Paying More for Insurance Cuts Turnover, Boosts Sales and Productivity

By SARAH E. NEEDLEMAN

Four years ago, executives of Burgerville, a regional restaurant chain, agreed to pay at least 90% of health-care premiums for hourly employees who work at least 20 hours a week. Today, the executives say the unusual move has saved money by cutting turnover, boosting sales and improving productivity.

Burgerville's experience is notable for the food-service industry, where turnover is high and fewer than half of chains offer health insurance for part-time hourly employees, according to People Report, a research firm. The chains that do offer benefits pay on average 49% of the cost for employees working at least 30 hours a week, People Report says.

Burgerville's initiative "not only improves quality of service but it saves money by not having to replace staff as frequently," said Darren Tristano, executive vice president at Technomic Inc., a Chicago consulting and research firm for the food industry.

Burgerville, a 39-restaurant chain based in Vancouver, Wash., and owned by closely held Holland Inc., has long followed a distinctive path. It offers hormone-free meat, uses wind energy to power its stores and prints nutritional information on its receipts.

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