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How A Culture Of “Doing The Right Thing” Can Be Good For Business – Megan Hansen

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MOD Pizza was founded with the goal of using business to make a positive social impact. Founders Ally and Scott Svenson realized that through the fast-casual pizza segment they pioneered, MOD could create a positive effect on the lives of their fiercely loyal employees. MOD’s hiring philosophy – that talent is everywhere, but opportunity is not – continues to drive their success and gives their employees purpose.

The Challenge

When MOD learned that 5.5 million young people in the U.S., ages 18-24, are out of school and unemployed, they saw an opportunity to not only impact lives but solve a critical business need.  Like many other companies, MOD was having difficulty recruiting entry-level workers to keep up with the 2,000 MOD jobs created every year through their rapid expansion.  MOD was also challenged with high turnover; although their rate was typical of the restaurant industry, it was higher than they would like.

The Solution

Through FSG’s Innovation Lab program, MOD set out to discover whether a partnership with a community-based organization could help address their high turnover and recruitment challenges through providing them with both a pipeline of career-ready youth and the wrap-around supports these youth needed to be successful.

MOD decided to focus their pilot partnership in the Bay Area where MOD restaurants were facing upwards of 67% turnover at the 90-day mark.  Next, they identified potential partners in the region and ended up forming a partnership with JUMA, a national youth-centered social enterprise that was also interested in piloting a new employer partnership model.

The Result

Less than a year into the partnership, MOD is finding that their collaboration with JUMA is having an impact on their recruitment and turnover. Of young people hired by MOD during the pilot, only 50% turned over by the 90-day mark compared to 67% for the region.

When asked what they value most about the partnership, general managers shared that not only has the partnership eased their recruitment challenges, but it has also provided them with an amazing opportunity to invest in the youth.  MOD plans to scale impact hiring at a national level, building both partnerships and a database of community-based organizations that all MOD general managers can tap into as talent pipelines and for support.

Additionally, through the MOD-JUMA Pilot Study, MOD learned that 70% of their 6,000+ employee base are 18-24 years old and that the retention strategies implemented to support the youth hired through the pilot would also be beneficial for their entire employee base.  This has led to the launch of several new initiatives:

  • New KPIs: MOD has begun to hold General Managers accountable for turnover rates. They have set a company goal of reducing turnover by 20% and in 2018 are already seeing a measurable reduction in turnover and cost due to this change.
  • Education Benefits: Through their new Human Resource Information System, the team learned more about employees and their education levels.  With many of MOD’s youth lacking a college and sometimes high school degree, the company is hoping to add an education assistance program to their benefits package to help staff develop their skills for careers at MOD and beyond.
  • Transparent Career Pathways: MOD has developed resources that easily outline the steps and requirements to become a general manager. Their employees come from various backgrounds and bring their own MODness to the team. They recognize that they shouldn’t operate on the assumption that every employee intrinsically understands the pathway to promotion but should instead support employees in helping them get there. They also recognize that MOD might not be a long-term career for everyone, but they can equip employees with meaningful professional development for job opportunities outside of MOD and create pathways for wage progression.

What’s Next

MOD continues to build on their work with FSG and the Innovation Lab to lead in the Opportunity Employment space. Using their business as a platform, MOD is exploring new ways to impact lives at the store level and beyond. By sharing their story, MOD hopes to demonstrate the business value of collaborating for talent instead of fighting for it, and how investing in the lives of employees can produce a positive ROI. The company calls this “Spreading MODness” – the ripple effect of doing the right thing. That is MOD’s purpose and for them, it’s good business.

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