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The Business Lessons in Taco Bell’s Turnover Equation

The fast food company has found new and cost effective ways to reduce employee turnover in recent years

In the recent WorldatWork Total Rewards Conference and Exposition, Taco Bell’s vice president of people and experience Bjord Erland discussed how the fast food chain has reduced employee turnover — a major challenge for all those in the sector — in the past few years.

A post in HRE Daily summarizes Erland’s talk: “Well, the big ‘Aha!’ for Taco Bell was learning that earnings were far more important to workers than their rate of pay. Were they working enough hours, including overtime, to bring home a bigger paycheck? (Erland noted that Taco Bell’s pay was competitive with others in the industry.)

“In light of these findings, Erland said, the company began to increase its use of ‘slack hours’ to increase the amount of employee take home pay. ‘Turnover improved when employees were able to bring home more earnings.'”

Pay’s Not All Employees Care About

Taco Bell’s findings are consistent with CEB analysis: pay matters, but only so much. In the food and beverage services industry overall, compensation is a leading cause of attraction to a job: selecting from a list of 38 total employment value proposition (EVP) attributes that attracted them to their work, 44% of employees in that sector said compensation was among the top-five most important attractors.

However, compensation is very closely followed by respect (42%), then stability (33%) and work-life balance (32%). When it comes to employee turnover, a lack of future career opportunities is more likely to make them quit to go elsewhere than any other reason.

When companies like Taco Bell look at their turnover rates, the EVP attributes that employees associate with the company (including what attracts workers and what makes them quit) can reveal great opportunities for improving the firm’s employment brand. HR teams can make adjustments to other EVP attributes — like how respected employees feel, the work-life balance they are offered, and whether they feel they’re provided with sufficient opportunities to further their career — without breaking the bank.


More On…

  • Employee Value Proposition

    Learn more about how EVP can be an incredibly cost effective way to hire and retain the right employees, and use these resources to improve your company's EVP as well.

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