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P r e s e n t e d by

A Comprehensive Guide to

Employee BenefitsIt is becoming increasingly difficult for restaurants to hold onto valuable employees. Take a look at the latest research from TDn2K™ on why employee turnover is such a challenge and how revamping your benefits offerings can improve both your employee retention and operational performance.

V i s i t u s a t t d n 2 k . c o m

Q u e s t i o n s o r c o m m e n t s ?C o n t a c t u s a t i n f o @ t d n 2 k . c o m

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Find out exactly how much your turnover is costing you with Our

free Turnover Calculator.

Overview

Employee expenses are on the rise. Coupled with the declining sales growth

across the restaurant industry, this is something many restaurant operators simply

cannot afford. However, there is one thing more costly than employee expenses.

People Report™ data reports that the cost of turnover is now over $2,000 for

hourly employees and over $15,000 for management employees.

Employee Expenses are on the rise

IT’S TIME TO RE-EVALUATEYOUR EMPLOYEE BENEFITS OFFERINGS

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It is becoming increasingly difficult for restaurants to hold onto their valuable employees. So, what’s the secret to making them stay?

One cannot overstate how important job benefits are becoming to restaurant employees. The workplace has changed dramatically over the past two decades, and the modern work-er has a complexity of different needs than workers of the past. With turnover steadily ris-ing, companies must get more creative in identifying what their employees need the most.

Find out exactly how much your turnover is costing you with Our

free Turnover Calculator.

Education Assistance Paid Parental LeaveHealthcare

Compensation

What healthcare plans are you offering to employees, and

how much does it cost them?

Education assistance programs are a valuable tool to engage your employees.

Paid parental leave is becoming a critical benefit in the workplace for millennials.

Work/Life BalanceOverloading employees with

work responsibilities can result in decreased performance.

Professional Development

Job training should continue throughout an employee’s

career, not just the hiring process.

Opportunities for higher pay is a top reason for voluntary

employee turnover.

40% of hourly employees terminate within the first 90 days of their employment. 35% of managers terminate within the first year.

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Although the actual cost of healthcare plans has only

changed slightly, Employees are paying more expenses &

coverage is not what it used to be.

Data Tracked by Corporate Compensation and Benefits Survey (CCBS):

Participation in PPO plans has decreased since 2014 as employees switch to the more cost-efficient HMO plans.

Costs paid by employees for PPO plans have increased slightly. In comparison, the average monthly cost for “employee only” coverage for HMO plans has de-creased slightly from 2014.

Employees are seeing the biggest disadvantage in mounting out-of-pocket expenses. Even for HMO plans, individual deductibles and out-of-pocket maximum totals have increased over the past three years.

PPO Participation Cost of Plans Out-of-pocket

Healthcare

One of the biggest necessities for low-wage employees today is healthcare. Unfortunately, according to the 2017 Corporate Compensation and Benefits Survey (CCBS) produced by People Report, the cost of healthcare plans offered in the restaurant industry is rising.

The monthly cost of PPO and HMO plans for employee-only coverage, as well as employee +1 and employee plus family coverage. Metrics are shown by position level for each of the segments and company size groupings.

Medical office visit copays, generic and brand name prescription copays, deductibles and out of pocket maximums by position level.

Health benefits for part-time employees, including average cost of limited benefit plans offered, well-ness program usage and commonly offered programs

C o n t a c t J e n n i f e r H u b e r t a t j e n n i f e r . h u b e r t @ t d n 2 k . c o m f o r m o r e i n f o r m a t i o n a b o u t t h i s r e p o r t .

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Education Assistance

Well-being is just a part of our foundation and a part of our people goals overall, and we seek to create the best life for all of our team members.”

Kelli Valade, President of Chili’s on Brinker’s education assistance program

“

Over the past few years, several companies have touted education assistance as an accessible offer for their employees. Research from People Report has shown that benefit offerings such as education assistance can go a long way in improving employee relations and long-term retention for restaurants.

Brinker’s “Best You EDU” Starbucks’ “college achievement plan”

Pearson Lavoro Education Services

Brinker International recently unveiled its education assistance program, called “Best You EDU.” This program was developed in partnership with Pearson and is available to all employees throughout the orgnanization. The program currently offers English as a Second Language (ESL) courses as well as educational tracks to help team members achieve a GED or associate’s degree at no cost.

Starbucks created its College Achievement Plan to give all part-time and full-time employees full tuition for a bachelor’s degree program at Arizona State University. Additionally, earlier this year, Starbucks created the Pathways to Admission program. This program offers personalized help to employees whose grades don’t yet meet the requirements for college admission so that they can become eligible for their degree.

Pearson is a learning company that offers tools, content, products and services to help companies develop their employees both in and out of the workplace. Tools include specialized assessments, curriculum development, informal learning programs, leadership development and more. Pearson most recently partnered with Brinker International to help develop their “Best You EDU” program.

Startup Lavoro Education Services is partnering with educators and employers to create low or no tuition pathways to a college education. The organization offers educational programs to both corporate leaders and students to help develop core competencies that make for a thriving business.

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Paid Parental Leave

48%Currently, only 48% of workers in the service industry receive paid sick leave,

according to the U.S Labor Department.

Union Square Hospitality Group

Yum! BRands

Last year, Union Square Hospitality Group announced that it was extending eight weeks of paid parental leave to all workers at their restaurants. This included four weeks at full pay, and four weeks at 60 percent pay. Erin Moran, chief culture officer of Union Square Hospitality Group, explained that paid parental leave is “the continuation of that emphasis of being a place where people can grow their careers. We realize people’s lives evolve over time, and we want people to have full lives both inside and outside of work.”

