What the Brooklyn Nets Have in Common with the Restaurant Industry
Whether you’re a Nets fan or a Panera fan, you can probably guess what the two have in common. Unemployment rates are as low as 3.7 percent, the lowest they’ve been since the 60’s. Companies (in particular, ones heavily dependent on customer centricity) aren’t necessarily struggling to recruit employees as much as they’re struggling to retain them. As it is, companies are struggling to upskill employees for the new, automation-driven market. Losing existing top talent sends them back to square one, adversely impacting the CX in the short-term as they struggle to train replacements for the long-term.
Taking a look at the restaurant industry, “turnover is 130%, turning over more than a full workforce every year,” said Panera bread CFO Michael Bufano at CNBC’s @Work Human Capital + Finance conference in July. “We are a little under 100%, but still a huge number,” with almost a guaranteed chance that any given Panera customer service agent will quit or be fired within a year (and potentially their replacement… within the same year).
A Kevin Durant-caliber player cannot win the NBA Championship by himself, and it takes more than an all-star CXO to elevate the experience. Customer contact, to an even greater extent than professional basketball, is a team endeavor; talent retention cannot just be about the top 10%. Companies need to look after frontline agents, regional directors and functional supervisors in order to keep their team or organization running smoothly. Retaining talent is about delivering on employee expectations—creating an atmosphere that produces wins through clear objectives, regular feedback, strong coaching practices, and synergistic chemistry. But most organizations aren’t doing it. Take it from Mark Cuban.
“This reality has changed what it is like to be an employer. In the past the default was that the best employees would want a long career with their employers, because that is what you did. You kept your job as long as you could. No longer… It is important to give them reasons to want to stay.” Furthermore, this concept applies even more so to the most valuable employees.
As Cuban says, “Great employees are effectively always free agents with the ability to move anywhere.”
Although Panera is only one small example of high customer service agent turn over, the rates are becoming increasingly costly norms that have a spiraling effect on the rest of the industry. The average cost of a restaurant meal increased 2.4% in the last 12 months, according to NPD data, more than the rate of inflation and cost of a grocery basket. The rising cost puts pressure on restaurant operators. According to David Portalatin, NPD Group vice president and food industry advisor, “making customer interactions ‘frictionless’ and automating repetitive tasks in the kitchen would theoretically allow restaurants to be more efficient with labor.” Now the question remains, how?