Chipotle CEO Brian Niccol is betting that revamping the employee experience is the fast-casual chain's ticket to success
Brian Niccol's New Year's resolution is to bump Chipotle's internal-promotion rate — the rate of how many current staffers fill open jobs — to 95%.
Niccol became the $40 billion fast-casual chain's CEO in 2018. He's convinced that making his more than 60,000 employees feel valued — and showing them available career paths — will lead to more satisfied customers who spend more money.
"We always start with, 'Hey, how can we make the experience better for our customer? How can we make the experience better for our employees?'" Niccol told Insider. "If we do those things, we'll continue to grow."
Chipotle's internal-promotion rate was 90% in 2021, according to QSR magazine. But turnover for apprentice, general manager, and restaurateur — what Chipotle calls its top-performing managers — hit 43% after dipping to 31% in 2020, QSR reported. Part of the increase in turnover is likely attributable to overall labor-market conditions in 2021. The number of fast-food workers changing jobs surged in 2021 as restaurant chains struggled to meet a spike in demand. This gave employees the leverage to work, essentially, wherever they wanted.
Still, Niccol wants to ensure that Chipotle is a great place to work. The way he sees it, employees' experiences chopping vegetables, bagging delivery orders, and cleaning their work stations is directly related to customer satisfaction.
These efforts appear to be paying off. In the third quarter of 2022, Chipotle's revenue increased by 13.7% to $2.2 billion and its sales at restaurants open at least a year grew by 7.6%.
"When we think differently, from a food-with-integrity standpoint, and then give you the access and speed that you want, it's a winning proposition," Niccol said.
Expanding Chipotle's digital presence
Niccol, who is 48 years old, launched his career in brand management at Procter & Gamble before spending about 13 years with the fast-food corporation Yum Brands. Most recently, he served as the CEO of Yum Brands' Taco Bell division. Niccol wrote in the Harvard Business Review that he started considering the opportunity to run Chipotle in 2017, when he saw a news report that the chain was looking for a new leader after the company faced a series of E. coli and salmonella outbreaks in 2015.
Since taking the helm, Niccol has led Chipotle's digital transformation. The chain hit 3,000 store locations this year; Niccol's long-term goal for the company is 7,000 locations in North America.
Digital sales made up 9% of total sales when Niccol joined. They now make up about 37% of revenue from food-and-beverage sales.
The 500th Chipotlane, which allows customers to order online and pick up their food at a walk-up or drive-up window, opened in November. Chippy, a robot that makes tortilla chips, began serving guests in California in October.
Prioritizing improvements to the worker experience
Under Niccol's leadership, Chipotle has raised employees' wages and helped workers pursue a range of academic degrees, debt-free.
Still, there has been some discord. In August, workers at a Chipotle store in Lansing, Michigan, formed the first union at the company, the Washington Post reported. Among the primary goals were higher wages. In a statement to Insider, Chipotle said it was "disappointed" that those employees "chose to have a third party speak on their behalf" and pointed to benefits such as competitive wages, quarterly bonuses, and tuition reimbursement.
Niccol said he wants to help every Chipotle employee connect to the company's mission. "As our company gets bigger, you want people to share the purpose and values, so that they make the decisions consistently if you are in the room or if you aren't in the room," Niccol said.
He often visits Chipotle locations and speaks with staff while they're working. He might tell a line cook, for example, "You know that jalapeño pepper you're chopping came from a young farmer's farm."
Chipotle has recently been experimenting with some technologies to make the workday easier for employees, such as a new kitchen-management system that uses artificial intelligence and machine learning to predict how much food to prepare and when to start cooking it.
But Niccol sees the employee proposition at Chipotle as simple: We're serving high-quality food and we're giving you a place to grow your career. "When you do those two things together, you end up with a really strong culture, really great people," he said.