Yum! Brands began offering six weeks of fully paid parental leave to all fathers, partners, adoptive and foster parents as well as 18 weeks of fully paid maternity leave to birth mothers. This is open to all corporate employees across Yum’s three brands: Taco Bell, Pizza Hut and KFC. Previously, the company only offered six to eight weeks of paid time off for mothers and no time off for fathers or partners.

only 6% of workers in the hospitality industry receive paid family leave,

according to the Pew Research Center. 6%

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Professional development

People Report People Report research has revealed that continued training can lead to decreased turnover.

In restaurants where trainers spend at least 1 percent or more of training time on supervisory skills, management turnover was 10 percent lower than at companies who spent no training time on the topic. Similarly, companies that offer four or more hours of orientation to new employees report almost 10 percent lower hourly turnover than those who offer less than four hours.

Discoverlink

DiscoverLink is a learning management system designed for the hospitality industry.

It incorporates crucial training and development classes in an e-learning platform to ensure all employees have the expertise they need to succeed. Some of the content programs include employee and manager development, compliance training, multi-unit leader training and successfully turning assis-tant general managers into effective general managers.

ServSafe Program

The National Restaurant Association offers a number of professional development opportunities.

The ServSafe program for foodservice employees “leads the way in provid-ing comprehensive educational materials to the restaurant industry through face-to-face and online instruction.” This program includes specially designed exams and curriculums that train employees on properly handling and serving food and alcohol in restaurants.

Professional development in the workplace has begun to emerge as a more desirable benefit. Fortunately, professional development in the workplace is rewarding to employers and employees alike. And, it turns out there are a number of development resources that operators have at their disposal.

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Work/Life Balance

“Work/life balance” is an elusive concept in most workplaces, but particularly so in the restaurant industry. The demands of feeding hoards of guests often require employees to work around the clock, day in and day out. This results in job burnout, decreased productivity and disengagement with work.

• Over one-third of participants in an engagement study reported that an overload of work responsibilities resulted in sleep loss and severe reduction of energy levels, which led to them taking more sick days and performing sluggishly at work.

• According to CCBS results, while corporate employees received an average of 10 holidays in 2016, hourly employees only received three.

• 67 percent of HR professionals indicated that proper use of time off would lead to increased employee engagement at work.

Thus, operators are finding that if they want to hold onto their star employees and maintain optimal efficiency, they need to give their employees time to rest and recuperate. This means that frontline employees are not receiving some of the quality rest time that they need. According to research organization Project:Time Off, “Vacation is not just a tool for avoiding burnout; promoting time off makes it easier to ask employees to log extra hours at critical moments.”

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Competitive Compensation

compensation

Still matters to Employees

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Bonuses

Long-term Incentives

Merit Increases

Long term incentive programs have declined significantly in use. When viewing long term incentive offerings for restaurant management employees today com-pared to 2014, usage has decreased for incentive stock options, nonqualified stock options and performance shares. Furthermore, long term incentive programs for general managers have declined 11 percent.

Considering the recent dwindling of bonus offerings in restaurants, it’s not surpris-ing that management turnover levels are still increasing. Multi-unit managers in particular are taking the largest hit to their bonuses; over the past few years, both the target bonus and actual bonus payout have decreased dramatically for this group of managers.

Merit increases, or raises based on performance, can be a great tool to drive pro-ductivity in the workplace. However, over the past two years, table service brands haven’t been utilizing them as much as counter service restaurants. And, even in counter service restaurants, merit increases have only risen in line with market increases.

One of the top reasons for voluntary termination in the restaurant industry today is the opportunity for higher compensation elsewhere.

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Restaurants are slowly seeing a gradual increase in state-mandated minimum wages. Activists have been prolific in fighting for an increase in base pay for hourly workers, and are finally starting to see some movement, particularly in larger cities and states. This movement has been met with both praise and criticism from many in the industry.

2012 - 200 fast-food workers walked off the job to demand $15/hr and union rights in New York City. This launched the Fight for $15 movement.

2014 - Seattle became the first city to pass a local ordinance to increase the city’s minimum wage to $15, to be phased out over several years and completed by 2021.

2016 - 19 states increased raised their minimum wage rates throughout the year.

2017 - Opposing research studies highlight the impact of minimum wage increases on the actual wage growth for low-wage workers. One study argues that a wage increase does result in overall wage growth for employees; the other argues that higher mininum wages result in fewer hours worked and therefore lower wage growth.

2018 - San Francisco is expected to become the first U.S. city to reach a minimum wage of $15 per hour on July 1, 2018.

Minimum wage

timeline

The average hourly wage for team members at counter service restaurants is now

(up $0.31 from 2016)

$10.05/hr

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Summary

What’s thebig picture?HERE’S WHY YOU NEED TO CARE ABOUT BENEFITS

Understanding the latest trends is great, but how do health benefits play into the operational success of a restaurant? TDn2K analysis shows how:

• Companies that pay 70% or more of their employees’ health benefit costs are reporting 1.5% higher comp sales.

This demonstrates a clear correlation between taking care of your employees and driving business results for your restaurant.

• Restaurants in the top 25% of sales performance offer 15% higher salaries and 11% higher target bonusus to their general managers compared to the restaurants in the bottom 25% of sales performance.

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Thank you!Questions? Comments? Contact us at info@tdn2k.com

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