Being the Boss

Running a restaurant is trickier than it looks. "It's a lot of businesses in one business," says Douglas Robert Brown, author of "The Restaurant Manager's Handbook." Besides making sure the food is good, owners often serve as hosts, bosses, and budget-watchers all at once. Of those jobs-within-a-job, managing staff can be the toughest. More than four out of 10 U.S. adults have worked in the industry at some time during their lives. But most didn't stick around. The median length of time food-service workers stay in their jobs is just 1.8 years (vs. four years for other industries). "People often look at the food service industry as a kind of pass-through job," says Mary Adolf, president of the National Restaurant Association (NRA) Educational Foundation. Indeed, in an April 2005 study by the NRA, restaurant owners said their biggest challenge was recruiting and retaining employees. In the second installment of our series about small businesses, we return to Nick's Pizza & Pub in suburban Chicago to hear how owner Nick Sarillo, a 43-year-old former construction worker, relies on extensive training, good benefits and a family atmosphere to manage 230 employees and keep staff turnover low.

Three months ago, college student Megan Dougherty, 20, quit a waitressing job where she felt under-appreciated and unhappy with the "insane" turnover. She moved on to Nick's Pizza & Pub in Crystal Lake, Ill. after hearing great things about the place from another server. "[At Nick's] everyone I met was like, 'I've been here four or seven years. I was like: What!'" she says. Dougherty likes the philosophy at Nick's, including its "grandma test." "If you're picking up your pizza, look at it and make sure it's good enough to serve your grandma," she explains. The emphasis on service is reflected in generous tips, which Dougherty says are twice what she got at her old gig. She also appreciates her un-bossy bosses. "[Owner] Nick [Sarillo] comes and if we're busy, he'll help out," she says. "I see him running food and busing tables. The manager in my other job, if I dared ask anyone for help, he would re-evaluate why was I there."

Small wonder that at the beginning of the summer, 50 people applied for jobs at Nick's in a single weekend. The first step of the process is reading the company's unusually extensive "purpose and values" statement. It begins: "Our dedicated family provides this community an unforgettable place; to connect with your family and friends, to have fun and to feel at home!" "[Some] people who walk in the door to fill out an application actually leave. They think it's too goody-goody, they think it's too hard," says Rudy Miick, founder and owner of Miick & Associates, a Boulder, Colo.-based restaurant and resorts consulting company that Sarillo hired three years ago to help with staffing issues. When Nick's managers interview applicants, they look for a positive attitude because they say it's easier to teach people how to do a task than how to change their personality. We look for "energy, attitude, smile, sparkle and spring in their step," explains Sarillo's business partner Christopher Adams, who is 38.

Once they're hired, all employees go through a mandatory four-day paid orientation. They can ask to see the company's open books or even how much a manager earns. (Adams gets $80,000 a year.) At many restaurants, by contrast, new servers "are told to go follow Susy around," says Douglas Robert Brown, author of "The Restaurant Manager's Handbook." Owners, he says, figure their new hires will quit soon and think, "why should I go through an elaborate training program?" But Miick says he has found the opposite to be true. "If we actually raise the bar of expectations, define for employees what's expected, treat them with respect and train them to reach the expectation, we end up with a waiting line of people trying to get in the door," says Miick, who has helped Sarillo reduce his annual staff turnover by more than half. It is now down to 20 percent.

In June, Sarillo put each worker at his Crystal Lake restaurant through about 35 hours of retraining. "It was a long, expensive process," says Adams. And some veterans were reluctant to go through it. "There was a lot of resistance. Much of the team felt they were being retrained because they weren't good any more," says training director Amy Gustafsson. Not true--though Sarillo would like "comp-store sales" (sales for the month this year vs. last year) to be up five percent rather than just three percent. "Three percent for us is not meeting expectations," he says. Post-training, Sarillo says he is getting more comment cards with "wows" and "thank you's."

The NRA's Mary Adolf agrees that Sarillo's approach is sound. "One of the things that we know retains employees is a commitment to training them," she says. "They feel more confident and competent in their job...If they're floundering around, they're not getting any guidance in how to do their job more effectively, they're not getting any feedback from the people they work for or serve, a lot of times they leave in frustration. It's not the job so much as how they're treated."