All posts by David Shadovitz

Tackling Turnover at Taco Bell

As you might expect, labor is a huge deal for fast-food restaurants such as Taco Bell Corp.

Making sure stores are appropriately staffed with engaged workers is a top priority for the Irvine, Calif.-based firm, which has 830-company-owned outlets and 30,000 employees (nearly half of whom are 22 years old or younger).

As Taco Bell Vice President of People and Experience Bjorn Erland explained yesterday during a session titled “Taco Bell Enhances Its People Strategy with a New Analytics Recipe” at this week’s WorldatWork Total Rewards Conference and Exposition, controlling turnover is a major challenge for the firm.

During the Great Recession, Erland said, Taco Bell’s turnover rate decreased dramatically; but beginning in 2012, it began to rise again while engagement scores began to fall.

Leadership was hearing that pay was a major reason people were leaving. But in order to come up with the right game plan, HR knew it needed more data. So it brought in global consultancy Mercer to better understand the key drivers behind the high turnover and identify ways  to address it.

When it looked at why workers stuck around, Taco Bell, a unit of Yum! Brands, found that a flexible work environment and strong culture were major drivers. As to why people were leaving, factors such as a high level of stress, lack of training and better opportunities elsewhere emerged as a big contributors.

In an effort to better understand the part pay practices were playing, Mercer studied more than 500 company owned U.S. restaurants and 20,000 employees over a 13-month period.

“We looked at workforce factors such as starting pay, pay levels and bonus payments,” said Rick Guzzo, a partner in the Washington office of Mercer. “Then we looked at how long [people] were working at Taco Bell, their average age … and external factors such as store size and where the store was located.”

Well, the big “Aha!” for Taco Bell was learning that earnings were far more important to workers than their rate of pay. Were they working enough hours, including overtime, to bring home a bigger paycheck? (Erland noted that Taco Bell’s pay was competitive with others in the industry.)

In light of these finding, Erland said, the company began to increase its use of “slack hours” to increase the amount of employee take home pay. “Turnover improved when employees were able to bring home more earnings,” he said.

Indeed, the study found that employees who worked 100 hours or more a month were 71 percent more likely to stay than those working fewer hours. “This was eye opening. It’s not a guarantee, but it’s almost like a guarantee,” Erland said.

The research also found a strong correlation between poor store performance and regional general manager turnover.

“You can’t stabilize team-member turnover unless you stabilize the turnover above the restaurant [level: area coaches and RGMs],” Erland said.

Erland noted that 600 out of its 900 company owned store managers had new supervisors in 2015. “That’s just not normal,” he explained. “So we put in place a process in which the COO and I approve any area coach moves” and added “a bonus plan for area coaches that was tied to RGM stability.”

The other thing area coaches often did, he said, was take an RGM who was a superstar in an A store and put them in an F store to turn it around. “What you end up getting are two Cs,” he said. “So we told them don’t move them around; keep them at the A store and we’ll figure out the F store… . As a result, they didn’t move RGMs around much at all last year.”

Next year, Taco Bell is also looking to test the idea of applying variable pay to filling its late-night shifts. “It’s hard to get someone to come in at midnight and work until 4 in morning,” Erland said. “So we have to differentiate the pay [for those workers].”

Hours before Erland shared his story, Taco Bell issued a press release that announced the second stage of a partnership with Roadtrip Nation. The partnership highlights various career paths within the organization, in order to make it easier for current and future employees to match their job needs and goals with the firm’s career opportunities.

Stories of current employees and alumni are featured on the Roadtrip Nation platform, so both current and prospective employees can gain a better understand of what needs to be done in order to achieve their career goals, whether it’s managing a Taco Bell restaurant, working in the marketing department at headquarters or taking skills to another industry all together.

“The platform aims to foster networks and communities and empower team members by hearing about their lessons learned and career paths of others,” according to the press release.

One alumni interviewed and featured is Fred Mossler, former senior vice president of merchandising at Zappos and an entrepreneur. Mossler’s first job was cleaning dishes at Taco Bell, where he worked his way up to a supervisor.

Giving Workers a Reason to Stay

If you’re looking for more proof that recognition matters, check out this Friday morning the results of OfficeTeam’s latest survey.

