Hilton, McDonald’s Pay More Attention to Blue-Collar Staff

Aliah D. Wright By Aliah D. Wright April 20, 2018
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Employees at the Conrad New York Hilton enjoy a bite in their newly redesigned cafeteria.

Hilton wants to be the "most hospitable company in the world." That hospitality extends not only to its guests, but also to staff members those guests may never see.

The hotelier has launched an ambitious program for back-of-the-house service workers in areas such as maintenance, food preparation and landscaping.

Its Heart of House initiative will renovate employee common areas like cafeterias and locker rooms and apply fresh paint and new lighting to employee workspaces.

Benefits and working conditions have improved as well. Employees now have their own dedicated Wi-Fi, new uniforms made by Under Armour, and discounts on rooms for themselves and their families and friends. 

Chief executives looking to improve turnover and save money would do well by taking note of how Hilton, Hyatt, McDonald's and other big companies are treating their blue-collar staff. They are part of a rising wave of organizations that recognize how you treat all employees is important—and goes far beyond offering a 401(k), vacation and health insurance. Treating all employees with respect and making sure their work environments are pleasant shows you view them as more than replaceable commodities, as well as saves money and improves the bottom line.

Keeping hospitality employees happy is crucial since hospitality managers are having a hard time finding qualified employees. According to the Bureau of Labor Statistics (BLS) there was a 4.6 percent job open rate in the sector in February 2018, with 6.3 percent hires and 6.0 percent separations.

It is especially important now that companies are no longer judged only by what they advertise or market. Social media and the rise of anonymous employee reviews on sites like Glassdoor, Fairygodboss and kununu have blended the employee experience and the customer experience so much that organizations are weighed and measured by how they treat everyone—employees, candidates and customers alike. That, in turn, can hurt or help recruitment.

So far, Hilton has renovated employee common areas at 500 of the properties it manages. It hopes to expand that to thousands of its more than 5,300 hotels worldwide. It's all part of Hilton's Thrive@Hilton plan, a mind, body and spirit wellness initiative for employees.

"It's pretty basic," said Matthew W. Schuyler, Hilton's chief human resources officer, in an interview with SHRM Online. "We view our team members as part of our family, and how we treat them matters not only because it will lead them to treating our guests better, but also because you treat your family with respect. To deliver the best service you have to have the best people, and to have the best people you have to have the best environment."

One Goal: Incentivizing Employee Education

McDonald's Corp. has allocated $150 million over five years to its global Archways to Opportunity education program for its employees.

Launched in the U.S. in 2015, the program has given more than 24,000 people greater access to education and awarded over $21 million in high school and college tuition assistance. Employees have graduated from college with degrees in accounting, business administration, communications, human resources, microbiology and more.

"Since its inception, Archways to Opportunity was meant to match the ambition and drive of the restaurant crew with the means and network to help them find success on their own terms," McDonald's Chief People Officer David Fairhurst stated in a release. "By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald's, we'll invest in your future." 

Ron Williams became the first person in his family to earn a college degree with the help of McDonald’s Archways to Opportunity

A McDonald's spokesman told SHRM Online, "Our commitment to education reinforces our ongoing support of the restaurant employees who play an important role in our journey to build a better McDonald's. By bringing restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential—whether that's at McDonald's or elsewhere."

At Hyatt, CEO Mark Hoplamazian led the charge to redesign front desks to make check-in easier for workers and guests. It takes just three keystrokes to check guests in on iPads (it used to take 143 in a previous system), freeing employees to provide customer engagement in other ways, like walking guests to their rooms.

"From a hotel efficiency perspective, it reduces friction in a place where there's lots of turnover," Hoplamazian told Quartz, adding that the system is easier for new employees to learn.

Employee Engagement Isn't New

According to Daniel Stokols, professor of social ecology at the University of California, Irvine, by the 1950s, employers began bestowing more care on the workspaces of white-collar workers than on those of their blue-collar counterparts.

Upgrading managers' work environs became a strategic initiative to nurture ingenuity, improve a company's brand or attract talent.

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"Often, the blue-collar workforce gets the short end of the deal," Stokols told Quartz.

Not so at Hilton.

Improvements to blue-collar workers' common areas have paid off. Better-qualified candidates are applying, and turnover has declined considerably, Schuyler said.

Those changes are a big deal. According to the Society for Human Resource Management's 2017 Talent Acquisition Benchmarking Report, the average cost-per-hire in 2016 was $4,425, and the average time it takes to fill a given position is 42 days.

Hilton saved about $30 million last year because turnover fell 6 percent, Schuyler said. And turnover in the U.S. fell 13 percent last year for Hilton employees who are Millennials (the generational cohort that makes up 35 percent of the U.S. workforce, according to Pew Research Center).

There was more good news for the hotelier. Hilton's leadership index scores—an internal metric based on surveys about employees' job satisfaction and trust in leadership—rose more than 7 percent. Hilton's annual wage growth averages about 5.5 percent, including promotions and yearly merit increases.

For each of these organizations, treating employees well has yielded more than savings and high marks.

Matthew W. SchuylerAt Hilton, "we've changed the way we're talking about our team member value proposition," Schuyler said. "We're talking about everything we do as an employer for you that allows you to thrive in your role, to accomplish your goals."

He said the new perspective is one of the reasons why Hilton offers its employees flexible work arrangements and advance scheduling, and informs them about career opportunities that can take them from the back of the house to the front.

"Our mission is clear," he said. "[T]o be the most hospitable company in the world. In order to do that, we need to be equally hospitable to our team members."

Whether they're seen or unseen.

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