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How Noodles & Co. improved retention and employee satisfaction

By offering financial wellness benefits aligned with its values, Noodles & Company retains more team members — and upholds its commitment to diversity and inclusion.

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Challenge

Increase 90-day retention rates. Offer a pay experience that competes with the gig economy. Drive measurable improvement to diversity and inclusion (D&I) and financial wellness.

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Solution

Make financial benefits such as on-demand pay and automatic savings a core part of the #LifeatNoodles program. Emphasize financial wellness benefits in recruiting and onboarding.

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Impact

10% lift in 90-day retention for team members who use Even. $1.3M+ collectively saved, including by unbanked employees. 75% of team members feel better about Noodles as their employer.

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#LifeatNoodles is one of the most attractive benefits packages in the fast-casual restaurant space. Each year, Noodles & Company updates the program based on the changing needs of its 8,000 team members across 29 states. Take the start of 2022, when Noodles launched:

  • expanded access to mental health resources;
  • an equity program for eligible General Managers;
  • immigration support with up to $500 in financial assistance.

But like all restaurants, Noodles faced high turnover and financially stressed workers in the wake of COVID-19. However, Noodles found certain financial benefits gave it an edge in recruiting and retention, such as earned wage access (also known as Instapay or on-demand pay).

At the same time, these financial benefits helped Noodles make good on its pledge to diversity and inclusion (D&I), and maintain status as one of Forbes’ best employers for women (2021) and diversity (2021 and 2022).

“We lead with our values. So when we’re facing recruiting issues and things like that, it's, ‘Hey, how can we lean into our mission and values to bring perks to life that drive the desire to work for Noodles?'”

Jennilee Childs Human Resources Director, Noodles & Company

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Challenge

Increase retention, compete with the gig economy, support D&I and financial wellness

“Offering benefits that are important to our team members is a priority. We want to better their lives so they feel good about working at Noodles,” Benefits Manager Jennifer Saperstein said. Not an easy undertaking, especially at a time when 87% of hourly employees feel financially stressed.

Goal 1

Increase 90-day retention rates

Turnover in food services has hit 130% in the past two years per the U.S. Bureau of Labor Statistics. Noodles couldn’t change the industry’s turnover rates, but if it could get a greater percentage of each hiring class to stay 90 days, it would incrementally build a stable workforce.

“From a retention perspective, our sweet spot is 90 days. If we can get new team members to 90 days, we see turnover drop dramatically, helping with retention of the whole team as well as having higher performing locations,” Human Resources Director Jennilee Childs said.

Goal 2

Rival the gig economy’s flexible pay and hours

Noodles knew from analyzing census data that some team members come from financially fragile backgrounds. Think of people like young workers establishing themselves, primary caregivers who need schedule flexibility, or those with a high school degree or less.

More and more, wage workers are turning to the gig economy where there’s a much shorter curve to finding a job and getting paid. Noodles knew it needed benefits that could rival what the gig economy offered.

“Speed is the name of the game right now when it comes to recruiting. If we start competing with gig economy jobs by offering benefits like flexible scheduling and Instapay, we can get candidates that may turn into long-term team members,” Jennilee said.

Goal 3

Make financial wellness accessible to all team members, including the unbanked

Noodles favors benefits that help as many team members as possible, but it also recognizes some need extra support. That includes groups such as Latinx employees, the youngest and fastest growing segment of the American workforce per the U.S. Department of Labor.

They’re also often unbanked or underbanked. At 64%, Latinx and Black households make up the majority of unbanked Americans according to Boston Consulting Group.

“We're committed to building an environment where all feel welcome and valued at Noodles. Different benefit offerings are designed to help give members of underrepresented groups the opportunity to flourish and succeed both inside and outside of Noodles,” Jennilee said.

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If we can get new team members to 90 days, we see turnover drop dramatically.

Solution

Make financial wellness a core part of #LifeatNoodles

Noodles recognized the pandemic made employees prioritize their financial health more than ever, even at the hourly level. It also recognized that financial wellness is not about one-off changes. Noodles needed to holistically consider team members’ financial realities, like their need to cover gaps between paychecks.

1. Launch financial benefits that match team members’ needs and Noodles’ values

By launching Even, Noodles offered its team members a suite of financial benefits, starting with Instapay. Using Even’s earned wage access app, team members could access up to a certain percent of their accrued wages early, either by direct deposit or cash pick-up at a nearby Walmart. Even also gave team members access to financial tools such as:

“These are benefits we can offer to make team members financially secure at home. That way, they don't have those stressors coming to work, so they can bring their full selves to work,” Jennilee said.

