By honing development training and peer-to-peer support, this business was able to bust through significant growth barriers.
You have skilled, capable managers working at the top level of your organisation. They know what needs to be done and get it done quickly. But when the time comes for them to move on, or they get poached, the people working at the level below them aren’t ready to step up, or they don’t want to. What do you do?
Scott Quinn CPHR had to answer this question when the scenario played out at Retzos Group, a franchisee of KFC. The company was facing retention issues with its restaurant managers (5 per cent above average turnover rates) and assistant managers (15 per cent above average). On top of that, only 19 per cent of assistant managers had the necessary skills to progress to a manager role.
The situation was hamstringing the business and making it impossible to achieve its key objective of expansion, and as the head of HR and development manager, Quinn knew he needed to fix it. He also decided to use this challenge as the basis of his project to achieve HR certification through AHRI’s Practising Certification Program.
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Retzos Group’s retention and training issues went hand in hand, and Quinn says the business wasn’t taking a strategic approach to progression. The typical hierarchy of a KFC restaurant has the area manager at the top, followed by restaurant managers, assistant managers, supervisors and team members. At Retzos Group, everyone below the first tier needed a clear progression plan because, as it stood, there was little planning around this.
“It was like, ‘That person has the ability to do the hours? Great, give them the job,’” says Quinn. “But they often didn’t have the ability. This is what caused our retention issues. The person who accepted the role couldn’t cope. They didn’t have the experience, the training and development, or the support they required, to succeed. So they would leave.
“The cost of losing just one key employee, according to management consulting firm Korn Ferry (formerly the Hay Group), exceeds 60 per cent of the departed employee’s annual salary. Quinn estimated that in 2018, Retzos Group had lost up to $950,000 in retention costs.
“That’s factoring in things like job advertising, interviewing, orientations, training, compensation during training and lost productivity.”
This was an alarm bell Quinn was determined to answer.
“The strategy was to go back to the beginning and understand what kind of development plans could be put in place to identify the right people coming through the business and support them to move up in the business.”
Training and development
Quinn looked to other businesses who’d been in similar situations and analysed their strategies. US retail giant Walmart offered a perfect model. In 1990, it had a massive 70 per cent turnover rate. Its solution was recruitment training for managers and making sure managers were part of the onboarding of new staff members.
To get the ball rolling on a similar strategy, Retzos Group created a new position, a training development manager. Part of this role was to appoint area trainers into each region.
“The area trainers are existing restaurant managers who still have a normal day to day job with the company. But two or three days a month, they go out to other restaurants in their area to support and develop the younger assistant managers.
“Not only did we improve the development of our assistant managers, but it also helped in developing the restaurant managers. And now those restaurant managers are able to progress to an area manager role.”
Crucial to the success of the overall strategy was the implementation of a new resource. The company developed a 360 culture development tool that was used by everyone in the business, from top to bottom. It allowed all employees to take an active role in their own development. Through the data gathered by this tool, Retzos Group was able to develop individualised development plans for all staff. Quinn says this had the most significant impact in improving retention rates across the business.
“Anyone can create a culture and development tool, but it’s what you do with it afterwards that really matters.”
This focus on data wasn’t limited to the culture tool. The strategy called for existing sources of data to receive greater attention. This meant really listening to, and then recording, the comments made in exit interviews.
Quinn and his team also conducted a simple survey for assistant managers, at zero cost to the business. They asked questions such as, Do you feel you have the systems and tools necessary to do your job? Do you feel you had enough training and development to do your role? And, Do you feel the workload distributed across the management team is fair?
“We did this because we were losing more assistants than restaurant managers. So we asked them to rate their work-life balance based on their management-rostering system. We wanted to know if they felt recognised for the work they did and then asked them to rate their happiness in their current role.”
From the survey results, Quinn was able to see there was an uneven workload distribution. This wasn’t something they’d tracked before but the remedy was simple.
“We were able to quickly change the rosters. We now track who does nights, weekends, days, closing shifts and the ‘unsociable’ shifts, such as Saturday nights. Now we have a rotating roster that’s fair to everyone in the organisation.
This new workforce management strategy, based on the Korn Ferry research, will save the business a projected $210,000 in turnover costs across 2019. Restaurant manager turnover has reduced from 14 to 10 per cent, and assistant manager turnover has dropped from 24 to 16 per cent.
The strategy has been a success, but Quinn doesn’t want to give the impression that the 30-week project was solely responsible for the increased retention rates. The growth strategy was in its development stages before Quinn began the project. Also, its results were enhanced by the implementation of various culture development tools. The advantage of the AHRI certification program was the structure it gave the process.
A big lesson Quinn took from this experience was the importance of rigorous workforce planning and structure. “I used a Gantt chart, and I used it effectively. It’s a time-and-action chart which tells you at which point you have to do specific tasks, from week one to week 30.”
Another key takeaway was managing stakeholder expectations.
“As results were improving, the expectations got higher, and ended up going beyond our original goal. Some people expected those rates to keep rising. I had to keep managing that by saying, ‘Remember what our original goal was. Remember where we’ve come from.’
“With projects like this, there’s a natural burst of improvement, and then it will slow down and you’ll start to get more consistency across retention,” says Quinn.
His final piece of advice to anyone considering a business change is to not to be short-term in your thinking. The bigger the change, the more important it is to give yourself the time to get it right.
This article originally appeared in the November 2019 edition of HRM magazine.