Indeed, Darden has continued to invest in its people through the years. In 2018, the company learned it would save $70 million through the federal tax reform legislation. Darden took $20 million of that savings and invested it directly back into its workforce.
The company has also taken steps to ensure competitive wages for its hourly restaurant employees going forward. While Darden’s tipped employees on average earn more than $20 an hour, Darden announced in March that every hourly restaurant team member will now earn at least $10 per hour, which includes tip income. This pay floor will increase to $11 an hour in January 2022 and $12 an hour in January 2023.
Darden has also invested approximately $17 million to provide a one-time bonus for nearly 90,000 hourly restaurant team members in recognition of their hard work and dedication during the pandemic. Bonuses ranged from $100 to $300, depending on the number of average weekly hours. Darden is also providing additional paid time off for employees to get vaccinated, so they don’t lose pay by getting the vaccine.
The company’s leadership in the early days of the pandemic was one reason that Darden was noticed by JUST Capital, a not-for-profit co-founded in 2013 by a group of concerned people from the world of business, finance and civil society – including Paul Tudor Jones II, Deepak Chopra, Rinaldo Brutoco, Arianna Huffington, Paul Scialla, Alan Fleischmann, and others. JUST Capital is committed to building an economy that works for all Americans by helping companies improve how they serve all their stakeholders – workers, customers, communities, the environment and shareholders.
From simple things such as a straw-upon-request policy at all of its restaurants to the 120 million pounds of surplus, wholesome food not served to guests that is donated through its Harvest Program launched in 2003, Darden is doing its part to make a difference in the world and led to them being featured in JUST Capital's Corporate COVID-19 Tracker.
Transparency builds trust, mitigates fear
Through the second half of 2019 and into early 2020, Darden was looking at another successful fiscal year. The company’s digital strategy, which enabled customers to order from outside the restaurant and streamlined the wait, the pickup process and the speed with which they could pay, was working. Overall, total sales were up 4.1%.
And then everything changed. All Darden’s efforts to support employees, build digital technology and create a team that functioned like a family became more important than anyone could have ever imagined.
In early March 2020, like everywhere throughout the world, there was a sense of tremendous uncertainty within the Darden organization. Every day brought worse news than the day before. As the world went into lockdown, restaurants everywhere closed their dining rooms and those that could do takeout service sought to quickly transform, seeing it as the only lifeline to keep their business afloat.
Darden identified five priorities that would guide the company’s decision-making process in the face of a global public health crisis:
- Prioritize guest and team member safety
- Invest in its team members
- Provide frequent and transparent communication
- Leverage its digital platform
- Be brilliant with the basics
“I knew if I took care of our team members the best I could, they would be there for me on the other side,” Lee says. “The big decision that we made was to provide a bridge for our team members to where we knew that unemployment insurance was going to be there and the government was going to send out checks.”
As dining rooms closed, Darden continued to invest in its team. Since the early days of the pandemic, Darden has invested $200 million in team members at the restaurant level. In addition to expanding paid sick leave to include hourly workers so team members could stay home if they were ill, Darden introduced a three-week emergency pay program that provided nearly $75 million of pay for hourly team members who were out of work due to temporary restaurant closures. Of all the companies that JUST Capital tracks, Darden is the only one that made paid sick leave benefits rolled out during the pandemic permanent for all employees.
When emergency pay ended, Darden covered insurance payments and benefit deductions for hourly team members who were furloughed. The company also introduced an additional payment to help cover unexpected costs, such as transportation and childcare, incurred as a result of the pandemic. And to recognize the efforts of its managers, Darden paid their target bonus for the fourth quarter.
“We know our people are our greatest competitive advantage,” Lee said in a letter to shareholders about the company’s pandemic strategy. “Not only were these investments the right thing to do to take care of our team members, they also created deeper loyalty and strengthened engagement, which we saw pay off as we brought our people back to work.”
When Lee looks back on the early days of COVID-19, he remembers the fear that everyone felt about what was happening.
“It was scary for 10 days or so,” he says. “Until we knew that we were going to be able to operate and be deemed essential for off-premise purposes.”
When Lee had answers, he told his team. When he didn’t have answers, he told his team what he was doing to get answers. Transparency was a top priority in every message that came from Darden’s executive team.
“We weren’t hunkering down and saying, ‘Don’t worry, we’ll figure it out,’” says Susan Connelly, Darden’s Senior Vice President, Chief Communications and Public Affairs Officer. “We really brought everyone along on that journey with us.”
Do the right thing – always
As the pandemic raged around the world, money was a huge concern for those whose jobs were suddenly in jeopardy. But health and safety had become a more immediate fear, which was always top of mind for Darden’s leadership team.
In order to stay in business with dining rooms closed, online ordering became the only option. Darden valued its role in providing comfort to customers who could still get their favorite meals to go. But that still required employees to leave their families and come into work during what was a very scary time for everyone.
“The duty for us to take care of the people who have done so much for us over the years was paramount in our decision-making process,” says Sarah King, Darden’s Chief Human Resources Officer.
Darden has followed guidelines from the Centers for Disease Control and Prevention from the beginning, even in states where they could have relaxed social distancing protocols.
“We think it’s working well for us from both the guest perspective and, again, an employee perspective,” King says. “There is an appreciation and understanding that we are putting their health and safety before profit.”
“Leaders who deliberately put their people at the center when decision-making are those who are running sustainable businesses – delivering value to both their shareholders and their workforce,” says Joe Dettmann, a principal at Ernst & Young LLP (EY US) leading the firm’s Purpose/Vision, Culture and Leadership practice.
