Working at Dick’s is a Family Affair

Fred WhittleseyConscious Compensation: The Impact Compensation Blog

In memory of Dick Spady
, co-founder of Dick’s Drive-In, I am highlighting his company’s history of what many deem to be “new” ideas in employee compensation and benefits.

Dick’s was founded in 1954 in the Seattle area and now has six locations.  They have a rigid business model – no special orders on burgers, no substitutions, and a little cup of ketchup or mustard is an extra 5 cents. If you don’t like your burger their way, they offer a refund. The six restaurants average around 3 .5 stars on Yelp.

For a company that isn’t known for its flexibility with customer orders, it has been a leader in employee compensation and benefits for many years.  In a city where restauranteurs are struggling with the phase-in of the $15 minimum wage, Dick’s shows that long-term success is consistent with, and perhaps a result of, its treatment of employees.

Employment with Dick’s offers these:

Higher Wages:  $11.00/hour outside of the Seattle City limits, and an additional $2.00/hour in Seattle.  Note that this $13.00/hour exceeds the current minimum wage in Seattle for employers that pay toward medical benefits.

Health and Dental Benefits:  100% employer paid for employees working 24 or more hours per week (which is more than 75% of employees)

Educational Scholarships: College, vocational/self improvement scholarships up to $25,000 over 4 years to employees working more than 20 hours per week for at least 6 months.  Note that unlike Starbucks, you don’t have to attend an Arizona-based college.

Childcare Assistance:  $3,500 to $9,000 per year as an extension of the Scholarship program (unused tuition reimbursement can be used for childcare).

Paid Community Service:  Up to 4 hours per month for time spent volunteering with local charities.

For a 24-hour per week employee earning base wages over 50 weeks of $15,600, this results in a total compensation opportunity of $24,450 plus free healthcare coverage, a total value likely approaching double their base wage.

And how does this work?  Dick’s claims that almost one-third of its employees have worked for the company for 2 years or more.  They sum it up this way:

“Although Dick’s commitment to its employees, like Dick’s commitment to quality food, costs more in the short-run, it has been an excellent long-run strategy by giving both customers and employees extra value.”

That’s the premise of Conscious Compensation®– it only appears to “cost more” because one thing is being measured – immediate wage and  benefit costs – with no accounting mechanism available for the return on that investment in lower turnover cost, better customer service, high levels of regulatory compliance (health and safety)…and how employees, customers, and the community view the company. And that measurement is typically done for the current fiscal quarter.

Well, there actually is an accounting mechanism to measure these things, it’s just not endorsed by most accountants. I’ve been doing it since 1981 and some pretty impressive organizations use it.  Like the United States Navy.  See page 61.