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Great Things Are Starting at Yum

October 29, 2003
Related Topics: Candidate Sourcing, Motivating Employees, Featured Article, Staffing Management
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As the band roams the hallways at Yum, employees grab noisemakers and fall in behind the tuba, saxophones, trumpets and bass guitar. The crowd grows larger as employees abandon their work, jumping up from their desks to see where the band goes.

    The Random Acts of Recognition Band plays songs you’d hear at a pep rally, except when the crowd would normally yell, "Fight, fight, fight," employees shout, "We are here to recognize you." By the time the band stops at the Customer Maniac of the Month’s desk, there are as many as 50 to 100 employees gathered round. The band then gives the chosen employee a card, award or gift certificate.

    Yum--the parent company to fast-food chains Taco Bell, KFC, Pizza Hut, A&W and Long John Silver’s--has spent a lot of energy branding the company as a great place to work. Its motto, in fact, is "Great things start here." But the company acknowledges that an employment brand doesn’t mean anything if it doesn’t match the experience of employees.

    Along with investing in an employment brand, Yum began investing heavily in employee training. The company now offers quarterly training and is on its way to training 725,000 employees in Yum’s Customer Mania program, which in part empowers frontline employees to resolve customer disputes. The whole program is centered on listening to customers, and it recognizes employees who go the extra mile in the name of customer service. "The No. 1 or 2 reason why people leave companies is that they don’t feel recognized," says Jenny Bean, employment marketing manager at Yum! Brands Inc.

    Another component of an employment brand is how much employees actually trust the company for which they work, says Mike Temkin, vice president of strategic planning and development at Shaker Recruitment Advertising & Communications. He notes that Watson Wyatt evaluates an employment brand by its share performance. Companies with high employee trust levels outperform companies with low trust levels by 186 percent. Temkin says that an employment brand is more than posters or videos. It’s about maintaining a strong line of communication within a company to secure that trust.

    Judging by Yum’s share performance, its employment-branding efforts are working. When Yum reported its third-quarter earnings on October 7, CEO David Novack said that he was increasing 2003 earnings-per-share guidance to $2.03 before special items and that looking ahead to 2004, he was confident that Yum would continue to deliver its goal of at least 10 percent growth in EPS.

Can’t fake it
    Good employment brands start from inside a corporation, says Christine Johnson, director of employee communications services at Shaker. The way to do that is to figure out what story a company’s employees have to tell. "You can’t make something up," says Johnson. "If it doesn’t reflect the organization as it exists, the company will have high turnover."

    "Our employment branding isn’t just to bring people in the door; it’s a message we use every time we touch our employees," says Yum’s Bean. The message, "Great things start here," appears on benefits materials, orientation materials and the company’s Web site, on job-posting communications and job applications, and all over store walls. The message that Yum is trying to convey is that the company has been the start of great things for many people.

    To create the branding campaign, Yum went to its employees and listened to what they had to say about the company. What they found was that the company brings upward mobility to many people. Some employees start as team members and work their way up to managing restaurants; others work their way through school using the tuition-reimbursement program.

    With employment branding, the devil is often in the details. A percentage of job applicants will decide to work at a particular fast-food restaurant because as customers they like the environment. Bean didn’t want to then lose those people because the collateral material didn’t reinforce that store quality. So she upped the quality and quantity of point-of-purchase materials such as posters and job applications. She grew the number of hires from point-of-purchase materials from 3 percent to 12 in just over two years.

    All of the creative output comes from Bean’s employment marketing group. They designed an intranet site that is used to share all of the files and materials with the various brands and franchisees around the country. Templates for classified ads, posters and job postings go on that site so she can control the graphic standards for Yum’s employment advertising across the country.

Sending the message
    Employment branding, retention and company performance are inextricably linked. Yum first began to pay close attention to this connection—especially with regard to branding--in 1999, when the labor market was tight. The company took the unusual step of hiring an employment-marketing manager to act as a sort of gatekeeper for its employment brand. It hoped not only to attract workers but also to retain the ones it already had.

    "Regularly communicating with employees, whether it’s quarterly or annually, and recognizing individuals, whether it’s a birthday or an anniversary, shows a return on that investment," says Teresa Siriani, president of People Report, a consulting firm that specializes in workforce-management metrics, trends and best practices for the food-service industry. Communications that come from senior management to hourly employees can help reduce turnover by 10 to 15 percent, she says.

    Yum operates headquarters--or restaurant support centers, as it calls them--in various cities for each brand. Each restaurant support center recognizes employees in its own way. In many of the offices, for instance, employees fill out "walk the talk" cards that give recognition to a coworker who has done something great. These are posted in cases near the elevators, so people can read them while they’re waiting. Every so often, these cards will be put into a bin, and one is drawn. That’s when the band pays a visit to that colleague at Yum headquarters in Louisville, Kentucky. At Taco Bell’s headquarters, a colorfully dressed woman wearing striped socks pays visits to colleagues on a scooter, handing out awards.

    "Yum is moving in the right direction," says Rick Garlick, Ph.D., director of strategic consulting at Maritz Research Hospitality. Given the high turnover in the fast-food industry, the challenge is having employment branding be about more than putting up placards in stores. An employment brand is successful if employees exhibit energy, commitment and competence, says Garlick. For that to happen, companies have to invest in training, which Yum has done.

Retention’s effect on sales
    The declining turnover rates at Taco Bell indicate that employees are beginning to feel energy around the Yum brand. In 2000, the turnover rate for hourly workers at Taco Bell was up near 200 percent. By the second quarter of 2003, the turnover rate had dropped to 98 percent, when the fast-food industry average for hourly workers is 120 percent.

    Retention also is reflected in the bottom line. At Taco Bell, the stores in the top 20 percent for employee retention had double the sales and were 55 percent more profitable than those in the bottom 20 percent, wrote James Heskett, Earl Sasser and Leonard Schlesinger in a 1997 book titled The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value.

    As Yum has lowered the turnover rate among hourly employees, it has also delivered better service to customers. Taco Bell recently ranked second in an annual study on drive-thru effectiveness conducted by QSR magazine. Two years ago, Taco Bell ranked 14th.

    Although employment branding is important, it isn’t the silver bullet that will cure whatever ails a corporation. "Many organizations worldwide believe the way to keep people is to conduct internal programs such as employee appreciation, employee of the month and themed lunches," says Dick Finnegan, chief client services officer at TalentKeepers, a provider of employee-retention solutions to corporations. But, he says, "it won’t work if employees report every day to someone they don’t respect or trust."

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