Bill Kerr: Welcome to the Managing the Future of Work podcast from Harvard Business School, I’m your host, Bill Kerr. This episode is one of a series of special dispatches on the sweeping effect that Covid-19 is having on society, the economy, and the future of work. In addition to our regular podcast episodes, we’ll be bringing you shorter and more frequent interviews with business leaders, policy makers, and leading scholars on the coronavirus.

Covid-19 has been especially hard on the hospitality sector. Job losses and business failures have piled up at an alarming rate, and these economic losses can have devastating consequences for marginalized workers who don’t have much financial security. Social entrepreneur, Joe DeLoss, is founder and CEO of Hot Chicken Takeover, an Ohio-based restaurant chain. The majority of his company staff is comprised of workers who were previously incarcerated, suffered addiction, or were homeless. Joe’s approach to HR emphasizes wraparound support for his employees alongside clear expectations. Throughout the pandemic, Joe has stood by his employees, even while having to reduce hours. He’s continued to offer benefits while helping to maintain income through private and public means. His company has produced a “stability guide,” an employee manual of sorts for navigating the crisis. Joe is a previous guest of this podcast and joins us again to talk about the trying times. Welcome back, Joe.

Joe DeLoss: Thanks for having me, Bill.

Kerr: Joe, let’s begin with the restaurant side of your work. How has Hot Chicken Takeover approached the dislocation that Covid-19 is causing, both in terms of operations and staffing?

DeLoss: First, I’ll address the operations piece. Our brand has taken a pretty conservative approach—and cautious approach—to what’s happening in the world. And so, at the onset of the crisis, we made a choice—actually seeing larger volumes for some of our restaurants that were more residentially based to seeing volumes that we couldn’t safely support, given our old operating procedures and having staff too close in proximity to one another while they’re pushing out that volume. And so, with that in mind, we chose operationally to back off and close down completely and really take the downtime to adapt and innovate our business strategy to accommodate what was happening in the broader community. On the staffing side, we were a business that started with the only goal of creating jobs and meaningful employment for a group of people we care passionately about. And so, with that in mind, we knew this crisis and the decision we made to close down would have to be grounded around how we could best support our team. And so we jumped into action to create the stability guide you mentioned, but also to build a strategy to ensure that our team members could have continuity of stability in the best way possible through the crisis, because ultimately we knew we wanted them to come back and to be safe and healthy in our environment, but also to be part of a business that was still postured to grow, albeit in a different way than we had previously.

Kerr: Joe, as we record this—this is getting into the second half of May—what’s the particular timeline for Hot Chicken Takeover and the Ohio operations to reopen?

DeLoss: Yeah, so slowly our community is being allowed to reopen—and so with dine-in restaurant service likely to commence here later in the month of May in the state of Ohio, where all of our restaurants are. And so our approach is to get particularly good at operating with a limited service that does not include dine-in as our primary priority. And so that’s adapting our model to really instill convenience, comfort, and safety for our guests as the top priority before really prioritizing how our hospitality adapts to dine-in, post-Covid.

Kerr: I know, Joe, having been in a couple of your restaurants, how important that dine-in experience is in the ambience you’ve created. So I know that that’s a difficult transition or change to make. As states start to reopen, as your business starts to reopen, of course, there’s so much uncertainty about what’s going to lie ahead. How are you, as CEO, preparing Hot Chicken Takeover for that?

DeLoss: Hot Chicken Takeover is really taking an approach to reopening, as well as what the near-term—12 to 18 months—looks like for a brand, of becoming the best we can at executing in this limited environment, and ultimately knowing that, beyond what happens in this near term, consumer behavior is likely to be permanently shifted. And so our approach is to remain cautious and to prioritize comfort and confidence and convenience for all of our customers. What that looks like for us is leaning heavily and innovating heavily on adapting our hospitality—and even the way we package our food and staff our restaurants—to be aligned for anywhere from 12 to 24 months of this uncertainty. Because we care so deeply about building jobs, our goal is to maintain 100 percent or greater of our restaurant volumes so that we can continue supporting the team in the way that we were prior to Covid-19.

