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McDonald's
Improving Employee Experience with People Analytics

Objective of the Project: Reduce turnover in restaurants and enhance employee experience.

Project Date: 2019

 

This project was carried out by the People Analytics business unit of VON DER HEIDE prior to the spin-off and subsequent establishment of the company PeopleOPTI.

Arcos Dorados, the largest restaurant chain in Latin America with a presence in over 20 countries and the largest franchise of McDonald's in terms of active units, embarked on a journey to improve employee experience and reduce voluntary turnover. Despite being inherent to the fast-food industry, high turnover rates persisted in their restaurants in Chile. In 2017, the percentage of voluntary turnover remained above 100% annually, even though several successful measures had been implemented to address the issue.

To tackle the challenge, Mariana Tarrio, HR Manager of Arcos Dorados Chile, along with Patricio Nobili, HR Director for the Southern Division of LATAM, and Diego Benenzon, Corporate HR VP of McDonald's LATAM & Caribbean, decided to take a different approach by leveraging the power of data and implementing People Analytics.

The objective for Arcos Dorados Chile was to create a data model that could uncover the underlying causes of employee attrition and develop a predictive model to identify resignation risks early on. This would enable them to implement targeted and precise action plans to reduce turnover and enhance employee experience.

For Mariana, Patricio, and Diego, the essence of the People Analytics project was to understand the stories behind the employees who left the company and augment historical decision-making models with predictive capabilities. This approach would not only improve turnover rates but also shed light on how the current level of turnover impacted the business. For example, they sought to uncover the relationship between voluntary turnover and critical business variables such as transaction volume and average ticket value per restaurant.

A crucial stage of the project involved consolidating the available data for each employee into a single database, which was vital for generating valuable insights to drive actionable plans. Arcos Dorados analyzed data from 62 restaurants, encompassing more than 12,900 current and former employees, and a total of 121 interrelated variables.

 

After integrating and linking the different data sources, an analytical process was conducted to test several hypotheses regarding potential causes of voluntary turnover. The resulting insights helped identify various significant drivers of voluntary turnover, including demographic factors such as age ranges and nationality, operational variables like monthly working hours and overtime, as well as indicators such as job roles and the restaurant's climate. Other important discoveries were related to the impact of training and leadership on employee behavior.

 

One of the most valuable learnings was the indirect business impact of employee attrition, measured in economic terms by understanding lost transactions and the decline in average ticket value per restaurant due to turnover.

 

For Mariana, Patricio, and Diego, reverting to traditional management practices without leveraging People Analytics would be challenging. The ability to predict behaviors and identify opportunities before employees decide to leave the organization is crucial for achieving their objectives.

Arcos Dorados Chile is now actively implementing the action plan resulting from their initial experience with People Analytics. They anticipate that by enhancing employee experience in the short term, they will witness a reduction in turnover and a positive impact on key business indicators.

Today, Arcos Dorados has gained clarity and the tools to manage differently, firmly believing that the use of People Analytics has sparked a mindset shift worth further exploration and development.

 

 

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