5 secrets to industry-leading staff retention rates

In 36 years with Pal’s Sudden Service, CEO Thom Crosby has lost only seven general managers across 26 locations in Tennessee and Virginia. The executive suspected that January’s numbers would show about a 3% turnover rate for the month across all levels of employees, a strong follow-up to its 21% turnover rate for all of 2017. Unfortunately, Crosby says there’s no magic lever restaurants can pull to reduce turnover—trust us, Restaurant Business asked. Instead, he swears by the following processes, which keep workers coming back for more, even after they’ve moved on from the quick-service chain. 

The first step in Pal's interview process is a pre-employment survey created in conjunction with a professor at Eastern Tennessee State and another from the University of Virginia. The test helps the chain understand the likelihood that a candidate would be happy there and helps employees know what the brand is looking for, Crosby says. For instance, the chain places strong value on promptness, so the test asks candidates six questions about their punctuality. “We can tell them [they're] expected to be punctual and give distinct examples in the interview,” he says.

Pal’s general managers aren’t likely to be found scanning spreadsheets in the back office. Instead, associate managers take on many of the administrative duties, freeing up GMs to give every new hire their first training session. The quick-service chain adopts a training methodology developed by the United States Department of War to get new manufacturing workers up to speed during World War II, called Training Within Industry. As part of the system, general managers tell employees what they can expect on the floor, and then they go into the kitchen and show them what it feels like to be in the action, after which they are taken through a more formalized training. “It’s like we’ve taught you how to speak French, here’s this French manual,” Crosby says.

After staff members complete their training, they must score 100% on an exam reviewing what they’ve learned and certify that they have a grasp of the material with a practical exam. But that’s still not the end of the road for workers. Every day, managers recertify about one to two employees to ensure they are up to date on processes.

Those high standards are carried through to performance reviews three times a year. The company uses software that allows for a 360-degree review. Employees submit evaluations of their peers’ work, and workers are asked to review themselves. Afterwards, a general manager sits down and discusses the feedback with employees.

Pal’s is first and foremost an educational institution, Crosby says. Employees are involved in high-level discussions to soak up some business know-how. For instance, the chain is rolling out a patty melt with crispy fried onions, and Pal’s has looped all 1,200 workers into the expected usage of the product, advertising strategies and other related operational changes. When a change does occur, supervisors approach each worker armed with a card that lists the latest news. “Leadership will go and say, ‘Let me tell you what’s going on, how this will impact you and do you have any suggestions?’” he says. When the chain creates a model for rapid prototyping or data analysis, its teenage workforce is involved in those operations. “It’s no fun to play a game if you don’t know the score,” he says.

Self-sufficiency is another pillar of the Pal’s model. If the 16-year-old running the fryer decides they cannot hit the standard, they have the ability to shut down the process and say they’re not making hamburgers without question from management. “After the manager lets the customer know they cannot currently offer our products at our standards right now, then they go to the employee and ask how they can help get them back up to standard,” Crosby says.

Crosby is proud of the number of Pal’s employees who return to the chain. “At the exit interview, we tell them. ‘Here’s what you did for us, don’t forget about us if you want a career,’” he says. The CEO also hears from employees who share how their experience at Pal’s has helped them later on. In fact, he heard from so many Pal’s alumni that he decided to formalize the group. Now, past and current employees can interact on an internal communication software. “We thought, ‘Wouldn’t it be neat to start linking these people up,’” he says. “We’re telling you this information could be valuable. But it’s one thing if leadership tells you, and another thing to hear it from the people it’s actually benefiting.”