Fazoli's Italian Restaurants of Lexington, Kentucky, USA, won the 2012 Gold Stevie® Award for Human Resources Department of the Year in the HR awards categories of The 2012 American Business Awards, the premier business awards competition in the U.S.A. (The entry deadline for the 2013 ABAs is March 27, request your entry kit here and it will be emailed to you right away.) Here we look at the human resources awards winner's progressive and innovative practices which helped lead to an annualized savings of $2,192,000.
Fazoli’s is one of the largest quick-service Italian restaurant chains in the United States, and because catering is such a people-driven industry, its HR department plays a vital role in the company’s success. Its four Associates have a combined 51 years’ experience with the company, and 59 years of total HR experience. The department provides HR support to nearly 5,000 Associates in 127 company-owned and 93 franchised locations in 26 states.
In 2011, Fazoli’s HR department, led by Vice President of HR Dave Craig, was instrumental in propelling the brand to its best sales and profit performance in over a decade. A 39% reduction in Associate turnover resulted in annualized savings of $2,192,000, while a relentless focus on “Right People, Right Places, Right Now!” contributed to an 18-month streak of same-store sales growth, despite challenging economic conditions.
Tools of the Trade
According to Craig, there were five elements that contributed to this success:
- Implementation of PeopleAnswers®, an automated pre-employment application, assessment, and background check solution. Said Craig: “The PeopleAnswers (PA) program raises the bar on the quality of new Associates and provides our hiring managers with insight on whether to deploy new Associates in service or non-service positions. The hospitality industry is heavily dependent on the ability of front-line service workers—usually paid at or near minimum wage in a high stress, high turnover environment —to win and keep customers. Managers needed a reliable and predictive instrument to ensure top quality Associates are hired and deployed according to their unique talents and abilities.” According to Craig, the PA system also enhances the efficiency of hiring and selection processes, saving hiring managers an average of eight hours per month, per restaurant.
- Implementation of SilkRoad’s RedCarpet program, featuring automated on-boarding, orientation, and electronic employment records archiving. According to Craig: “As a company that regularly acquires new talent, this solution standardized new Associate on-boarding and orientation processes, and automated the new hire administrative workflow. I calculate that ROI has exceeded 3:1.”
- Implementation of EBix®, an employee benefits and claims processing solution. Commented Craig: “EBix has eliminated paper enrollment and shifted our HR focus from manual benefits administration to proactive marketing and educating on essential benefits information.”
- Development of a best-in-class GREAT GUEST SERVICE index, combining several workforce matrixes to create one combined customer service metric. Says Craig: “This Index is used by Operations to predict customer service levels by location and to prioritize management focus accordingly. As a result, customer complaints have decreased by 39%. The Index has also revealed that our higher-scoring restaurants achieved 54% more incremental sales than lower-scoring restaurants.”
- Completion of a 3-year Associate Engagement study. According to Craig, this study revealed a direct correlation between engagement, sales, and profit. Every point of enhanced Associate engagement equals $12,539 incremental sales and $21,446 additional profit annually per location.
Delivering an Outstanding Customer Experience
These HR results were all part of the department’s 5-year plan, which was developed when Fazoli’s was acquired by Sun Capital Partners in 2006. The plan centered on adding enterprise value through enhanced customer service, and increased sales and profits via measurable enhancements to human capital.
“Fazoli’s pursuit of excellence is more than a slogan, it’s a mandate. The Stevie Award recognizes the critical role human resources management plays in our success,” said Carl Howard, president and CEO. “Recruiting and retaining the right people for both restaurants and support departments enables Fazoli’s to deliver our guests an outstanding experience. I am very proud that our human resources department, led by Dave Craig, was selected for this prestigious award.”
About Dave Craig:
Vice President of HR Dave Craig has been an HR practitioner in the restaurant industry since 1986, including the past 17 years with Fazoli's. Craig’s HR team has been nationally recognized for excellence in human resources programs and practices, and in addition to the Stevie Award was a Finalist in the 2010 National Restaurant Association's SPIRIT Awards
Craig is a graduate of Ohio University. He has also earned certifications as a Senior Professional, Human Resources and a Certified Fraud Examiner.
About Fazoli’s:
An American family favorite for more than 20 years, Fazoli’s is a leading, next generation QSR franchise opportunity. With a premium menu of freshly prepared Italian entrees, Submarinos sandwiches, and salads; a new service style featuring table service; and a contemporary new restaurant design, Fazoli’s is well positioned for growth. Already America’s largest Italian quick-service chain with more than 220 restaurants, Fazoli’s is expanding in select markets throughout the country. Founded in Lexington, Ky. in 1988, Fazoli’s was acquired by Sun Capital Partners in 2006.
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