Human resources directors have become increasingly vital to restaurant companies, taking on more responsibility and playing a larger role in their organizations. New technologies, science, a hypercompetitive environment and prickly economic challenges all have contributed to bringing people issues front and center.
Looking forward, several human resources experts are predicting that the job market is going to tighten up sooner rather than later, contrary to popular belief.
“A lot of people are being naïve to think that the labor market is going to be frothy. I think they are gravely mistaken,” says Nate DaPore, president and chief executive of People Matter, a talent management platform and the endorsed partner of the National Restaurant Association.
president and chief executive of People Matter
“The operators that don’t innovate are going to have a very hard time attracting and retaining talent. On the flip side, if you can’t maintain good talent, your costs are going to be very high. We are heading to a very expensive labor market.
“My prediction is that it is going to be really, really challenging by the end of 2012.”
There is also data to back up DaPore’s claim. The People Report Workforce Index, which surveys recruitment difficulty, staffing levels and other employment pressures, has been steadily increasing for the past two years, and is already approaching 2008 levels.
chief executive and founder of the People Report
Joni Doolin, who is chief executive and founder of the People Report, says there are more worries behind the numbers.
“My biggest concern about the labor market for restaurants is the growing skills gap. It is still masked somewhat by the high unemployment numbers. However, many of the unemployed do not currently possess the life skills that the hospitality industry wants and needs.
“They will need to be trained in things as simple as face-to-face communication with guests. We can no longer expect that employees receive this type of training or role modeling at home. Although we think of younger workers as tech savvy, this may really only be how to text or use their Facebook account—it may not be how to juggle using a headset, a handheld device, all while taking orders, counting cash, or answering questions.”
Doolin says the current hypercompetitive environment makes the role of HR specialists more important than ever before. “The HR toolbox has expanded dramatically beyond recruitment, training and compliance, and the best players have seized on this time to shine and to step up as key members of their management teams.”
To that end, Restaurant Management has talked with some of the brightest in restaurant human resources directors, consultants, and analysts to bring you the best practices that savvy companies are embracing as they navigate the challenging business landscape.
senior vice president of human resources and training for Perkins and Marie Callender’s Inc.
Toni Quist, who is senior vice president of human resources and training for Perkins and Marie Callender’s Inc., a company with 600 restaurants that breaks down to about two-thirds franchised units and one-third corporate stores, says the efforts to bring out the best in employees should be a daily ritual.
“It is imperative to look at the guiding principles of the company and bring them to life each and every day. You have to honor your heroes if you really want to build a company that says people first.
“Human resources has come out of the back-corner office that no one used to be able to find and has become more front of mind in daily practices and education.”
Selecting the right employees and putting them in the right jobs has become more scientific than it used to be and leaves less to chance, several experts say.
founder of Kolbe Corp.
One such expert, Kathy Kolbe, has researched and assessed individuals for 30 years and is considered to be one of the world’s leading authorities on human instincts and conation, meaning any natural tendency, impulse, striving, or directed effort.
To maximize potential and financial success, Kolbe says, companies need to build on the strengths of employees, assign them to roles where they can shine and put them on teams that have diversity in methods of problem solving.
“Most people hire their clones,” says Kolbe, who is the founder of Kolbe Corp. and the Center for Conative Abilities.
Kolbe says there are three types of companies right now, “The ones that were poorly managed or poorly positioned that are gone or near gone, the ones that are thriving because they are excelling in every category and the ones that are in the middle and could go either way.
“And those are the companies we are trying to help,” she says.
Kolbe says that human resources is now more a science than an art. “We can go in and tell a company within 80 percent probability if they are going to be successful, and we can tell them how to improve the probability.” She says the conative part of the brain gives you a picture of how a person naturally succeeds and also if he or she would be a good fit within certain companies.
Changes and innovations in technology have also altered the way restaurant companies operate their human resources departments.
“Traditionally, human resources has been a very paper-driven department, but that’s definitely not the case anymore,” says Steven Wallace, executive vice president and chief people officer at Real Mex Restaurants Inc.
“And that makes good business sense because the better job that companies can do to automate the paper side of things allows more time to be spent on the people side of the business, where it can really make a difference to the bottom line.”
Wallace, who heads the team that oversees about 160 units including Chevys, Acapulco, and El Torito restaurants, says his company has been in a highly leveraged situation and unable to purchase the latest technologies until now. Real Mex Restaurants filed Chapter 11 reorganization in late 2011.