Exactly two-thirds (66 percent) of the 750 workers surveyed said they’d likely leave their job if they didn’t feel appreciated, up from 51 percent who responded that way in 2012. That’s certainly a pretty substantial jump over a five-year stretch. In contrast, just over half (54 percent) of 600 senior managers questioned believe it’s common for staff to quit due to lack of recognition.

Asked to share the best form of appreciation from a boss or colleague that they received, those questioned offered up some wide-ranging answers, including: a handwritten thank-you card from the chief operating officer; a new car; being named employee of the year; an all-expenses-paid trip to Jamaica; and a donation to a nonprofit in my name.

In a press release on the findings, OfficeTeam District President Brandi Britton noted  …

“All professionals like to be acknowledged for their contributions, and not just once or twice a year. While monetary rewards are always crowd-pleasers, companies don’t need to spend a lot to show appreciation to their workers. Regular praise and even tokens of gratitude can go a long way.”

Employees were also asked to share the strangest form of recognition they personally received at work—and their responses included a few dozzies, including a loaf of bread, a custom statuette of the recipient, edible flowers, an expired gift certificate, a $0.03 raise and socks.

Just a few things to consider—and not consider—as you plan for Administrative Professionals Week, which runs from April 23 to 29.

Taking Well-being’s Pulse

If there’s a single item that runs through Aon Hewitt’s 7th Annual Consumer Health Mindset Study, released yesterday at the National Business Group on Health’s Business Health Agenda 2017 in Washington, it’s that well-being continues to be a work in progress. (You can pre-register here for the full report.)

The study of 2,503 consumers, mostly employees and their dependents, found that well-being is continuing to have a big impact, with all well-being dimensions (financial, physical, emotional and social) being viewed by employees as important.

The findings suggest that consumers are increasingly looking at well-being in a holistic way, certainly a good sign for employers as they attempt to expand their well-being footprints. In light of this, one of the recommendations offered by Aon Hewitt Partner Joann Hall Swenson at a general session on the survey’s key takeaways was for employers to build workplaces that can support well-being in its entirety.

It’s also worth noting that, according to the study, some of the more traditional elements of physical wellness experienced a decline in importance over the past year. Diet, for example, decreased in importance by 7 percent, from 65 percent to 58 percent. Exercise, meanwhile, dropped 6 percent, from 59 percent to 53 percent.

Swenson suggested that employers might want to refresh their efforts in both those areas.

Employers, of course, would like nothing more than to see a greater percentage of employees become better consumers. Right? Better consumers make better decisions, after all.

Well, if the study’s findings are correct, employers still have more work to do on this front as well.

A takeaway from the study is that savvy consumerism continues to be a challenge as far as healthcare is concerned. Among the data points shared by Swenson: 77 percent of the respondents regretted a health decision they made, and only 40 percent said they know where to go to find out what a particular health service costs, down 7 percent over the past year.

“When you look at the number of people who bring a list of questions to their doctor and the number of people who are looking at costs before having a procedure, those numbers are down,” Swenson pointed out.

Then there’s the high level of frustration and confusion patients experience navigating the healthcare system, another key finding cited by Swenson. “Patients are losing their patience,” especially in the case of emerging millennials, she said.  “Many are giving up and throwing in the towel.”

To address this, she said, employers need to use technology to simplify the health-navigation process.

The survey also took a deeper dive into the area of mental health than in past years, finding that the issue continues to reside “in the shadows.” Not surprisingly, it found that stress continues to be on the rise, with the percentage of respondents reporting high stress levels at 54 percent, up 5 percent over the past year. Of those reporting high stress, 74 percent said they were experiencing more and more obstacles that stood in the way of receiving treatments.

Consumers, Swenson said, would like to see more one-on-one assistance from their employers, greater flexibility in terms of arranging for appointments and an expanded provider network from which to choose.

Finally, Swenson said, consumers want healthcare and well-being to be a multichannel experience, one that includes email, mobile and social. Messages and information, she added, need to be delivered when they’re needed, not when it’s convenient for the employer. (The topic of personalization was addressed at several other points during the NBGH event.)

Farewell to OSHA Rule

Looks like another Obama-era rule is about to bite the dust any day now—this time involving the Occupational Safety and Health Administration.

