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News for the Hospitality Executive


 Retaining Employees Now a Bigger Issue
 than Food Cost for Many Restaurateurs
By James D. Mcwilliams, The State, Columbia, S.C.
Knight Ridder/Tribune Business News

Sep. 11, 2005 - Wait tables for a year, and your boss might send you on a beach vacation.

Or work in the kitchen, and the restaurant owner might offer your dog medical benefits.

Those are just two examples of how restaurants in Columbia and the nation are coping with their No. 1 concern: recruiting and keeping workers.

Nationally, the restaurant industry -- known for its high turnover rate -- is in a bind. The industry is expanding faster than the number of workers available, and people look for more high-paying jobs as the economy heats up.

The issue of hiring and retention has replaced food prices as the top worry for restaurateurs, said Hudson Riehle, senior researcher at the National Restaurant Association.

In response, many local and national restaurants are offering new incentives -- such as insurance, raises, and trips -- to deal with competition for workers.

Sticky Fingers, which has 15 locations in the Carolinas, Florida and Tennessee, has hired a full-time "rewards director" in charge of doling out personalized perks to hard workers.

"It only takes one good employee to tell you they don't feel appreciated before you realize it's well worth just hiring someone to help us be more consistent (rewarding excellence)," said company owner Jeff Goldstein. Among the perks:

--Greenville workers who had been with Sticky Fingers a year were sent on three-day vacations to the beach in Charleston or a ski resort in North Carolina.

--Workers at a Columbia restaurant went to the Carowinds amusement park last autumn.

--Charleston workers were sent on a dinner-boat cruise.

Meanwhile, Darden Restaurants, owner of Red Lobster, Olive Garden and two other chains, has its perks.

The company offers medical benefits to both full-timers and part-timers, and even offers optional veterinarian benefits to workers' pets, said Joe Chabus, spokesman for the Florida-based company.

Competition for restaurant workers could be especially strong in South Carolina, because the dining industry is growing faster here than it is nationwide, Riehle said.

Industry revenue grew about 6.5 percent in South Carolina from 2003 to 2004, while the industry grew 5.3 percent nationally during the same period.

Total job growth statewide was flat in July, compared to a year earlier, but the number of job seekers dropped. In South Carolina, unemployment was 6.1 percent, down from 6.8 percent a year earlier. National unemployment -- which has trended down lately -- stayed unchanged at 5 percent.

For years, many S.C. restaurants did not give raises, and most did not offer benefits to their largest class of workers -- part-timers, said Tom Sponseller, president of the Hospitality Association of South Carolina, which represents 1,800 restaurants and hotels.

But purse strings are loosening at some restaurants.

This year, restaurants are giving unskilled workers 2 percent to 4 percent annual raises in South Carolina; giving skilled workers higher raises; and giving more people benefits, Sponseller said.

Corie Kenny, a 28-year-old Columbia cook at Sticky Fingers, said incentives inspire loyalty. He worked for at least seven other restaurants before Sticky Fingers.

"I'm the happiest I've been at a job," said Kenny, who is in management training. "They are easy with raises. They don't mind rewarding you for your work. ... I have health and dental benefits."

The restaurant has given him tickets to see professional basketball's San Antonio Spurs and Philadelphia 76ers.

The company even helped Kenny pay a household water bill. "I paid them back, but (they) didn't say I had to," Kenny said. "The manager said, 'Here you go. Take care of your business.' It was a blessing."

Rewarding workers has had three benefits at Sticky Fingers:

--Turnover at the 960-worker chain has dropped. Among salaried employees, turnover fell from 32 percent in 2003 to 29 percent in 2004, and among hourly employees, turnover fell from 59 percent to 58 percent in the same time. This year, the company expects even lower figures.

Prior to 2003, "we were so busy opening restaurants, we may have neglected some of what makes us a great place to work," Goldstein said.

-- Revenues and profits are up, Goldstein said, without giving dollar numbers.

-- Workers are eager to improve customer service, Kenny said. When large parties have wanted steak, which is not on the menu, workers have run to a store to buy some, he said. On rainy days, workers have rushed with umbrellas to greet guests.

"Their whole aim is to be legendary," Kenny said.

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To see more of The State, or to subscribe to the newspaper, go to http://www.thestate.com.

Copyright (c) 2005, The State, Columbia, S.C.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. DRI,

 
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