Saturday, March 26, 2016

Enlightened Leadership

Having just returned from Southern California, I have no intention of indulging myself in travel reminisces at the expense of my readers. I'll only say that thanks to my son Matthew, it was one of the best experiences of my life. It also yielded some very interesting insights.

As people who check my blog regularly may know, I tend to be very critical of politicians, police and big business. In their own way, each often massively abuse their authority. Yet I also try to balance my criticisms by acknowledging good practices when I find them. The California chain, In-N-Out Burger, is one business that epitomizes both respect and opportunity for its employees, something that, in an ideal world, would be the norm.

Begun in 1948 by Harry Snyder and his wife Esther, and still a family-run chain today, it is freed from the corporate demands that so often mean treating employees like dispensable and replaceable tools. Like the exceptional corporate-owned Costco, it knows that investing in its workers is key to its success. While all store employees start at the very bottom (cleaning tables, floors, etc. before they can even cook a burger), the job's potential is quite significant. Consider these facts:
In-N-Out starts their employees at $10.50 [now $11] an hour. That's the highest of any fast food chain in the country.

While the median wage for a manager of a fast food store is $48,000 per year, employees at In-N-Out can eventually work themselves up to $120,000. That's otherwise unheard of in the industry.
According to Carl Van Fleet, the current CEO, there are solid reasons behind being an industry leader:
Our founders, Harry and Esther Snyder, started In-N-Out Burger in 1948 and were focused on taking great care of our customers, taking great care of our associates and maintaining an intense focus on quality. That focus remains firmly in place today and paying our associates well helps us maintain it.

We strive to create a working environment that is upbeat, enthusiastic and customer-focused. A higher pay structure is helpful in making that happen but it is only part of our approach. It is equally important to treat our associates well and maintain that positive working environment in all of our restaurants.
So good remuneration is only part of In-N-Out's formula for success. It offers benefits that are indeed rare in so many workplaces today, and almost unheard of in the fast-food industry. The perks for full-time employees and their dependents include
- a package of medical, dental, and vision benefits
- a retirement plan with a Defined Contribution Profit Sharing Plan and 401(k) Plan
- company contributions made into the plan
Many part-time employees also qualify for the above, as well as the accrual of six days cumulative sick-leave days per year, flexible working hours to accommodate people's needs, chain-wide closure on Christmas Day, Easter, and Thanksgiving, and free meals on work days.

Oh, and one more thing. In response to consumer demand, the chain has committed to use only antibiotic-free beef, although no date for implementation has yet been announced.

We ate at one of the stores, and I can tell you four things: It was very busy, despite it being about 3:30 in the afternoon; all the employees were polite and appeared very positive; the food was quite good (everything, including the buns, are fresh and never frozen), and the prices were excellent.

All in all, In-N-Out Burger appears to be an industry leader in a field where so many shameful and demeaning practices abound. Too bad others refuse to acknowledge that healthy profits and respect for employees are not mutually exclusive.


  1. Memories.

    Do the burger guys add the menu price of the meals they provide their employees to their taxable income? That was the practice when I worked at Rendezvous many years ago - probably a requirement by Revenue Canada. That was a real laugh and a lesson to us as we watched people who worked for tips get their houses paid off in five or ten years. I remember one guy asking for the dollar-fifty in cash so he could get a couple of burgers at Harvey's after his shift. That was the last we saw of his name on the work schedule.

    Thankfully, I haven't had the luck to be involved in the food and hospitality industry for a long time, so I'm totally unaware of current practices.

    1. A very interesting question, John. I'm not sure of what the tax code stipulates in California. I do know that the fast food industry does not look like a place for slackers. At the In-N-Out, all the workers looked very, very busy, so the fact that the potential exists for substantial income is a well-earned one.

  2. Well, Lorne, no trip to SoCal is complete without In-N-Out. Says the guy who never found one when he needed to eat. Never, not once - I'll live in shame forever.

    1. Well, what can I say, Mound? They do have over 300 locations. It was, by the way, the cheapest meal we had anywhere during our trip.