November 10, 2015

Pay and prices: setting a date

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Hi all. Time for an update on pay and prices. We’ve set a date for the first increase: 11/14/15

If you hit CloverHFI Friday at 11:59pm the ridiculously popular Brussels Sprout sandwich will be $6.54 ($7.00 even with tax). If you hit CloverHFI at 12:01am Saturday morning that same sandwich will cost $6.78. And the staff working to get you that sandwich will be earning $0.25/ hour more (unless they are a provisional employee or on salary).

If you’ve been following this (many of you have) we’re on a mission to pay more. If this is new to you check out our previous posts pay post 1, pay post 2. We’re going to achieve higher pay by making small increases to prices and watching what happens to transactions. Pay will increase when prices increase. I’d love to get to an average pay rate of $20.00. But we’ll do this cautiously, step by step. Currently our average pay is $10.60 at the restaurants (some people earn much more, nobody earns less than $10, average is $10.60).

We’ll share details along the way. So here’s what’s happening with the first increase:

ITEMS IMPACTED:

Sandwiches are $6.54, will be $6.78

Platters are $7.48, will be $7.71

Kids items are $3.27, will be $3.50

French fries with rosemary are $3.27, will be $3.50

No other items will be impacted this round.

PAY IMPACT:

If you all keep coming these changes will allow us to make meaningful increases to employee pay. Team Members will get a $0.25 raise, as will Team Leaders, and folks that work at the kitchen and bakery in non-leadership roles. No changes will be made to salaried roles at this point (we typically set leadership compensation on an annual basis). This represents almost $400 per year increase in compensation for our hourly employees.

Some of you have asked how much of the increase goes to employees. In this case it’s about 70%. You might wonder why not 100%? A couple of reasons. (1) In the case that we’re wrong we need to cover any downside (I don’t want to be decreasing wages), (2) we would need to make increases in prices even if not for our wage effort, prices of inputs, rent, etc. continues to increase.

We’ll watch transactions carefully and 4 weeks in or so I’ll share with you the results. Assuming we don’t see a fall-off we’ll move forward with the next round of incremental increases. I’d like to continue on this path because I think paying employees more will make a better Clover which will benefit us all.

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