On Thursday, the Senate voted 50 to 48 (two Republican senators abstained) to eliminate an Obama-administration rule that required companies to retain their records of workplace injuries, illnesses and deaths for five years after an incident occurs. Roughly three weeks before, the House voted 231 to 191 to roll back the regulation. Now, the bill—passed under the Congressional Review Act, which gives Congress the ability to use a simple majority to roll back rules within a 60-legislative-day window—is just waiting for President Trump’s signature. (The president has indicated he would sign it.)

Under the Obama-administration rule, which went into effect in January, OSHA was given the ability to issue citations to employers that failed to track such incidences for five years after they took place. Previously, the statute of limitations was six months.

Senate Labor Committee Chairman Lamar Alexander (R-Tenn.) said the Obama legislation is the result of a policy that “makes no sense, does not help any workers, harms smaller employers most of all, and ultimately is rejected by Congress.”

Meanwhile, Congressman Bradley Byrne ( R-Al.), author of the legislation, issued a statement applauding the Senate’s vote: “We should be focused on practive policies that help improve workplace safety instead of punitive rules that do nothing to make America workers safer,” he said. “We took a major step in the right direction today by restricting OSHA from moving ahead with such a flawed regulation.”

Of course, the bill has its detractors, too.

Prior to the Senate vote, Jordan Barab, a former Deputy Assistant Secretary for OSHA (2009 to 2017) posted an article on the Economic Policy Institute site that was critical of Congress’ efforts to kill the rule. Barab points out in the piece that “without being able to enforce any violation within the five-year period, enforcement of recordkeeping accuracy would be almost impossible.”

Yesterday, I asked Edwin G. Foulke Jr., a former assistant secretary of labor for OSHA and a partner in the Atlanta and Washington offices of Fisher Phillips, to weigh in on the potential impact of the move. As he put it:

“When you look back to the ’80s and ’90s, when we used to get the real large penalties of six figures or [more], many times it involved cases with recordkeeping violations going back a number of years. So [the rollback] is going to limit the number of the large citations you’re going to see from a recordkeeping standpoint.”

Of course, he added, employers are still going to be required to maintain those records. “It’s just that OSHA is not going to be able to go beyond the six-month time frame that’s in the act itself.”

As for what other OSHA rules might be in the sights of the Trump administration, Foulke pointed to electronic filing. For now, he said, OSHA is moving forward because no one has told it not to. But once a new Secretary of Labor is confirmed, he added, that could change.

Downsizing the DOL

As many expected, the Department of Labor didn’t escape President Trump’s 62-page budget plan (released yesterday) unscathed. But the extent of the proposed cutbacks should certainly raise a few eyebrows.

On a percentage basis, the DOL tied the Agriculture Department for third place on the list of agencies being targeted for biggest cutbacks (with a 21-percent decrease), just behind the Environmental Protection Agency (31.4-percent decrease) and the State Department (28-percent decrease).

From a dollar standpoint, under the plan, the proposed DOL budget would be slashed by $2.5 billion—to $9.6 billion.

So how will the DOL find these savings?

The budget plan points to areas such as job-training grants, Bureau of International Labor Affairs’ grant funding, the closing of Job Corps centers, the elimination of less-critical technical-assistance grants from the Office of Disability Employment Policy, and Occupational Safety and Health Administration’s training grants. In many of the cases, the administration’s hope is to shift more of the burden onto the shoulders of the states.

But as Washington-based Seyfarth Shaw Senior Counsel Larry Lorber pointed out yesterday in a phone interview, the cited cuts (some with dollar figures attached to them, others without) won’t get the DOL close to its $2.5 billion goal.

“There’s a big gap between the cutbacks announced and $2.5 billion,” Lorber said. “So the big question is, where are you going to make up the difference?”

Lorber said it’s ultimately going to have to come from salaries and expenses. He specifically pointed to the Wage and Hour Division and OSHA as possible candidates, since salaries and expenses make up a substantial part of their overall budgets.

So what does this all mean for employers?

Well, for starters, Lorber said, staff and travel cutbacks at entities such as WHD and OSHA are inevitably going to translate into less enforcement. Many employers, he suggested, may very well welcome the fact that if travel is reduced, enforcement isn’t going to happen.

