Restaurant adds incentive to retain young workersNov 19, 2015 By Eric Blom, Staff Writer
Dairy Queen employees can be beneficiaries of a trust fund which helps pay for college after two years of work.
Darrell Hawkins knew he had a problem: He could not find enough people to work at his Dairy Queen Grill & Chill restaurant in Jackson during the busy summer months.
Workers would quit or cut back on hours in favor of other, seasonal jobs.
Retaining employees at his Riverton Dairy Queen location was also a struggle.
Then, at a meeting of Dairy Queen owners in Seattle, he heard of a solution - a company called College Bound based in Lakeville, Minn.
The company administers educational assistance plans through which employers help pay for the education of long-term workers. College Bound president Jim Northam says employees are more loyal to employers who commit to them.
Hawkins signed up.
Any employees at the Jackson and Riverton restaurants now can sign up for the program without any risk or cost. Hawkins's company, Curling Cone Inc., opens a trust fund for workers who do so.
Then, with each paycheck the company contributes and extra 15 percent of what the workers earns into their trust funds. They can earn a maximum of $1,500 a year in their trust funds and $10,500 total.
Once the employee has worked for the company for two years and 1,200 hours, he or she can tap the trust fund for educational expenses.
Hawkins thinks the plan will have more impact than simply paying his workers 15 percent more an hour.
"The problem is so many times the additional money ends up in an iPhone or Nike sneakers or concert tickets or tattoos or something that when they're finally ready to go to college the money's not there," Hawkins said.
College Bound has set up similar programs with Hilton Hotels, Holiday Inn, Subway restaurants and about a dozen other Dairy Queens around the country, Northam said. Those types of businesses rely heavily on workers aged 16 to 24, which can be problematic, he said.
"They're constantly turning over and hiring new employees. There's a significant cost to that," Northam said.
In his experience, about half of the families of the young employees he works with buy into the program, and half of the enrolled young workers stay with their employers for about five years.
Nationally, employees aged 15 to 24 leave a job after about 10 months, Northam said.
"If you make a loyalty proposition to this 15-year-old or 16-year-old, or their parents, a good percentage of those families will make a commitment," he said.
The program often takes three years to become effective, but it can pay for itself by reducing turnover costs, such as advertising for and training new hires, Northam said.
The program also has tax advantages, though there also are taxes on the money businesses contribute to the education accounts.
But money spent on a new employee, such as the wages of a trainer, are taxed as well.
"If you have $100,000 in turnover costs, that's $120,000 in total costs," Northam said. "If its $100,000 in benefit costs, that's $100,000 in total costs."
Northam works with the families of enrolled employees to set up the trust funds and to help them decide when to use the money.
People can use the money for many forms of education, such as college, technical school or specific certifications - "everything where a person is working toward a degree or a certificate where they're improving their job skills or work skills," Northam said.
Nationally, about 70 percent of retail, hospitality and restaurant workers are 16 to 24 years old, Northam said.
Hawkins says his restaurants employ older workers who often work full time and cover day shifts, but he has many workers who are high school and college aged. Northam believes education trust funds are particularly appealing to that younger age group because their families are planning to pay for college. Getting parents involved also helps, he said, because they tend to plan ahead more than teenagers do.