Unless a new hire’s long-term plans happen to include a career in Roller Derby, a job at one of Sonic’s drive-in restaurants—where carhops on roller skates race to deliver tater tots and limeades to car-bound customers—is probably just a temporary gig. All the same the chain’s CFO, Claudia San Pedro, would like the Oklahoma City-based company’s turnover to take a turn for the better.
In a growing economy, it makes sense for service-industry executives to focus more intently on keeping employees from taking the risk of leaving in search of landing a better opportunity. Among the members of Sonic’s roller-skating waitstaff, San Pedro reports, annual turnover hovers at around 175%. San Pedro, who became CFO last April, says the number is “still too high.” But, she adds, “We are continuing to work on it.”
Of late, fast-food workers at Sonic’s much larger rivals have held protests demanding that the minimum wage be increased to $15 an hour. Last year, revenues at the 3500-unit chain rose about 6.5%, to $175 million. (Burger giant McDonald’s, by contrast, swallowed $6.5 billion in 2014 sales.) A recent study conducted by researchers at Purdue University’s School of Hospitality and Tourism Management estimated, however, found that “limited-service restaurants” would boost their prices roughly 4.3% in response to such a wage increase.
Not that retaining employees necessarily means fattening their paychecks. San Pedro suggests that there are other ways companies like Sonic can try to tamp turnover. Such as:
- Employ a rigorous hiring process. Successful recruiting requires “taking time and being patient,” says San Pedro. “It means being very thoughtful and really understanding what you need in three areas: technical skill set, emotional intelligence and cultural fit. Even if it takes you longer, in the end it will lead to a lot less turnover and higher retention.” Among her favorite interview questions: How do you like to be managed? What are your favorite kinds of projects? Sonic wants problem-solvers who have positive attitudes, according to San Pedro.
- Provide a clear career path. Management, San Pedro admits, needs to do a better job “making sure that [employees] know that they can be engaged with the organization at a higher level. They need to know what they have to do in the next two or three years to qualify for advancement within the business.” She wants the company to be “more explicit about opportunities and expectations.”
- Boost benefits. At Sonic, the effort has translated into offering health coverage to anyone who works more than 30 hours a week, plus enabling employees to buy company stock at a discounted price. Today’s workers, says San Pedro, also don’t want to be tethered to working in the office all the time—nor are they willing to wait long to get promoted. “You have to pay attention to the quality of the work environment,” she adds. “You want it to be fun.”