But, he added, some employers aren’t going to be pleased to see many of the training programs and grants go away, as is being proposed. (The plan specifically proposes the elimination of the Senior Community Service Employment Program, which transitions low-income unemployed seniors into unsubsidized jobs—calling the program “ineffective.”) Lorber said it’s not likely that states are going to pick up the slack here.

Things, of course, can certainly change between now and when a more detailed budget makes its way through Congress. But it’s probably safe to expect that R. Alexander Acosta — assuming he is confirmed as Secretary of Labor — is going to have a fairly downsized department to work with as performs his duties. (Acosta’s confirmation hearings are now scheduled to begin on March 22.)

Is Signet’s Response Enough?

On Tuesday, my colleague posted a piece on the gender-discrimination suit against Signet Jewelers Limited and some of the coverage it’s garnered.

As most of you are aware, The Washington Post reported on Feb. 27 that, according to arbitration documents obtained by the paper, hundreds of former employees of Sterling Jewelers, parent of Jared, the Galleria of Jewelry and Kay Jewelers, claimed “that its chief executive and other company leaders presided over a corporate culture that fostered rampant sexual harassment and discrimination.”

The story said …

“Declarations from roughly 250 women and men who worked at Sterling, filed as part of a private class-action arbitration case, allege that female employees at the company throughout the late 1990s and 2000s were routinely groped, demeaned and urged to sexually cater to their bosses to stay employed. Sterling disputes the allegations.”

Well, yesterday, Signet announced it would be taking additional steps “in the spirit of continuous review and improvement of its policies and practices.”

Signet Chairman Todd Stitzer pointed out in a press release that the retailer “outperforms national averages in the percentage of its store management staff who are female.” But in its quest to be “an employer of choice, we are taking a number of additional steps to ensure our policies and practices are functioning as intended and to identify areas where we can further improve.”

These steps includes the formation of a new board committee focused on “respect in the workforce”—and programs and policies aimed at supporting the advancement and development of the company’s female team members, the release states. The new committee, it states, will appoint an independent consultant to conduct a thorough review that will cover “current and future company policies and practices regarding equal opportunity and workplace expectations, including those covering non-harassment, training and reporting, investigation and non-retaliation.”

The committee will also establish an independent Ombudsperson office to provide confidential advice and assistance to employees who express workplace concerns.

Of course, these steps by the company are all well and good. But are they also simply one more example of a “too little, too late” response. Thomas B. Lewis, an attorney with Stevens & Lee in Princeton, N.J., thinks so.

“The company is talking about its training, its policies, its procedures–and that’s all great. But the real question should be, Did the company take action and enforce its own rules and policies to make sure this behavior is not rampant in the various stores?”

Lewis puts Signet’s problems in two buckets. First, there is the legal aspect, he says. At some point, according to him, that’s going to be resolved. The other—and perhaps bigger issue—is the public-relations problem, he says. Because of all of the negative press, Signet’s sales could take a hit, Lewis says, noting that “you could have a lot of people boycotting the stores and shopping somewhere else because of these allegations.”

In outlining the steps it’s planning to take, he adds, Signet is effectively responding to what the U.S. Equal Employment Opporunity Commission will most likely require them to do.

“It’s a smart thing to do, but they’re really doing it from a public-relations point of view,” he says. “They want to get the message [out] that they’re taking these allegations seriously.”

 

Apple’s Latest Design Feat

Architectural firms are continuing to push the envelope as far as workplace design is concerned.

Last July, some of you may recall, I wrote about Amazon’s new corporate headquarters in downtown Seattle and the three giant transparent spheres, which serve as greenhouses for more than 3,000 species of plants. (The spheres, BTW, are slated to be open later this year.)

Well, now, joining the parade is Apple and Apple Park, the company’s 175-acre campus. Beginning in April, around 12,000 employees are scheduled to move to the new site over a six-month period.

As a recent Apple press release put it, “Apple Park is transforming miles of asphalt sprawl into a haven of green space in the heart of the Santa Clara Valley.”

The campus realizes Steve Jobs’ vision of creating a “home of innovation for generations to come,” according to Apple CEO Tim Cook. The workspaces and parklands, he says, are “designed to inspire our team as well as benefit the environment. We’ve achieved one of the most energy-efficient buildings in the world and the campus will run entirely on renewable energy.”

