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4 ways to decrease turnover and increase profits

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ATLANTIC CITY, NJ — Successful companies, regardless of the industry, have two traits in common: They invest in their workforce, and they are smart about their operations.

As part of the education programming during Artisan Bakery Expo East, held October 1-2, Karen Bornarth, executive director of the Bread Bakers Guild of America, presented A Formula for Thriving Businesses and Good Jobs, which highlighted four practical operational choices retail bakers can make that are proven to reduce employee turnover and improve profitability. The strategies are the work of Zeynep Ton, founder of the Good Jobs Institute and author of the book, The Good Jobs Strategy.

“If you’re addressing job quality alone and not addressing your operations, you’re only addressing half the equation,” Bornarth said. “These parts have to come together to create a system that is sustainable, that works, that creates a virtuous cycle of business versus a vicious one.”

Bornarth’s four operational choices were cultivated from work she did with a cohort of New York City bakeries. Even after offering good jobs, raising wages, providing additional benefits such as set schedules or flexibility, and creating professional development opportunities for employees, the bakery owners still struggled with basic daily operations.

They committed to working with these four principles with the goal of improving their business performance and job quality.

“They have been testing these ideas with good success,” Bornarth said.

Operational Choice No. 1: Focus and Simplify

Bakers who are building their business may feel they can’t say “No” to a sale, but an ever-expanding menu or a constantly growing list of SKUs can be a detriment to a business.

“Every time you add a new product, you add complexity into your operation,” Bornarth advised. “Instead, look at your high performers and consider focusing on those. Customers don’t expect as much variety from bakeries as they did 20 years ago. It’s okay to specialize and have a niche.”

Offering fewer SKUs makes operations more efficient and accurate, which improves customer service and sales. Yet, bringing the operation into better focus doesn’t have to be just about the product line.

“Focusing and simplifying is not just about your menu,” Bornarth said. “It can be about your hours of availability or how you sell. There’s a bakery in my town that requires customers to place orders in advance and keeps limited product on the shelves for last-minute sales.”

Operational Choice No. 2: Standardize and Empower

Successful manufacturers, regardless of their size, have well-defined processes, systems and communication protocols.

“You need to create SOPs and set expectations for your team,” Bornarth said. “Give them job descriptions and parameters to operate in. It makes it much easier to train people and hold them to employment standards. I recommend asking your team to participate in the process of creating standards and provide feedback, particularly if you’re not directly involved in production.”

Written standards, while necessary for documentation, may not be the best way to communicate with employees, especially if English isn’t their first language.

“Whenever you can rely on pictures, that’s great,” Bornarth suggested. “Everyone carries a phone around. Flour Bakery in Boston created an Instagram channel for its pastry team that has videos of processes for new employees, or anyone who may have forgotten the process. They can pull up a video on their phone for a reminder.”

Standardization must come before empowerment, Bornarth said.

“If you have retail staff, particularly employees with customer services roles, you want to empower those people to make things right, within the standards,” she explained.

Operational Choice No. 3: Cross-train

According to Bornarth, cross-training is critically important for three key reasons: It creates empathy in the team, helps with shift coverage and flexibility, and increases worker motivation.

“If you can introduce cross-training into your operation — which I know is challenging, particularly from a scheduling perspective — it really pays off,” she said.

Operational Choice No. 4: Operate with slack

Operating with slack means there are more labor hours available than the workload requires.

“This is choice number four, but in some ways, it has to be choice number one, because none of the other choices will work without slack,” Bornarth advised. “You’re not going to have time to create standards or invest in cross-training programs if you’re constantly being pulled back to the bench to fill gaps in your workforce.”

Bornarth ended the session with this advice: “When you find good people, do all you can to hang on to them. When you give them enough time, they can perform really well and improve your processes and environment.”

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