Outside Insights | July 2017 | By Guest Author

Why It's Critical to Reward Great Hiring Practices

If your managers are rewarded for just speed of service, how can you expect them to care about interviewing?
Great staff is the key to profitability. flickr: Rilee Yandt
Bookmark/Search this post
Email this story Email this story
Printer-friendly versionPrinter-friendly version

Let’s start with a riddle. Your manager has scheduled an interview with an applicant who you know will make a really good addition to the crew. But when the interview comes, the manager is short-staffed and speed of service will suffer if he or she conducts the interview. What would your manager do, and what would you want your manager to do?

Most managers will ignore the applicant. Managers get rewarded on speed of service, but if they disregard an applicant, nobody will ever know. Yet, until managers can hire the staff they need, they will be constantly understaffed with slow speed of service.

The Catch-22

The conundrum above is a real-life example of problems surrounding conflicting employee bonuses. In fact, the 2016 Nobel Prize in economics was awarded for research on just this topic. In short: if you pay employees for doing one thing well, but not another thing, they will spend more time and energy focusing on the thing they get bonuses for. And this might not always be good for your company.

Most quick-service restaurants pay their managers for performance that generates high sales at low costs that are easily measurable, such as labor as a percentage of revenue, or speed of service. However, quick-serves frequently ignore activities that would cause managers to hire well. Building a high-performing crew unlocks new levels of revenue generation and efficient operations. Instead, what ends up happening is persistent under-staffing, which causes manager overload, slow speed of service, and expensive overtime pay.

Quick-serve operators often realize this is a challenge, but aren’t sure how to overcome it.

Technology makes it easy for quick-service restaurants to reward great hiring practices, like contacting applicants quickly and being available for scheduled interviews.

For the first time, new technology like applicant tracking systems (ATS) make it easy to see whether your managers are using best practices like calling applicants quickly and hiring regularly. Now, operators can begin to reward for them.

Many multi-unit managers aren’t sure how many applicants their locations are getting. They assume an applicant who was never contacted by a simply never answered the phone. That sometimes happens, but it is just as likely that a general manager never tried to reach their applicants or that the general manager was not available to see an applicant at the time the applicant was scheduled for an interview.

With applicant tracking systems, it’s much easier to track how quickly applicants are called, and to reward managers for it. Most online websites include the date of application next to the applicant’s information, and multi-unit managers can easily see whether applicants more than three days old have not been contacted yet.

There are a few actions that work well to incorporate incentives around great hiring practices. It starts with the multi-unit manager checking which of their general managers are moving their applicants through the system all week. General managers can be rewarded through bonuses, recognition, or whatever method the operator prefers for having the highest percentage of their applicants interviewed within three or four days.

Eventually, the operator will begin to have examples of how their general managers with regular hiring practices also have the fewest no call/no shows, the best speed of service, and the lowest labor as a percentage of revenue. This will encourage other managers to make time for hiring every single day as well.

Some operators may choose to use an online evaluation to filter applicants before the manager tries to reach them to interview them. If the evaluation is a good one, which is calibrated specifically for the client, it will help managers spend less time hiring even while they put more energy into hiring the best applicants. Ask the providers you are considering how they ensure that the evaluation they sell is calibrated specifically to your employee pool.

Now that it’s easy to know whether your general managers are prioritizing hiring, there’s no reason not to reward them for it. Quick-service restaurants have mastered the science of food, marketing, and real estate costs. It’s high time to unlock best hiring practices. Great staff is the key to your profitability, and your managers should be rewarded for investing in that.

Sara Nadel is the Founder and CEO of StellarEmploy, which uses technology and data to help companies hire their best-fit employees. Dr. Nadel holds a PhD, and StellarEmploy has been recognized with several awards for its approach to talent analytics and recruiting hourly workers. Contact her at [email protected], or visit www.stellaremploy.com.

Tim Furr is the Chief Operating Officer of Cambridge Franchise Holdings, a 120-unit Burger King franchisee. Under his leadership, store-level margins have improved by 850bps and same-store sales have improved by +15 percent.