Pal's Sudden Service, a drive-thru dog-and-burger chain based in Kingsport, Tenn., isn't just any fast food joint. Landing a job there is difficult. Managers train and mentor employees every day, and only seven managers have quit in the last 33 years.
It's sounds crazy, the fast-food chains have notoriously high turnover rates. But Pal's, which was selected as one of Inc.'s 25 Most Audacious Companies in 2014, boasts a 1.4 percent turnover rate, four assistant managers, and a 32 percent turnover rate for front line employees, which is a third of the industry average.
CEO Thomas Crosby told Inc. he doesn't expect employees to stay forever, but rather come to Pal's and learn the basics of how to work and run a successful, education- and team building-based company.
"When you're a doctor or a chemical engineer, we want you to look back and say, 'The things I learned at Pal's I still apply today,'" he said.
But what's Pal's secret in preventing attrition in a field where employees don't stay in the industry very long?
William C. Taylor, author of New York Times bestselling book Mavericks at Work: Why the Most Original Minds in Business Win, writes in Harvard Business Review about how Pal created a company where its employees are loyal:
1. Hire for attitude, train for skill
Just to get a foot in the door for the first round of interviews, entry-level candidates need to pass a 60-question "psychometric test" online. The average time it takes to order and deliver food through the drive-thru is 30 seconds (the fastest in the industry).
But Pal's isn't looking for trained fast food employees. Instead, what's valued more is a person's attitude and personality traits.One question from the test asks, in the form of an agree or disagree answer: "For the most part, I am happy with myself," and "Raising your voice may be one way to get someone to accept your point of view."
"Pal's understands that character counts for as much as credentials, that who you are is as important as what you know," Taylor writes.
2. Training and retraining
Pal's is constantly training and retraining its employees. Once hired, employees go through a rigorous training program that takes 120 hours. After passing the initial training, they are quizzed three times a month.
Everyday, a computer spits out names of the employees who will be randomly tested. If an employee fails, he or she must go through a retraining process. (Employees who score 100 percent on four recertification tests can become coaches to help their colleagues pass the tests.)
"It's our belief that human beings, just like machines, need to be recalibrated," Crosby told Inc. "If they are not 100 percent, their certification goes away, and they're no longer eligible to work at that particular station."
3. Always be teaching, rigorously
"Leaders who are serious about hiring also have to be serious about teaching," Taylor writes in HBR. All leaders at Pal's have required reading from the company's "Master Reading List," a collection of 21 books that include Machiavelli's The Prince and Max DePree's Leadership in Art. Twice a month, Crosby asks five managers to talk about one book from the list.
Leaders are required to spend 10 percent of their time every week teaching an employee a topic they need to learn.
"All leaders are teachers, whether they realize it or not," Crosby tells HBR. "So we have formalized a teaching culture. We teach and coach every day."