2. Emphasize financial wellness during hiring and onboarding

To maximize the impact of its new financial benefits, Noodles leveraged them as a recruiting tool. Paying new hires faster would create a win-win scenario for both sides.

By helping team members avoid financial gaps (wage workers often wait three weeks or longer for their first paychecks), Noodles would set new hires up for a strong employee experience. That makes it more likely they’ll reach 90 days and become long-term team members.

“In recruiting, we include Instapay as a perk on all of our job ads. It's part of what we call our 10 perks. During interviews, our managers talk about it and our team members spread the word. It can really help close that gap between their first paycheck,” Jennilee said



3. Offer on-demand pay and automatic savings options to unbanked team members

With Even, Noodles found a partner who could meet the needs of unbanked team members. On-demand pay could be arranged as cash pick-up at a local Walmart. Likewise, unbanked team members could set up automatic savings, then withdraw the same way.

By helping unbanked employees build financial wellness, Noodles would live its pledge to build a diverse and inclusive workplace. “Now team members don’t have to go to a bank to start saving. They’re eliminating a barrier contributing to some of their financial security challenges,” Jennilee said.

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Results

Increased retention, employee satisfaction, and savings

Even quickly becomes one of Noodles’ most adopted benefits, helping team members increase their financial wellness through earned wage access, automatic savings, and integrated financial tools. Even also helped Noodles’ HR and benefits teams track the data they needed to show ROI to leadership.

10%

increase in 90-day retention rates for team members who use Even

$1.3M

in collective savings so far, including by unbanked team members

75%

of team members feel better about Noodles as their employer

10% increase in 90-day retention rates for team members who use Even

By finding more long-term team members in each hiring class, Noodles incrementally builds a more reliable, predictable pipeline of talent. From March through December of 2021, retention averaged 10.02% higher (77.19% vs. 67.17%) for Noodles team members who signed up for Even versus those who didn’t.

Bar chart showing retention after 90 days for Even members vs non-even members

$1.3M collectively saved so far, including unbanked team members

Automatic savings helps Noodles’ team members lift themselves out of the nearly 80% of Americans living paycheck to paycheck. But Noodles also realized automatic savings drove a positive impact beyond employee financial wellness.

First, automatic savings support retention. “I am encouraged to see that the savings balances are going up over time, which means that we've got some longevity with the people who participated in savings,” HRIS and Total Rewards Director Darcy Dees said.

Second, automatic savings support diversity and inclusion because it provides unbanked team members a way to save. “We’ve almost doubled the financial security of our team members through the Even app by providing them a savings option that doesn't require them to go to a bank and doesn't require them to open a new account,” Jennilee said.

“It’s a game changer for our recruiting team. When candidates look at other jobs, the benefits Noodles offers help them make the choice, ‘I’m going to go with Noodles because this is so valuable.’”

75% of team members who use Even feel better about Noodles as their employer

By offering Instapay through Even, Noodles gives team members early access to their wages when they need it. Since the partnership with Even began in 2019, team members have accessed $8M in early wages. Benefits like Instapay and automatic savings are why three-quarters (78%) of Noodles team members who use Even say it has made a broad positive impact on their financial health.

“It's one of the most important benefits for our teams because it allows them more freedom. If they need to buy diapers or gas or food, they can have early wage access when they need it,” Jennifer said.

37% adoption rate for financial benefits

A 37% adoption rate for Even “shows that financial benefits are definitely something we need,” Darcy said. And because Even is one of Noodles’ higher-elected benefits, it positively impacts costs.

“With high participation rates, the cost per participant is very manageable versus some of the other benefits that we offer. When you look at bang for your buck, the team members want it and it's not that expensive,” Jennilee said.

That value shows up in hiring, too. “It's a game changer for our recruiting team, too. When candidates look at other jobs, the benefits Noodles offers help them make the choice, ‘I'm going to go with Noodles because this is so valuable,’" Jennifer said.

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Starting in 2023, Noodles & Company plans to grow 10% annually from its base of 460 restaurants. The #LifeatNoodles program will be key to realizing growth. By offering one of the most competitive benefits packages in the restaurant industry, Noodles can recruit and retain the talent it needs to enter new markets.

Noodles’ financial benefits also give it new data to evolve #LifeatNoodles. By studying the usage of Instapay, automatic savings, and other parts of Even, Noodles can find opportunities to act on. An example: emphasizing savings as much as Instapay in recruiting and onboarding.

“One of the things that’s stuck out is the importance of savings, because I think we knew the Instapay piece would be well-received. It's important for us to continue to highlight in our recruiting efforts that this is available to people,” Darcy said.

Curious how financial wellness benefits can help your company improve recruiting and retention? Take a tour of the Even financial benefits platform.