“As we exit our financial restructuring, we will be able to automate some of these paper-based systems like the onboarding process (hiring),” he says. Other changes currently under way include a new accounting system and back-office system that includes a labor-scheduling module. “This helps provide ideal food costs, and also scheduling the staff. We believe this will result in reduced food costs and create more accountability.”
Wallace says there are a lot of vendors for technology tools and a variety of solutions, leaving companies the job of piecing together an integrated solution from a plethora of options. “You have to have a good relationship with the IT department and strong industry contacts to bounce ideas off of.”
Over the last decade human resources departments have greatly changed the way they go about their business.
president of People & Performance Strategies
“The big change is driving business results instead of being focused on compliance and filling positions,” says Joleen Goronkin, president of People & Performance Strategies, an HR consultancy. “HR has a seat at the table now, but they have to be able to add value to the organization, not just fill a chair. HR is being held accountable for results in areas they have not before.”
Goronkin says there is a direct link between the bottom line and turnover, training costs, compensation strategies, benefits management, recruitment, sales and cost-reduction training. “These can be measured just as any other P&L line item. There are indirect links to the bottom line as well when you consider employee engagement, employee relations, guest satisfaction, leadership development and compliance training.”
Quist says these tools are more important in this challenging economy.
“Everything seems to matter more, and everything is so much more personal. We know there is more pressure on more people,” she says. “It is just understanding that and communicating that to employees that makes all the difference. It is going to get really challenging in the next few years, and if our industry doesn’t get our arms around retention and retaining, we won’t be where we need to be.”
Berkeley Burke International
James Berkeley at Berkeley Burke International, an international consultant for full-service restaurants, says outstanding communication isn’t that difficult to accomplish but it does demand focus and discipline.
“Smart employers start by considering the communication potential to positively impact employees’ behavior and attitudes at the outset, and then design the right tax-efficient reward program for the international franchise consultant or F&B executive. That requires at a minimum, those in line management to be highly competent at reading, writing, speaking and listening. The role of HR is to support those line managers directly responsible for their international assignees, help develop the right communication skills and bring to their attention, tools that will dramatically improve their success. It is not, and I repeat, it is not their role to replace those individuals as the lead communicator. In most cases, they lack the credibility, knowledge or relationship to take on that role.
“Why spend a dime on pay and benefits programs, if the communication is so poor that the individual cannot easily understand the purpose, the proper use and the value of their incentive pay or benefit program on assignment? You would be shocked at how ineffectual many emerging and leading brands both within and outside the sector are today.”
“Many employers when expanding internationally view communication as an after-the-fact alternative for implementing an assignees pay and benefits program,” he says.
When it comes to hiring, consultants and HR experts agree, getting it right the first time is a huge time and money saver. “Hiring the absolute best candidate in every situation is crucial,” Quist says. “If we can hire and select the right person, they almost train themselves.”
Once you have the right people in the right jobs, it still makes good business sense to keep employees engaged. “Your No. 1 goal should be to make the jobs of your employees and managers as easy as possible to do well,” Doolin says.
“Community is key. Find as many ways as you can to let your employees opt in to something more than a paycheck, or more than themselves.
“The 12 companies who were our Best Practices finalists in 2011 all had initiatives focused on community involvement, green practices and sustainability, and employee funds. They find ways to create purpose in the workplace.”
Berkeley says it pays to remember community and communication skills when growing overseas. “Communication skills are critical to the success and competitive advantage of brands looking to expand in the Middle East, Eastern Europe and Asia. Many employers when expanding internationally fail to connect properly with the career and lifestyle needs of their overseas-based employees. They simply focus on the compliance issues (local regulations, customary norms etc.), not the commitment issues.
“A default or unintended attitude arises, where the international assignee perceives the employer is only interested in protecting their interest, getting away with the bare minimum, and achieving their corporate financial goals. There is no emotional investment in the assignee’s success or welfare. In such cases, we see 50% - 70% of assignees stating that their reward is uncompetitive,” he says.
People & Performance Strategies’ Goronkin says at the end of the day it does come down to employees and how they feel. “It is all about your people. Make sure that you are not incenting leaders to manage the business down. The bottom line: Are your employees, managers and executives happy and feeling that they are contributing in a meaningful way?”