Kerr: Maybe it’s a good chance for us to transition to talk about that team. Some of our listeners for this particular podcast may not have heard of fair-chance practices. So can you, first off, give us that refresher about what were the key aspects of your HR model? And, in particular, also do you think of it as a charity or as more of a business case?

DeLoss: Great question, Bill. The name, “fair-chance employment,” is generally defined as being an employer that will provide opportunities to men and women who’ve been affected by incarceration in the broader criminal justice system. We take that name and think a little broader even than that, to really think about being an employer of choice for men and women that have faced significant adversity in their past. To your intro, that adversity might be tied to addiction or experiences of homelessness or incarceration. But we generally acknowledge all of those as symptoms of adversity and circumstances that can really set somebody back on the trajectory they would otherwise intend to be in life. And so this model is something I’ve been working on as an entrepreneur and as CEO in a variety of different businesses for over 10 years at this point, but Hot Chicken Takeover specifically has been around for six years. The objective of this brand is to really demonstrate that being a fair-chance employer—being an employer of choice for men and women that have had adversity in their life—is far from charitable but, in fact, a significant competitive advantage to a business model.

Kerr: Can you tell for our listeners just what share of your employee base has had some of these struggles beforehand?

DeLoss: The majority of our team, probably upwards of 80 percent, have faced significant adversity in the past. Specific to incarceration—in that more-true definition of fair-chance employment—is usually floating between 50 and 60 percent of our team.

Kerr: And you’ve had even some of your key now business executives come up through fair-chance practices. Joe, one of the reasons that we find wanting to talk with you today in this Covid dispatch was not just about the hospitality sector and restaurants and their particular challenges, but also to understand and appreciate that Covid-19 and this displacement has not impacted people equally. And for those that were at this very edge of financial security—and I think it’s some staggering number of what the job losses have been for those that are earning less than $40,000 a year—this can be particularly damaging. Talk to us about how, with your team member base, what has been your ability to reach out support to them during this particular crisis? And is this worse than some of the other ups and downs that you’ve experienced during your career?

DeLoss: Well, it’s definitely at the peak of the ups and downs that I’ve experienced in my career. Like many people, I’ve never anticipated such an unprecedented universal moment, but actually find a lot of peace and confidence in the fact that we’re all experiencing this together, because it also means that there are a lot of bright minds, much brighter than mine, trying to innovate through this. And so the majority of our team definitely falls into that category you just defined as making less than $40,000 per year. The reality is, many of our team members have faced significant adversity in the past and have a lot of the tenacity and the strength of character to navigate really complicated things. And so our job—whether or not somebody was conventionally considered an employee in those moments or legally, even, considered an employee—was to really be still alongside our community of employees to make sure that they had continuity of income and they had access to the benefits they needed. And so tactically what that looked like for us was, one, making sure that we are an advocate and an educator for our team members. Things like unemployment, things like community aid, are generous in spirit but often very complicated in execution and cumbersome to navigate if you’re somebody that needs to consume those out in the community. And so we took it upon ourselves to become the best expert we could be and to build an internal team of people that could be out there as advocates and allies to our team members that were displaced. The other piece of that puzzle was leveraging some of the existing discretionary money that we would otherwise put into employee benefits and iterating on those systems so that our team members—in the absence of having access to those unemployment benefits as they were working to get through the system—that we could create some small amounts of discretionary cash to invest in them. And so we took what used to be a matched savings program that was always focused on forward movement and investments in transportation or education or housing, and we immediately turned it into a crisis-management fund, that we deployed nearly 100 percent of that cash that we had otherwise accrued immediately into the hands of our employees so that they could get what they needed in the meantime. The last thing I’ll say here is, we also took a tack that we needed to be very bullish—when every other company was going to be a bear—to build a brand that people could come back to. And so it was, one, about managing their stability during this downtime, but also how do we just adapt to this new normal, however long that lasts, so that we can be a place that can start employing people again. Thankfully, our brand was already postured to adapt really well to the new environment and the change in community and customer preferences.

