While getting her doctorate in Organizational Behavior at New York University in the 1990s, Susan Reilly Salgado studied and wrote her dissertation on the success of famed restaurateur Danny Meyer — specifically, the secret sauce behind Meyer’s loyal restaurant staff.
Meyer, founder of such notable restaurants as the Gramercy Tavern and Shake Shack, had a reputation for being one of the best in the hospitality business. As a frequent diner at Meyer’s first restaurant, the legendary Union Square Cafe, Salgado could see the results: happy employees who stayed with the company for longer periods than typical restaurant staff, and outstanding service.
“I kept hearing stories from USC employees about how great the company was, that they loved coming to work. For me, these were key indicators of the culture of an organization,” says Salgado.
In 2010, Salgado’s research became the foundation for Hospitality Quotient (HQ), the organizational consulting arm of the Union Square Hospitality Group’s 12-restaurant, 2,000-employee empire. As co-founder and managing partner of HQ, Salgado has helped companies such as Merrill Lynch and Delta Airlines adapt Meyer’s hospitality style to their workplace.
“It’s amazing how easily the principles of hospitality translate to every single business out there,” says Salado. “When you create a great place to work, you can become a place that does great work.”
"Culture exists in any group of people — it just happens. The question is whether it’s actively managed or ad hoc."-Salgado says.
From her years of experience with HQ, Salgado knows what makes employees tick and what makes them stay in one of the toughest businesses with the highest employee turnover rates. According to the Bureau of Labor Statistics, employee turnover in the hospitality and leisure industry, which includes restaurants, was 73 percent in 2015. Compare that to industries with the second and third highest turnover rates—60.9 percent for the business/professional services industry and 56.1 percent for the construction industry in the same year—and it’s easy to see why what Salgado is doing is good for business. Here, Salgado details three steps to help keep employees and create a work environment that makes them want to stay.
1. Own Your Company Culture
“Culture exists in any group of people—it just happens. The question is whether it’s actively managed or ad hoc,” says Salgado.
Company culture isn’t casual jeans Fridays or a Ping Pong table in the break room. It’s your employees sharing beliefs, priorities and values, says Salgado. It’s a culture of hospitality among employees, and hiring and keeping good employees starts and ends with that culture, Salgado says. The first step? Zero in on what’s important to your employees.
The basic values and perks Salgado hears about most often from employees: good benefits, a fair paid time-off policy, a schedule employees can balance with their personal lives, flexible time and the ability to work remotely. Salgado says they’re as important as being paid a good hourly wage or salary for most employees.
“What contributes to creating a culture of hospitality is when they have all of these things, on top of feeling valued and appreciated at work, and that their work has a sense of purpose,” says Salgado.
Leaders also have to make the ideals of their culture clear by continually giving critical and positive feedback, says Salgado. “It has to be part of a leader’s objective to set expectations; to tell employees how and what you want done,” she says. “Employees want to know how they’re doing, and this should happen all the time, both positive and constructive.”
Salgado uses a benign example to illustrate the point: nail tapping. “Say you tap your nails on the desk and everyone’s getting more and more annoyed but no one tells you. You’ll keep doing it because you don’t know,” says Salgado. It’s up to a leader to give immediate feedback to keep a tic—whether it’s nail tapping or writing disorganized reports—from festering into something bigger that could have an impact on good company culture.
“We have a thing we say around HQ: the behavior you ignore is the behavior you condone,” says Salgado.
Leaders also need the skills to deliver good feedback on an ongoing basis, says Salgado. “Say, ‘I’m telling you this because I want you to be successful’,” suggests Salgado. “If I wanted to tell you about tapping your nails on the desk, I’d say, ‘This might sound crazy or petty, but can you stop tapping your nails on the desk? It’s driving me crazy!’ If I acknowledge the petty part, it opens you up to the feedback.”
2. Set a Clear, Simple Mission
“Our mission in our restaurants: create raves for our guests,” says Salgado. “We tell our teams that’s the shared mission—in every interaction, with every stakeholder, our goal is to create raves. It gives the team a common purpose to work toward.”
Salgado offers a typical example from the restaurant world: When a guest asks for a substitution on a dish, and the server asks the kitchen to make an accommodation, the entire team must come together to make it work. If the kitchen responds with anger or frustration, or yells at the server, Salgado says, it’s nearly impossible for the server to go back out into the dining room and provide genuinely warm and caring experiences for their guests.
The same ideas apply to any industry, says Salgado, offering the healthcare industry as another example. When a healthcare team understands their shared goal is to create remarkable patient experiences, it means the whole team—from building security to the clinical staff to the administrative staff handling billing and appointments—must all work together to create a consistent and authentically caring experience for the patient.
“Your whole team must have a common mission of taking care of each other and working toward that common goal,” says Salgado. “It’s about being on the other person’s side. It’s about taking care of the other person in every interaction.” It’s one of the key reasons Meyer’s restaurant employees remain for years, sometimes decades. “If I’m in hurry and have a deadline and you say, ‘Your emergency isn’t my problem,’ we’re not taking care of each other, and that breaks down teamwork,” she says.
3. Hire 51%ers
Salgado describes 51%ers as people who lean slightly more toward emotional intelligence than job skills on a 100-point scale. They are optimistic, warm, self-aware in how they come across to other people, and empathetic—they can put themselves in another person’s shoes and be on their side.
Work ethic is another key trait, says Salgado. This comes to life in an employee who shows a willingness to work toward a goal. “It’s not just, ‘Can they work hard?’ it’s ‘Are they willing?’” she says. They also have what Salgado calls “curious intelligence.” Are they looking to learn more and figure things out? And finally: integrity. “Will they do the right thing even if no one is looking?”
Unlike job skills, these traits of emotional intelligence can’t be taught, says Salgado. These are traits an employee needs in order to build relationships, which are critical in teamwork and in the customer experience.
“These are the people who will help you build that culture behind a strong team and, thus, a strong business,” Salgado says. “These are the right people on the bus to help us get wherever we want to go.”
The employee turnover rate in hospitality is the highest across all industries.
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