Buca di Beppo combats restaurant industry workforce shortages by regarding employees like family
Wallace Doolin's appearance on stage is cool and polished and yet highly approachable as he informs an audience of peers that the workforce shortage facing the restaurant industry is no longer impending - it's arrived.
Fifty Nine-year old Doolin is chairman and CEO of Buca, Inc., the parent company of family-style Italian eatery Buca di Beppo (headquartered in Minneapolis with 93 locations in 24 states and the District of Columbia). He recently presented a session on workforce intelligence at HT's Restaurant Executive Summit in Key Biscayne, Florida. Given Doolin's 35 years of industry experience, his highly approachable demeanor, and his passion for a positive workplace culture (for Doolin, employees are like family) there was no better choice than he for the presentation, nor for the top executive role at Buca, Inc.
Doolin's past accomplishments include 13 years of executive-level positions with Carlson Restaurants Worldwide and TGI Friday's, subsidiaries of Carlson Companies, Inc., including the position of CEO from 1994 to 2002. Since joining Buca, Inc. in November 2004, Doolin's been focused on moving the company beyond an executive shakeup in May of that year which involved fraud allegations against four former executives. With an entirely new management team in place, Doolin set goals for a financial turnaround to bring the company from red to black, and placed a focus on renewing faith in the Buca brand, from the inside out. Both initiatives are works in progress - though many gains have already been made. The company recently reported its eighth consecutive quarter of positive comparable restaurant sales in Q3 2006, and continues its focus on fostering a positive, familial-like culture for its employees.
"It's my fundamental belief that the only way to improve the performance of a company is to improve the performance of the people in the company," Doolin tells HT in an exclusive interview. "If you have someone who's really good in your organization, they can also go work anywhere, so you have to show an appreciation for that talent - attract it, retain it and develop that talent to its full potential."
Accomplishing this task, however - for Buca and the entire restaurant industry - is complicated by a shrinking workforce, and the challenges associated with retaining personnel.
Workforce then and now
In the past, an abundant, easily affordable workforce helped facilitate a company's growth. Today, however, "there's an age wave that's moving through our industry," explains Doolin. By 2012, the U.S. department of labor estimates that there will be 165 million jobs in America but only 162 million people to fill those jobs. What's more, due to the aging population, 19 percent of the workforce - nearly 1 in 5 people - will be age 55 and older. The restaurant industry traditionally hires 18 to 24 year olds. "They are the crux of our workforce," notes Doolin. "As they become less available to us, it will be increasingly difficult to stay staffed."
Doolin also points to a shift in the workforce's overall ethnicity, which will required a change in the way employers recruit, promote and retain personnel. The fastest growing population of the available pool is Hispanic, for example. Research from
People Report shows a direct relationship between an increase in the number of Hispanic managers employed across a restaurant's chain and a decrease in the turnover rate of hourly-compensated employees. Companies must be prepared to offer the tools necessary to move an ethnically diverse staff into management positions, Doolin asserts, to keep pace with the changing demographic.
Intelligence beyond turnover
Understanding how demographic and other factors impact a restaurant's employed population is the crux of workforce intelligence, and a passion for Doolin. "The whole notion of benchmarking and having credible information to make decisions has been a quest of mine forever," he admits. "In the workforce component, one of the things that struck me years ago was that we didn't have a lot of data to manage by; just turnover. My turnover was going down by 2 percent, but is that good? Compared to what?"
For Buca di Beppo, workforce intelligence goes beyond turnover to look at staffing and vacancy rates, the cost of replacing personnel, and the costs associated with training personnel to be fully operational.
Buca uses a manager replacement calculation that takes into consideration the manager's salary and the average training time for a new hire (10 to 12 weeks). According to that methodology, approximately 20 percent of the manager's annual salary is spent in training. With an industry average salary of $38,000 annually for restaurant managers, coupled with the average cost to process a new hire (say $1,500 to $3,000) the cost of loosing an employee to another opportunity can quickly reach $10,000 or more.
That figure is for just one management-level employee. When compared to a company's overall turnover rate, it quickly supports why it's essential to keep talented personnel. But how?
"Any research I've seen on why people leave a company starts with their supervisor," says Doolin. This further stresses the importance of having leadership that is skilled at working with a multi-ethnic and varying age-group employee base. Beyond that, the key to retaining personnel, says Doolin, is accomplished through offering developmental programs that give employees the life and job skills they need. "To the extent that you can get these two things right, you can create loyal employees," he says, and loyalty is as good as gold.
Armed with this knowledge, Doolin set out to foster the positive, familial-like culture for Buca, Inc.
He describes the company's current culture as in a state of transition, but moving in the right direction. "We're moving from a culture that was a little undisciplined and didn't have a whole lot of sophisticated processes and tools, but one that had a lot of heart, spirit and passion," he explains. "We want to keep that passion and entrepreneurial spirit, but with a more disciplined approach." Under Doolin's leadership, the company is putting several new systems in place that will help add structure - such as the TMx labor and time scheduling system from TimeManagement Corporation (timemgmt.com). The company is also rolling out a back-office system from Eatec Corporation (eatec.com) in the coming 12 months.
But more than that, the company's core principals and values - justice, hospitality and excellence - help foster a positive culture (see Family Tree on page 14). "We make sure that the process of developing these principals and values is an on-going process and isn't just a check-off on a list of things accomplished," says Doolin.
Employees are regarded as family members - part of una famiglia. Human resources are re-dubbed family resources, and restaurant general managers are known as Paisano Partners. Each restaurant has a family meal before the evening shift begins, and employees are invited to attend with their own friends and family.
Though all locations are company-owned, Buca employs a unique approach to help its staff become vested in the company's success. Paisano Partners are invited to invest a sum of money, usually between $10,000 and $20,000, to become partners and are rewarded on a share of the returns from their individual restaurants. Similar investment opportunities are available to restaurant chefs.
For continuing education, the company offers Buca U., a seven-day management and leadership development course. The classes accentuate the changes and challenges associated with running a restaurant today versus 10 to 15 years ago. "Today we're managing four generations of employees that are multi-cultural and multi-lingual. Most senior leaders didn't face that in previous generations. The progressive operators that will run the best businesses are going to be more involved in helping people develop life skills, not just job skills."
But at the end of the day, for Doolin and Buca di Beppo, it's family that matters. "In its purest sense, when I look at hospitality, the number one principal is family. If we treat our employees as family, they treat our guests in a better way than if they were viewed as just an employee."