings. They learn about operating costs and how their actions impact the restaurant's profitability. Deaton says the interactive meetings provide employees with opportunities to talk about their team's efforts to raise profits or lower costs.

What's more, one team member is placed on call every day. When an employee doesn't show up for a scheduled shift, the team member works that shift, receiving 50 cents more per hour. Deaton says the program acts as an incentive, rewarding some of the company's better employees.

When added up, he says, all of these changes helped reduce turnover by more than 20 percent.

"You want [hourly workers] to get involved, feel empowered and have independence, too," Deaton says, adding that employees need to be aware of company goals. "Challenge them. Say, 'This is our goal, this is where we're at now and this is where we need to be.' That gets them excited, helps them understand they're part of a team. That is more important than money."

Well-Done Benefits

Although most hourly workers don't earn a high annual wage, many remain on the job because of company perks that appear to be just as valued as pay raises.

Take McDonald's USA, which employs 700,000 hourly workers in the United States. The fast-food giant uses a wide variety of benefits to attract and retain the best talent, says Danitra Barnett, vice president of HR at McDonald's in Oak Brook, Ill.

Hourly managers, says Barnett, are eligible for eight-week paid sabbaticals every 10 years. What's more, she adds, roughly half of all employees use their McGold card, which offers up to 15 percent discounts on merchandise or services from participating vendors.

Workers can also participate in the English Under the Arches program, a language course that combines online training with live facilitators. About 25 percent also take advantage of the McResource Line, which offers employee assistance such as financial counseling.

Then there's Hamburger University, where employees can earn college credits for completing management courses. In 2008, the company also launched Station M, a blog that attracts more than 50,000 hourly McDonald's employees who share work-related issues and best practices.

While the blog site serves as a magnet for workers, it also reduces turnover, Barnett says. The attrition rate at McDonald's, she says, is the lowest it's been in more than 20 years. It recently dropped more than 30 points below the industry's average, which typically exceeds 120 percent.

"It's worked extremely well for us at a time when other companies are reducing their benefits," Barnett says, adding that the corporate focus is less on turnover and more on retaining quality employees. "It's giving people in those roles more job satisfaction and development or growth opportunities."

Copyright 2017© LRP Publications