REELEY (AP) – In the past three months, the franchiser of Greeley’s two Qdoba restaurants has been banking on a lofty experiment in management.
Could boosting employees’ pay by $2 per hour keep staffing stable while creating a better customer experience?
The answer, after the past 90 days, would be a resounding yes, said Bill Nelson, director of operations for Q Investments, which has 17 restaurants in the franchise. Greeley was the test market for the experiment.
“It was a success, and we are going to continue to do it,” Nelson said. “It’s been fantastic. The attitude of employees has been fantastic. The service has been better and turnover has been lower. It’s been a win-win for everybody.”
That $1,800-$2,000-per-month gamble will now become a $500,000 annual hit to the bottom line for the company. Nelson said based on Greeley restaurants’ success, the company will roll out raises for employees at all of its restaurants, which includes 14 in northern Colorado, two in Wyoming and one in Nebraska.
It wasn’t as simple as a request for better service to their customers. The company boosted hourly wages to $11 per hour, bringing employees above most other minimum-wage level employees across the city.
But the crews had to work for it. They needed to show up to work on time; if they had to take a day off, they were in charge of finding someone to work for them. They needed to work as a team.
“They knew up front what they had to do,” Nelson said. “It got to the point where during the test, the employees were policing themselves.”
Management used sales, of course, and customer surveys, as well as absenteeism as the barometers for this experiment.
Customer surveys in Greeley already are improving, Nelson said. He said it would be a good six months to a year to determine how actual sales figures were responding.
And managers finally get the chance to relax in their time off rather than make frequent trips back to the restaurants to solve problems. Nelson said a regional manager who covers six stores in the area remarked that the two Greeley stores no longer need much oversight.
“He said, ‘I don’t have six stores anymore, I have four,”’ Nelson said. “And both (Greeley) managers have said their jobs have never been easier.”
Where they used to get maybe 10 applications for employment each week, they now have folders 2 inches thick of those wanting to don the blue visors and roll burritos. The stores have only lost one employee during the entire experiment window.
The whole point, of course, was to take care of people on the front end and see if they would respond in kind.
“The employees are happy to be here. They’re excited to be here. It’s a whole different atmosphere,” said Nickiey Gallegos, general manager for the Qdoba at 2527 11th Ave. in Greeley. “I think it can only go up. I see every week it’s more positive. They’re more excited to be here, and the customer service is amazing.
“I think every restaurant should do it. It’s amazing.”
The program comes in the middle of a nationwide debate on minimum wages; some fast-food workers on the East Coast, for example, have lobbied for $15 per hour.
Nelson said that kind of an increase is a bit extreme, and not the statement his company franchiser, Steve Lauer, is trying to make.
“Typically, what happens is that minimum wages go up every year, and restaurants will just raise their prices to cover that cost,” Nelson said.
“We took a price increase around October 2014, and we’re just going to accept that this will be a little bit of a higher cost. But there are the intangibles you can’t measure, such as time spent on training, uniforms being lost, that type of thing.
“We know that over time with better service, you see better sales. . We’ll lose a little profit, but it will make us stronger.”
The company will roll the program out to its remaining 15 stores by March, Nelson said. Nelson has been approached by other Qdoba franchisers curious about the program’s success, even Qdoba corporate. He’s preparing a report for corporate leaders this week.
But this won’t be the last of it. Nelson knows they could face complacency among the ranks as time goes on. That’s why they’re working on a plan to institute profit-sharing of some sort to employees whose stores meet specific goals in the future.
“There will be some additional reward for achieving sales goals, and some will go back to the employees,” Nelson said. “That’s our intention.”
