Turnover rates for hourly employees at Outback Steakhouse range from 40 to 60percent annually. That’s impressive in an industry where rates of 200 percentaren’t uncommon, says Paul Avery, president of Outback Steakhouse. Heattributes the low rates to a customized pre-employment assessment testing toolused by the hiring managers at all of the 700 restaurants in the chain.
Outback instituted pre-employment testing in 1991, two years after thecompany was launched. When the company was smaller, it was easier to hire peopleon the basis of interviews, Avery says. But as the chain grew, it became morecritical to control turnover and to understand and build profiles for exactlythe kind of people they were looking for.
"Our people exude fun. They are spirited and gregarious, and they are teamplayers," Avery says. Outback’s culture is also big on volunteerism andindulging customers beyond what is normally expected. "People come to ourrestaurants for the experience. It’s not uncommon for customers to say theywere blown away because an Outbacker made a significant impression on them."
"This helps us find out how they will treat customers."
To create that sort of atmosphere, Outback has to hire people with specificcharacter traits. They must be sympathetic, adaptable, highly social, andmeticulous, Avery says. To narrow the search for these candidates, Outbackmanagers tested all of the existing Outback hourly employees with apersonality-assessment tool from DeCotiis Erhard. Using the data they compiled,they created a new test specifically designed for hiring people who fit theOutback Steakhouse culture.
The test, which is part of a three-phase interview process, helps recruitersidentify people with personalities and skill sets to fit that mold. "There’snever a shortage of candidates," Avery says. "The test isolates who amongthem is the most competent. We can’t unearth those qualities through interviewquestions."
Candidates’ results are compared to the group profile for Outbackemployees. If they rate below certain levels on important traits such ascompassion and initiative, they are cut from consideration.
Candidates that fit the profile are then interviewed by two managers, who aska series of behavioral questions such as, "What would you do if a customerasked for a side dish we don’t have on the menu?"
"This helps us find out how they will treat customers," Avery says.
Assuming that managers adhere to the cut score, the probability of success isconsiderable. It’s not uncommon for hourly employees to be with the companyfor six or more years, and 95 percent of Outback’s management were internallypromoted from hourly staff jobs. "When you hire people who fit your culture,they enjoy working for you and they want to stay."
When a restaurant doesn’t use the tool, however, turnover rates go up. "Whenapplicants are hired whose scores fall outside the range of the team profile,they have a 75 percent failure rate," says David Hyatt, customer leader atDeCotiis Erhard.
And turnover isn’t just apparent among the bad hires. It affects the entirestaff. "They become a cancer in the system," Avery says. Fortunately, mostmanagers see the value of the tools and use them consistently. "We’ve usedthese tests for 14 years, and I’m always proud to present our turnover ratesto the board of directors."
Workforce, April 2002, p. 69 -- Subscribe Now!