October 29, 2003

Training Employees Pays off

While training can make a difference in any business, it can be especially crucial in the restaurant field, where the employees who are the company's public face tend to change jobs often.

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At Cracker Barrel, training is a specialty

By KATHY CARLSON
Staff Writer

The Lebanon-based restaurant chain believes in investing in its employees.

Eleven years ago, Donna Golliher slipped a brown apron over her clothes and started work as a server at the Cracker Barrel Old Country Store in Crossville, Tenn.

Early one morning, before the rest of the servers had arrived, a bus pulled up and 45 people got out. When the store manager pitched in, taking drink orders and doing whatever was needed, Golliher noticed.

Then she learned about Cracker Barrel's training programs, which combine better pay, benefits and other incentives with the chance to move up. ''I was so taken away,'' she said last week. ''I knew that I wanted to stay with Cracker Barrel.''

Over her career, participating in the programs, she has earned the four stars that identify those who have completed all four segments of in-store training. She's worked on the red-shirt team that opens new restaurants across the country. Eventually she moved to the chain's home office in Lebanon, where she works now.

''I just think that Cracker Barrel provides a great opportunity to employees,'' she said.

While training can make a difference in any business, it can be especially crucial in the restaurant field, where the employees who are the company's public face tend to change jobs often. Training new workers can be expensive, especially now, when the restaurant industry grapples with whether to pass rising food costs on to consumers.

Trimming turnover by five percentage points, for example, through training and employee-recognition programs can yield big benefits at a restaurant, said Rick Ford, president of The Sage Group, a Brentwood company that offers training consulting primarily in the automotive and telecom industries.

Turnover for all hourly Cracker Barrel employees is about 118%, said Julie Davis, spokeswoman for the chain's parent company, CBRL Group Inc. That's about par for the restaurant industry as a whole, analysts said.

But for hourly workers who have completed all four parts of Cracker Barrel's Personal Achievement Responsibility training program, from cooks to servers, turnover is 24%, Davis said.

''They've created a real kind of career server, and that's different from the norm,'' said analyst Amy Greene of Nashville's Avondale Partners.

Every new Cracker Barrel restaurant employee starts as a PAR 0, and entering the PAR program is voluntary. Some, such as college students working part time, opt out because they know they won't make a career in the restaurant industry, Davis said.

Throughout the PAR program, employees learn and practice a growing set of skills, from the basics of the job to leadership and conflict resolution. They take written tests and are evaluated by managers. To progress through the program, workers must earn increasingly higher grades. The program is offered in English and Spanish, and workers are paid to study written learning materials.

As the workers progress, they earn salary raises and larger company contributions toward their health insurance, as well as other incentives, including discounts on store purchases. Davis declined to give amounts of the raises and insurance contributions.

The program has been in effect for 25 to 30 years, said Stacy Stinson, PAR program director.

''It's part of our culture. Our operations folks totally embrace it, and that's what makes it work,'' Davis said.

In more recent years, PAR IV employees have been able to participate in a separate internship program, which grooms in-store workers such as Golliher to become associate store managers, putting them on a management track. The only educational prerequisite is a high-school diploma or the equivalent. Golliher, for example, had some college credits but didn't graduate.

Golliher started in the internship program in 1995, as it was beginning. She made associate manager and then moved to the home office in Lebanon. She has had two promotions and now works as an operations specialist on special projects for the retail and restaurant parts of the company.

''If you have the desire, the ability is there to progress to any level that you would like. I'm living proof of that,'' she said.

Restaurant industry analyst Robert Derrington of Morgan Keegan & Co.'s Nashville office says he doesn't get data on training per se, but he and other observers examine what he calls anecdotal evidence to see how customers are treated. The Cracker Barrel chain has been the top performing chain in its category for 13 years in a row, he said. In addition, the company has had ''solid'' same-store sales growth.

''The only way you grow your sales is if you take care of customers,'' he added.

CBRL Group Inc.

Headquarters: 106 Castle Heights Ave. N., Lebanon, Tenn. 37088

CEO: Michael A. Woodhouse

Symbol: CBRL (Nasdaq)

Description: CBRL is the parent of the restaurant-retail chain Cracker Barrel Old Country Store Inc. and the Logan's Roadhouse Inc. restaurant chain, both Tennessee corporations.

About the company: Both concepts are steeped in nostalgia. Cracker Barrel locations are modeled after yesteryear's country stores, and Logan's roots go back to the roadhouses of the 1940s and 1950s.

Number of employees: Approximately 65,000 people work for CBRL and its subsidiaries

2002 revenue: $2.2 billion for the fiscal year ended Aug. 1, 2003

2002 net income: $106.5 million

Market capitalization: Approximately $1.8 billion

Outstanding shares: Approximately 48 million 52-week share price range: $22.35 - 39.95

Kathy Carlson can be reached at 259-8047 or at [email protected]

Posted by Craig at October 29, 2003 08:42 PM