Kerr: It’s interesting you phrased it that way. If I think about your approach to fair-chance hiring, one could—in a very crude and not-meaning-to-be-too-shorthand way—you found a great opportunity in the midst of a group that many people would have shied away from hiring. In this particular case, you’re also saying that, for the crisis itself, this was an opportunity for you to, again, lean against the wind and pick up some greater brand recognition and opportunity.

DeLoss: That’s exactly right, Bill. Yeah, the reality is our community was immediately in need. And rather than shuttering our doors, we leaned in to some broad community efforts of feeding people that were at risk—and that was displaced hospitality workers, frontline medical workers, and folks that were facing food insecurity before this crisis that, of course, became pronounced. And so that got some of our team members back to work really quickly. We actually led a crowdfunding initiative with a lot of our peer restaurants and other beloved brands here in central Ohio to use our fanfare to finance and subsidize some restaurants to get back to some activity. And so those types of efforts kept us relevant in the press, which was meaningful and demonstrated the values of our companies—pre-Covid, during Covid. But the reality through this and through unemployment rates anticipated to skyrocket, the particular group of people that we target for our workforce are definitely at more risk. I feel a decent amount of anxiety about that just as an advocate for the space. But what happens when the market gets flooded with displaced white-collar workers who are willing to work in food and beverage jobs is, a lot of brands are going to feel opportunistic about leveraging the type of talent that they previously didn’t have access to. That puts many of these hidden workers—with a tremendous amount of unconscious bias already working against them—to the bottom of the candidate pool. I fear for the broader community that this is a significant loss and a big mistake, generally, because as those recently displaced, potentially higher-perceived-capacity candidates get into positions, they’re going to be equally transient and not invested long term in the strength of our industry. And so we’re leaning in heavier than ever into our fair-chance labor strategy, because we believe it will build the most defensible loyal team we can. I’m trying to find ways to do that and encourage at-scale for other employers to do it, because I don’t think the answer is building a short-term transient workforce, no matter how much capacity you believe they have. Though I will be opportunistic about real estate, opportunistic about investment opportunities, we won’t be opportunistic about human beings, and just don’t think that will work out in the favor of any brand.

Kerr: Yeah, in many ways it just goes back to the business case or the premise of your particular approach to fair-chance practices, in that, for our listeners, you may spend an extra $1,000, $2,000 a year or something like that into these wraparound support services, but you’re able to take a turnover rate that can be 150 percent per year in the industry space and take that down by two-thirds. It’s like the question about, if you’re suddenly now bringing in people that will be more transient, they look great, but they’re going to be waiting for that next opportunity to jump ship. Your model would be, again, leaning toward, “Let me find those workers that can be with me for a long time and focus on giving them the support that they need.”

DeLoss: Correct. And anecdotally, in real time something I can share that proves this point even further, we’ve begun to recall our team as we reopened restaurants. For full context, in our industry, when you’re thinking of a team member that’s making less than $15 an hour, for many of our team members, the combination of maximum unemployment and the additional $600 federal stimulus of unemployment will mean that, for many in our segment, people are making two to three times their normal weekly take-home. And so you have employers out there who are trying to recall team members, and frankly, it’s just not in the best economic interest of a team member to lose money alongside such global uncertainty to come back to work. As we’ve been working to recall our team members, we’ve had less than 5 percent of our team members decline their recall because they were eager to get back on our team. If I could ever qualify the value of loyalty, being the type of employer we intend to be, we felt it immediately when those phone calls started happening. We’re not an employer that has any judgment about people choosing to stay home and economically support their family, because we understand the math and we understand the uncertainty that they’ve faced in the past and understand their decision. But that was not the decision of our team, and our business will be better for that through this.

Kerr: Well, that 5 percent is amazing, and it does go to your broader theme of, some people question whether fair-chance practices were really only so viable when the unemployment rate was at 4 percent, but you’re showing the model can continue and be vibrant even when unfortunately the unemployment rate is much higher. Joe, we mentioned earlier, and you’ve alluded to it a little bit, of your stability guide, your employee handbook. Tell us about what you’ve built into it and how some of the team members have responded to it.

