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Low-cost employee perks

Forget HMOs and flexible hours. When Glen Agritelley, owner of Mercy Wine Bar in Dallas, talks employee benefits he means cross country flights and free nights at vineyards. “It makes more of a difference than paying staff more,” says Agritelley, a former Microsoft executive who opened his wine bar three years ago.

But flying servers to Napa and Sonoma to swill wines and talk one-on-one with vineyard owners is as much a benefit to Agritelley, whose restaurant enjoys a 5 percent turnover rate. “The goal for me as an owner,” he says, “was to give my people the kind of experience where they could take it back and relate those stories to guests at their tables.”

Other restaurant owners must be feeling the same way. A December 2005 survey from The People Report, a Dallas-based performance improvement company for the restaurant industry, found that hourly employment benefit packages were getting more non-traditional and more robust, says Teresa Siriani, the group’s president. And for good reason. Restaurants offering more creative benefit plans have seen their turnover rates drop from 129 percent in 1999 to 99 percent today, according to the survey.

Fired Up Inc., a group of 75 restaurants in six states, offers tuition reimbursement. Servers who work at least 25 hours a week are eligible for $200 to $1,000 a semester for tuition and book costs. Those who major in hospitality qualify for the greatest reimbursements. The ultimate goal, says Vici Wilkerson, director of human resources for the Austin, Texas-based company, is to entice servers to enter the company’s management program. Some 35 percent already do so, though she couldn’t say how many of those had been participants in the reimbursement program, which costs the company around $10,000 a year. She says there is evidence that tuition reimbursements help to keep employees for longer periods of time—at least until they finish school.

To help retain workers with children, Diedrich Coffee Inc., in Irvine, California, offers pre-tax savings
programs for daycare that cost virtually nothing for restaurant owners. Diedrich’s program launched six years ago, says Matt Kimble, the company’s vice president of human resources. Only 25 employees out of 900 have opted into the program. But Kimble says the benefit gives them a competitive edge. “I think it’s one more thing we can offer that sets us apart.”

Which Wich, a chain of sandwich shops with seven locations in three states, is getting even more creative. Employee of the month winners get free Nike ID shoes, which they can design themselves with Which Wich colors. Does this keep workers at Which Wich longer? Founder and president Jeff Sinelli thinks so, mostly because it creates a strong culture. “Everyone does the basics” in benefits, says Sinelli, who spends more than $2,000 a year on Nike ID shoes. “Our turnover is so low that we don’t even keep track of it,” though he says it hovers below 10 percent.

Others are experimenting with—get this—benefits for pets, which can cost as little as $15 per pet per month. “The restaurant business is hectic and full of single people where their pet is their best friend. They work long days and they want their pet there to greet them” when they get home, says Bill Gorman, director of group sales for Veterinary Pet Insurance, a pet insurer in Brea, California. Sounds hokey, but some restaurant owners think such benefits make the difference.

Four years ago, Buca di Beppo, a 104-unit Italian chain, began offering hourly employees and managers pet insurance through petinsurance.com. The chain also offers a stock purchase plan to its employees, where staff can buy company stock at a 15 percent discount from its trading price. “Our turnover [between 70 and 80 percent] is consistently less than our peers,” says Jason Vollbrecht, benefits manager for the Minneapolis-based company.

“People are always saying, ‘What’s that silver bullet?’” for retaining employees, says Siriani. There may not be just one. But, she adds, in a highly competitive market benefits play a key role in retaining employees and making them more productive workers. “Our industry has gotten a bad rap for many years for how we’re just a high turnover industry where people are disposable,” she says. With additional benefits, “we can do something about that.”

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