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Noodles & Company sees retention boost after adding employee benefits

The fast-casual chain released its first impact report Thursday, noting that both management turnover and hourly employee turnover have decreased.
Noodles & Company
Photograph: Shutterstock

Noodles & Company has invested $7.6 million in new employee benefits since the beginning of the pandemic, and the fast casual is beginning to see a payoff in retention as well as in the diversity of its workforce.

That’s according to the 450-unit chain’s first-ever impact report, released Thursday, detailing the company’s efforts regarding hiring, the environment, community engagement and more.

The chain is now seeing 35% management turnover each year, compared to 43% in 2018. And hourly employee turnover has decreased from 155% in 2017 to 128% today.

Nevertheless, Noodles has had some major staffing shortages that have forced it to reduce store hours in restaurants across its system, the chain told analysts earlier this week. It expects those shortfalls to continue into Q4.

“Total revenue during the third quarter was partially offset by both temporarily closed restaurants and reduced restaurant hours, driven predominantly by industrywide labor shortages,” CFO Carl Lukach told analysts.

Noodles offers up a long list of recent compensation and benefits boosts in its impact report. Chief among them: Raising average hourly wages to $15, handing out up to $500 per employee in COVID “thank you” bonuses, instant pay for all and a focus on pay equity.

“Additionally, we have eliminated many time-consuming tasks executed in our restaurants, some on a temporary basis and others that we believe will make our restaurants more efficient both in the short and long-term,” the chain said in a statement.

In September of 2000, the chain formed its first Inclusion & Diversity Advisory Council.

“And while we’ve made strong progress, we understand there is more work to be done and we are dedicated to building a more racially diverse team,” the chain said in its report.

As of last month, 43% of Noodles’ workforce are people of color. One-third of leaders—assistant general managers through operations VP positions—are people of color. And 44% of the operations team are people of color, the chain said.

Women make up half of the company’s executive team, 56% of the operations team and 53% of the central support office.

 

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