Bosses Swear by the 90-Day Rule to Keep Workers Long Term
Chipotle, Waste Management and others gear hiring around reaching a milestone they say is critical to employee retention
In the quest to retain workers, companies are sharpening their focus on a very specific common goal: 90 days.
Hold on to an employee for three months, executives and human-resources specialists say, and that person is more likely to remain employed longer-term, which they define as anywhere from a year on in today’s high-turnover environment. That has led manufacturing companies, restaurants, hotel operators, and others to roll out special bonuses, stepped-up training and new programs to prevent new hires from quitting in their first three months on the job.
Heating and air-conditioning company Carrier Global Corp. CARR 0.55%▲ began pairing new hires with a more experienced “buddy” in its manufacturing facilities after discovering most attrition happened before an employee hit the three-month mark, said Chief Executive David Gitlin. Executives at Minneapolis video software company Qumu Corp., QUMU 2.04%▲ have retooled training and onboarding processes partly around the goal of reducing what the company calls “quick quits,” or departures within three months, said Mercy Noah, Qumu’s vice president of human resources.
Some franchisees for McDonald’s Corp., Wendy’s Co., and others advertise new-hire bonuses of hundreds of dollars, many payable after 90 days; CVS Health Corp. gives warehouse workers at some of its facilities a $1,000 bonus if they stay on the job for three months.
“If you see someone hit the three-month mark, the reality is, they’re going to be here for at least a year,” said Marissa Andrada, chief people officer at Chipotle Mexican Grill Inc. Chipotle has focused on consistent scheduling and giving new hires a clear explanation of company operations and benefits, she said. The tactics are designed to help employees be comfortable in its restaurants and motivated to stay, she said.
This summer’s labor market is among the tightest in decades, and finding enough workers, let alone desirable workers, remains so difficult that companies are increasingly motivated to retain new hires. Three months have traditionally been considered enough time for employees to begin to prove themselves, veteran human-resources executives say. Many companies also still enforce 90-day probationary periods, with some withholding benefits like health insurance in the meantime.
Just as it can take weeks of consistent effort to develop an exercise habit that sticks, employers have found that 90 days is typically enough time for workers to get into a steady routine of a new job. This can be particularly important for hourly employees in higher-turnover industries like hospitality or manufacturing, executives say, where workers have plenty of options.
The unemployment rate stood at 3.6% last month. Employees have benefited from a labor market that has given them the ability to more easily change jobs for higher pay. Workers are flexing their power in other ways, too. Employees at an Apple Inc. store in Maryland voted earlier this month to unionize, creating the first Apple retail union in the U.S., adding to unionization drives at companies such as Starbucks Corp.
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