DeLoss: When all of this went down, we knew that there would be a tremendous amount of information flooding the market, both on economic relief efforts, community efforts, you name it. If you remember back to the early days, the amount of misinformation that was floating around was really wild. And so what we decided to do is really build an internal webpage for our team members that could be their one-stop shop to resources in the community, as well as within our company, that could be of benefit to them as they fought for stability. And so that website, as well as a physical document that they could access—that we called this “HCT Stability Guide”—had everything to do with accessing their paycheck, accessing their healthcare benefits, some of those traditional things that would have otherwise been disrupted, as well as aligned with the types of needs they might meet in the community in terms of resources. And so it became a one-stop shop where we could aggregate information that we can know would be beneficial to our team members, and to be an advocate for them through that trying moment.

Kerr: Joe, if I gave you the chance to—and you obviously have opportunities like this, but maybe to share with us on the podcast—to sit down with the HR director of Chick-fil-A or Chipotle or some other fast-casual chain, or to be thinking even about the retail sector, like Walmart and so forth, what are some of the things you would most want to share with them or the insights you would want to give?

DeLoss: I believe particular to these segments that you’re mentioning—which the unifying factor is probably wage point and candidate pool—and so when you think of those really entry-level retail, manufacturing, logistics-type jobs, you’re hiring and targeting conventionally a group of men and women in the community that have had a lot of insecurity in their life, and a lot of instability. We believe that instability is often tied to an absence of resources, of education, of support that truly give people upward mobility. As employers, I think it’s really critical, particularly in this segment, for people to understand who they’re hiring and what they’re up against in the community. Unfortunately, what often happens, our HR directors or leaders are thinking of the nature of their workforce through the lens of their own white-collar, middle-income, middle-class, professional work environment. Often with that comes a significant amount of unconscious bias that is really aligned with this idea that the American dream is alive and well, and that everybody should pull themselves up by their bootstraps and have an opportunity to move forward. The reality is that many of the folks that have joined our team are two to three generations deep in a pretty complicated situation. And investments in their personal stability will directly translate to professional stability and professional mobility and improvement in contribution to the work environment. We continue to hang our flag on that pole and believe that, if employers can improve and invest in the personal stability of their team and to be alongside of them as team members make those investments in themselves, that it will reap really tremendous professional benefits.

Kerr: Joe, maybe bringing it also a little bit more back down to earth, for those of us that aren’t HR directors of large organizations with thousands of entry-level workers coming in, what would you point to as the ways to help some of these communities that are so deeply affected by Covid-19 in such sharp ways that many of the more middle-class and upper-class occupations don’t experience?

DeLoss: I can answer this question probably best as a human being and less as a CEO. But I think that the most critical thing when you’re considering supporting at-risk groups of people or people that have been particularly affected by this crisis is to not treat them as “others,” to not treat them as marginalized, and to not treat them with sympathetic hands that really take away their pride and spirit as people that have a tremendous amount to offer and that have been more tenacious than many of us have ever demonstrated in our lives. And so for me, it’s really about building mutual relationships and understanding what people believe they need to be the most successful, not to attribute what you believe they need to be successful or to offer support with conditions or a charitable mindset. And so what’s made our business strong is that our people are strong. And we do our best to be alongside of them and honor that strength and honor that character and to really roll with what they’re communicating to us. Our team knows best. And I believe these folks that are the most disrupted by that, if we can do our best to listen and understand as people with resources and maybe access to capital or innovation, that we’re going to come out with better answers if we do it together and not out of a sympathetic charity or objectifying a group of people that need our help or some nonsense like that.

Kerr: Joe DeLoss is the founder and CEO of Hot Chicken Takeover, which in addition to having excellent Nashville-style chicken is also doing a lot of great social good. Joe, thanks for joining us to both talk about the challenges of running a restaurant right now and then also how we can all help out our communities even more in the trying times ahead. Thanks.

DeLoss: Thank you.

Kerr: Thank you for listening to this special episode of the Managing the Future of Work podcast. To find out more about our project on the future of work and for more information on the coronavirus’s impact, visit our website at hbs.edu/managing-the-future-of-work and sign up for our newsletter.