This week, Danny Meyer’s company announced a parental leave plan that is uncommon for the restaurant industry. All full-time workers who have been employed within the company for a year or more will be offered 100 percent of their pay for the first four weeks after they become parents — when a child is born or adopted. For the four weeks after that, they will be offered 60 percent of their base pay. This leave plan applies to mothers, fathers, and committed domestic partners with babies or newly adopted children. It extends to workers at all 13 Union Square Hospitality Group restaurants around NYC, including Blue Smoke, Gramercy Tavern, and The Modern
Under federal law, businesses are required to offer eligible full-time employees twelve weeks of unpaid parental leave if they’ve been working for a year. Union Square Hospitality Group’s plan theoretically ensures that employees will have financial support during the first two months after they become parents, and it will likely help them reintegrate into the workplace once the leave is over. By creating a system that’s supportive to mothers, specifically, this plan and others like it could help bridge the industry’s gender gap. The parental leave plan — which goes into effect starting on January 1, 2017 — was announced less than a year after Meyer and his team vowed to eliminate tipping throughout their group by installing a system that they call Hospitality Included.
To understand more about how the group developed and instituted this program, Eater spoke with Union Square Hospitality Group’s Chief Culture Officer, Erin Moran. Here are some questions about the leave plan, with her answers:
What was the company’s previous parental leave policy?
Well, we didn’t actually have one. In some of our businesses, we offered for the birth mother different weeks based on different levels of tenure. But we didn’t have a company-wide parental leave. For the birth mothers, it was for our salaried employees, so for management and above, but it was not being extended to hour hourly employees. We encouraged our birth mothers in the past to apply for short-term disability and FMLA, of course, but there wasn’t a direct company benefit associated for birth mothers, for hourly employees in the past.
That sounds in step with how a lot of the industry operates. How did the new plan come together?
I’m coming up on my third year [at Union Square Hospitality Group]. And I am from outside of the industry — I worked in professional services for about 15 years. Not being from the industry and also working for a company called Great Place to Work that studied great workplaces and partnered with Fortune Magazine to publish the 100 Best Companies to Work For list, I had seen lots of different amazing parental leave programs across a variety of different industries. And so, when I first came on board, I asked the question: Why do we have this type of program in place? And for the most part, it was because that was how it started and we hadn’t really made huge improvements to it over time.
So I started to ask more questions and started to talk to individual employees across our different businesses. And then in early 2015, we launched a pilot program in our corporate office, which was the same program that we launched to all of our people [this week], just to see how that felt and what we could learn from that experience. And there’s always been a buy-in from Danny across the board. He said, "Please evaluate this, make a recommendation, let’s do what we can." He’s always been a huge supporter of it. And then recently, a few colleagues and myself attended the United States of Women, that was hosted by the White House over the summer, and they shared lots of really compelling and amazing statistics about the importance of parental leave and the socioeconomic impact that it has on the U.S. And we were already planning on enhancing our program, but that was one of the things where we said, "You know what? We really have to move on this." So that was the part of the story that got us to drafting the plan, collecting leader input, getting it approved by our executive committee — by Danny, of course — to the point of communicating it [this week] so that we could have an effective date, the first of the year.
Why the first of the year?
One obvious reason is because that’s kind of a refresh date — things start over again on the first of the year. The second is that our primary objective is to be an organization where people can advance their careers. And with Hospitality Included, we established a clear and transparent road map for growth. And this is an add-on to that, because we recognized that if we want you to grow your careers here at USHG in addition to the clear and transparent road map for growth, we also need to evolve our overall benefits offering and package for people to evolve over time as their life needs change. And we want our people to have really whole and full lives both inside and outside of work. And so this was a natural step in the commitment to doubling down on professionalizing our industry and being a company that attracts the top talent in our industry and also retains the top talent as they continue to grow and advance their careers.
Did the company ever lose talented people when they had children? Or was it something that you were trying to prevent?
Both. Of the stories that we did hear, there were people that went straight home with their child and they didn’t feel like they had the support to be able to take on the economic challenges of no compensation or very little compensation from short-term disability. But mainly, we wanted people to know that this commitment is an option for them if they were thinking, "Well at some point I do want to start a family, but I have to change industries or change jobs in order to even be able to do that." That’s something that crosses people’s minds. And also [this connects] back to Hospitality Included. Because we offer the now-weekly revenue share program in our Hospitality Included businesses, [during] that Monday morning shift for the same skill level, you can earn the same amount of money on that Friday night shift. That already starts to balance a little bit of the equation for people to manage their personal lives, and this is in addition to that as well. Currently we don’t have a very clearly articulated ROI, meaning that we have an idea of how much we will spend on this program relative to the impact that it will have on the attraction of top talent or the retention of top talent. But we are confident that not only is this the right thing to do for our people, but also it will positively impact our bottom line in the long-term approach to our business.
What’s the direct connection between this plan and the bottom line?
We know that when we lose great people, that represents an enormous cost to our business because not only is all that institutional knowledge going out the door with that person, but also then the associated expenses with recruiting someone, on-boarding someone, training them, even getting them up to that level of institutional knowledge is all an investment in their development and their training. And we know that if we’re able to positively improve retention, then it will absolutely financially benefit our business.
Did the company have to make any adjustments this year to introduce this leave plan?
We are constantly evaluating opportunities that aren’t visible to our guests in terms of reducing our expenses. So we are always looking at that, because we want to make sure that we’re managing our businesses really effectively to continue to have an experience for our guests where they derive value. We don’t want to over-inflate our menu prices. So we are constantly looking at our expenses, and we’re also overall looking at our offering to our employees in terms of their benefits and which ones matter most and which ones are being used most. And there is always a balancing equation. If we’re going to be offering this benefit, which we’ve heard from our people matters so much for them, what are the other benefits that people don’t want or don’t need or don’t really appreciate that we can continue to dial back on?
If you’re a new parent, do you have the option of working days or nights? How much does the company take that into consideration in terms of scheduling?
I mentioned that I’m completely new to the industry — [I joined] three years ago — but I am a single mom myself, so I certainly have a tremendous amount of empathy. I have a very different position than our colleagues that work in the restaurants, but that’s one of the reasons I’m so passionate about this program. What I would say is that regardless of whether it’s a new parent or whether it is someone who has a particular passion outside of work or someone that is involved in a school program, that our business leaders are always trying to balance the needs of the individual with the needs of the business. So that’s not to say that it’s a perfect equation — it’s balancing — but certainly we invite our people to share what their needs are with our leaders so that they can take that into consideration when it comes to scheduling.