The intent is to create a wonderfully open environment for people to create, collaborate and work together, adds Apple Chief Design Officer Jony Ive.

As you might expect, the campus reflects Apple’s “intense focus” on design.

Apple Park, which was designed in collaboration with London-based Foster + Partners, includes a visitors center and cafe that will be open to the public, a 100,000-square-foot fitness center for Apple employees, two miles of walking and running paths for employees and the Steve Jobs Theater, which is slated to open later in the year.

To be sure, collaboration, innovation and environmental friendliness—the objectives that are included in Apple’s press release—lie at the heart of campuses like Apple Park. But, as a recent study conducted by Sodexo also reminds us, we’d be making a mistake were we to overlook the talent-acquisition and retention benefits of creating more alluring work environments.

The Sodexo study of 2,800 U.K. knowledge workers, titled “Creating a Workplace That Maximises Productivity,” found that 67 percent of those workers said they had left their last jobs because their workplaces were “not optimized for them” and 69 percent of them said  workplace design directly impacted their effectiveness.

I have to imagine that was in the backs of some folks’ minds at Apple, as well, as they worked to fulfill Steve Jobs’ vision.

End note: Don’t forget today is Employee Appreciation Day—so try not to behave like this CEO in the car (even if the recipient of his rant isn’t actually an employee)!

 

Co-Workers: Friend or Foe

If you’ve even been edged out of a job and didn’t see it coming, you’re apparently not alone.

New research from Washington University in St. Louis reveals workers, more often than not, have difficulty figuring out who may be edging them out of their positions.

Hillary Anger Elfenbein, professor of organizational behavior and one of the researchers, points out, “You tend to know who likes you. But, for negative feelings, including competitiveness, people [in the study] had no clue.”

How did the researchers reach their conclusion?

Elfenbein and her co-authors, Noah Eisenkraft from the University of North Carolina at Chapel Hill and Shirli Kopelman from the University of Michigan, first surveyed salespeople at a Midwestern car dealership where competition was both normal and encouraged. They then studied more than 200 undergraduate students in 56 separate project groups. All were asked similar questions about their co-workers, and what they assumed those people thought of them.

In a story on the research appearing on the Washington University of St. Louis website, Erika Edsworth-Goold quotes Elfenbein as saying …

“Some people show their competitiveness, some people you can tell have it out for you, but others have it out for you and act like they’re your close friend. Those two effects wash out, and people on average have zero idea about who feels competitively toward them.”

The researchers, Edsworth-Goold reports, offer two main reasons for the disconnect: First, people tend to mask outward feelings of competitiveness toward others in an effort to be polite. Also, the concept of reciprocity played a role.

Reciprocation, he says, is a good thing. “You keep dates, you give gifts, you have shared, positive experiences. But to get the benefits of competition, such as promotions or perks, you don’t need it to be reciprocated. And when you don’t get that feeling back, it’s hard to gauge who’s truly competing against you.”

In light of this, Elfenbein is quoted as offering following advice to those worried about being blindsided?

“You need to pay more attention to what people do rather than what they say. When people are too polite to say something to your face, you need a good, strong network that will let you know what other people really think.”

Lipnic Outlines EEOC Priorities

I’m sure many of you are wondering what the Equal Employment Opportunity Commission might look like under the Trump administration. Well, yesterday, we were given a bit of a glimpse, when newly named Acting Chair of the EEOC Victoria Lipnic offered her first public comments during a discussion and live webinar that took place in the Chicago offices of Seyfarth Shaw. (Lipnic served as counsel for the law firm before arriving at the Commission in 2010 and was named Acting Chair of the agency by President Trump on Jan. 25.)

Seyfarth Shaw Partner Gerald Maatman, author of the recently released 13th Annual Workplace Class Action Litigation Report, joined her for the discussion.

As reported in an article appearing on the Corporate Counsel website, Lipnic suggested that the agency will “focus on cases involving age discrimination and equal pay while exploring ways to foster job growth in companies.”

“Lipnic said she believes more will remain the same than will change,” according to the Corporate Counsel piece. “ ‘We are an enforcement agency … and the EEOC is committed to its core values and mission, to enforce civil rights laws in the workplace.’ ”

She also said she wanted to “re-evaluate the costs and benefits of the modified EEO-1 report, a detailed compliance survey that employers must fill out,” the story reported.

