Great Things Are Starting at Yum
The restaurant company has been pouring energy into retention, recognition and
communication. The result is lower turnover, higher sales, increased earnings
per share and better customer service at the drive-thru.
By Rachael King
As the band roams the hallways at Yum,
employees grab noisemakers and fall in behind the tuba, saxophones, trumpets
and bass guitar. The crowd grows larger as employees abandon their work,
jumping up from their desks to see where the band goes.
The Random Acts of Recognition Band
plays songs you’d hear at a pep rally, except when the crowd would normally
yell, "Fight, fight, fight," employees shout, "We are here to
recognize you." By the time the band stops at the Customer Maniac of the
Month’s desk, there are as many as 50 to 100 employees gathered round. The band
then gives the chosen employee a card, award or gift certificate.
Yum--the parent company to fast-food
chains Taco Bell, KFC, Pizza Hut, A&W and Long John Silver’s--has spent a
lot of energy branding the company as a great place to work. Its motto, in
fact, is "Great things start here." But the company acknowledges that
an employment brand doesn’t mean anything if it doesn’t match the experience of
employees.
Along with investing in an employment
brand, Yum began investing heavily in employee training. The company now offers
quarterly training and is on its way to training 725,000 employees in Yum’s
Customer Mania program, which in part empowers frontline employees to resolve
customer disputes. The whole program is centered on listening to customers, and
it recognizes employees who go the extra mile in the name of customer service.
"The No. 1 or 2 reason why people leave companies is that they don’t feel
recognized," says Jenny Bean, employment marketing manager at Yum! Brands
Inc.
Another component of an employment brand
is how much employees actually trust the company for which they work, says Mike
Temkin, vice president of strategic planning and development at Shaker
Recruitment Advertising & Communications. He notes that Watson Wyatt
evaluates an employment brand by its share performance. Companies with high
employee trust levels outperform companies with low trust levels by 186
percent. Temkin says that an employment brand is more than posters or videos.
It’s about maintaining a strong line of communication within a company to
secure that trust.
Judging by Yum’s share performance, its
employment-branding efforts are working. When Yum reported its third-quarter
earnings on October 7, CEO David Novack said that he was increasing 2003
earnings-per-share guidance to $2.03 before special items and that looking
ahead to 2004, he was confident that Yum would continue to deliver its goal of
at least 10 percent growth in EPS.
Can’t fake it
Good employment brands
start from inside a corporation, says Christine Johnson, director of employee
communications services at Shaker. The way to do that is to figure out what
story a company’s employees have to tell. "You can’t make something
up," says Johnson. "If it doesn’t reflect the organization as it
exists, the company will have high turnover."
"Our employment branding isn’t just
to bring people in the door; it’s a message we use every time we touch our
employees," says Yum’s Bean. The message, "Great things start
here," appears on benefits materials, orientation materials and the
company’s Web site, on job-posting communications and job applications, and all
over store walls. The message that Yum is trying to convey is that the company
has been the start of great things for many people.
To create the branding campaign, Yum
went to its employees and listened to what they had to say about the company.
What they found was that the company brings upward mobility to many people.
Some employees start as team members and work their way up to managing
restaurants; others work their way through school using the tuition-reimbursement
program.
With employment branding, the devil is
often in the details. A percentage of job applicants will decide to work at a
particular fast-food restaurant because as customers they like the environment.
Bean didn’t want to then lose those people because the collateral material
didn’t reinforce that store quality. So she upped the quality and quantity of
point-of-purchase materials such as posters and job applications. She grew the
number of hires from point-of-purchase materials from 3 percent to 12 in just
over two years.
All of the creative output comes from
Bean’s employment marketing group. They designed an intranet site that is used
to share all of the files and materials with the various brands and franchisees
around the country. Templates for classified ads, posters and job postings go
on that site so she can control the graphic standards for Yum’s employment
advertising across the country.
Sending the message
Employment branding,
retention and company performance are inextricably linked. Yum first began to
pay close attention to this connection—especially with regard to branding--in
1999, when the labor market was tight. The company took the unusual step of
hiring an employment-marketing manager to act as a sort of gatekeeper for its
employment brand. It hoped not only to attract workers but also to retain the
ones it already had.
"Regularly communicating with
employees, whether it’s quarterly or annually, and recognizing individuals,
whether it’s a birthday or an anniversary, shows a return on that
investment," says Teresa Siriani, president of People Report, a consulting
firm that specializes in workforce-management metrics, trends and best
practices for the food-service industry. Communications that come from senior
management to hourly employees can help reduce turnover by 10 to 15 percent,
she says.
Yum operates headquarters--or restaurant
support centers, as it calls them--in various cities for each brand. Each
restaurant support center recognizes employees in its own way. In many of the
offices, for instance, employees fill out "walk the talk" cards that
give recognition to a coworker who has done something great. These are posted
in cases near the elevators, so people can read them while they’re waiting. Every
so often, these cards will be put into a bin, and one is drawn. That’s when the
band pays a visit to that colleague at Yum headquarters in Louisville,
Kentucky. At Taco Bell’s headquarters, a colorfully dressed woman wearing
striped socks pays visits to colleagues on a scooter, handing out awards.
"Yum is moving in the right
direction," says Rick Garlick, Ph.D., director of strategic consulting at
Maritz Research Hospitality. Given the high turnover in the fast-food industry,
the challenge is having employment branding be about more than putting up
placards in stores. An employment brand is successful if employees exhibit
energy, commitment and competence, says Garlick. For that to happen, companies
have to invest in training, which Yum has done.
Retention’s effect on sales
The declining turnover rates at Taco Bell indicate that
employees are beginning to feel energy around the Yum brand. In 2000, the
turnover rate for hourly workers at Taco Bell was up near 200 percent. By the
second quarter of 2003, the turnover rate had dropped to 98 percent, when the
fast-food industry average for hourly workers is 120 percent.
Retention also is reflected in the
bottom line. At Taco Bell, the stores in the top 20 percent for employee
retention had double the sales and were 55 percent more profitable than those
in the bottom 20 percent, wrote James Heskett, Earl Sasser and Leonard
Schlesinger in a 1997 book titled The Service Profit Chain: How Leading
Companies Link Profit and Growth to Loyalty, Satisfaction and Value.
As Yum has lowered the turnover rate
among hourly employees, it has also delivered better service to customers. Taco
Bell recently ranked second in an annual study on drive-thru effectiveness
conducted by QSR magazine. Two years ago, Taco Bell ranked 14th.
Although employment branding is
important, it isn’t the silver bullet that will cure whatever ails a
corporation. "Many organizations worldwide believe the way to keep people
is to conduct internal programs such as employee appreciation, employee of the
month and themed lunches," says Dick Finnegan, chief client services
officer at TalentKeepers, a provider of employee-retention solutions to
corporations. But, he says, "it won’t work if employees report every day
to someone they don’t respect or trust."