Speaking to that point, Randy Coffey, a partner with Fisher Phillips in Kansas City, commented in a piece posted on HREOnline earlier this month that “Lipnic opposed additions to the current EEO-1 reporting requirements relating to collection of employee pay data, due to the burden of compliance for employers and the lack of usefulness of this type of generalized data.”

I suspect we’ll see, in fairly short order, how this ultimately translates into policy changes.

What to Expect from Gen Zers

As 2016 winds down, I can only guess at the number of surveys I’ve seen that are connected in some fashion to the subject of millennials. Let’s just say, for argument’s sake, the figure has to be in the hundreds.

thinkstockphotos-605751628Well, could we soon be in store for something similar when it comes to Generation Z?

For now, I’ll just leave that question hanging. But we’ve already seen a fair share of Gen Z predictions and reports over past 12 months, with the latest coming from 8×8 Inc., a provider of SaaS-based enterprise communication tools.

That study, titled “Rogue One: How Generation Z is Going to Bring Balance to the (Work)Force,” surveyed 1,000 full- and part-time Gen Z, millennial and Gen X workers, and found that the work preferences of Gen Zers may, in many ways, align more closely with Gen Xers than millennials. More precisely, the findings suggest that Gen Zers are less tech-dependent than millennials and more similar to Gen X when it comes to adopting high-tech devices and apps in their personal lives. Millennials, the study revealed, are more likely to use wearables (39 percent), connected appliances (35 percent) and virtual reality (24 percent) than Gen Z or Gen X.

What’s more, Gen Zers (200 of the respondents were classified as such) value face-to-face communication more than any other generation, with an emphasis on effectiveness over convenience—a major shift from how millennials prefer to work.

As 8×8 Inc. CMO Enzo Signore explains …

“We found that while millennials have encouraged the workplace to become more technologically advanced and remote-work friendly, Gen Z will bring more balance to the workplace through face-to-face communication and tools that will help them communicate more effectively. We believe this will start to have an impact over the next 12 months.”

That conclusion certainly appears to run somewhat counter to the images of teenagers who can’t seem to take their eyes off of their smartphones.

Most of us, of course, are just beginning to ponder the question: What can we expect from this next wave of workers? So to deepen my own understanding (and hopefully yours as well), I figured who better to ask than Bruce Tulgan, founder of consultancy RainmakerThinking Inc. and an expert on generational diversity issues.

Tulgan says he prefers to define Generation Z as those born between 1990 and 2000 and in the “second wave” of the great millennial cohort. As he explains …

“Gen Zers were small children on 9/11/01. They graduated from high school and [maybe] went through college or university during the deepest and most protracted global recession since the Great Depression. They are entering the workforce in a ‘new normal’ of permanently constrained resources, increased requirements placed on workers and fewer promised rewards for nearly everyone.”

As a whole, he adds, millennials embody a continuation—and Gen Z, perhaps the culmination—of the larger historical forces driving the transformation in the workplace and the workforce since the early ’90s: globalization, constantly advancing technology, the painfully slow death of the myth of job security, the accelerating pace of everything and more.

In many ways, Tulgan says, Gen Zers represent a whole new breed of worker. “Advances in information technology have made them the first generation of true ‘digital natives,’ ” he explains. “They learned to think, learn and communicate in an environment defined by wireless Internet ubiquity, wholesale technology integration, infinite content and immediacy. They are totally plugged in—through social media, search engines and instant messaging—to each other as well as anyone and everyone, and an infinite array of answers to any question at any time.

This second-wave millennials, Gen Zers, will usher in the final stages of the great generational shift.

So what can we expect from this second wave when it comes to institutions?

Tuglan predicts that Gen Zers will never see established institutions as their anchors of success and security. Instead, he says, they will be most likely to turn to their most reliable anchors growing up: hand-held super-computers, proximately powerful grown-ups, and the ability to construct a unique identity—a personal brand—that they can wield in public (mostly on social media) and revel in privately.

The latest study’s findings about Gen Zers being more “balanced” than, say, millennials, “certainly [underscores] the case that interpersonal relationships and in-person communication play very important role[s] for [them],” says Tulgan.

Guess we’ll begin to find out soon enough if these predictions come to pass in today’s (and tomorrow’s) workplace.