Several years ago, Paul Phillips found himself in a tough spot. His home needed critical repairs, but he had no bank account, no credit card, and, because he owed money to the IRS, no credit to secure a home-equity loan.
He did, however, work for Rhino Foods, an innovative manufacturer of ice cream ingredients based in Vermont, where the Rhino Foods Income Advance Program had just been launched. This latest in a long line of initiatives at Rhino advanced the company’s core purpose: to impact the manner in which business is done, starting by building strong relationships with employees and their families through mutual trust and respect.
Ted Castle, Rhino Foods founder and president, knew Paul’s scenario well. For employees living paycheck to paycheck, even life’s small mishaps could mean loss of work. Furnaces, plumbing, and cars broke down, and with no money for repairs and no credit to get short-term loans, employees might not make it to work. “We were losing some of our best people,” he says. “So we decided to do something about it. It’s one thing to hang a sign on the wall saying ‘our employees are our most valuable asset’; it’s another to prove it by helping to solve their problems.”
Inspired by a United Way training session, Ted and his HR team worked with the local North Country Credit Union to develop the Rhino Foods Income Advance Program. Participating employees get the money they need immediately and pay off their loans in small, weekly payroll deductions (between $25 and $50). In the process, they build credit. Once the loan is paid off, employees can choose to continue paying the deductions into a savings account. The program is designed for savings by default – borrowers have to opt out of the automatic deductions for savings. Having already adjusted to those weekly deductions, most do not. So employees build both credit and savings – creating the first nest egg or financial cushion some have ever had.
Since its launch in 2008, the program has generated 328 loans for a total of $306,000. Each dollar is a life raft.
“It’s a way of letting employees know we respect and value them as individuals and want them working here,” says Ted. “And it works. Our employees trust us and stay with us. They’re attending our financial literacy courses and creating better lives for themselves and their families.”
Rhino Foods makes bakery-style ingredients – most famously cookie dough for Ben & Jerry’s and other ice cream purveyors – and remains the No. 1 producer of cookie dough for ice cream. The company started as a small ice cream shop that Ted and his wife, Anne, opened while he was an assistant hockey coach at the University of Vermont. The two worked 12-hour days, often making less than $100 in sales. When they shifted their focus to wholesale, the business started to grow.
“In 1991, Ben & Jerry’s asked us to do something that had never been done before: put cookie dough in ice cream,” Ted says. “As most people probably know by now, we figured it out.”
What most people don’t know is that Ted and his team at Rhino have since figured out a whole lot more, including how to improve the business by improving the lives of those who work there.
Making Cookie Dough: About More Than Just ‘Making Dough’
For 30 years, Rhino has been on a mission to do both well and good. The purpose of the company is not only to delight customers with great products and to forge meaningful and mutually profitable partnerships with customers and suppliers, but to actually make everyone’s life sweeter on many levels. By developing the creative workplace practices that solve real-life problems for its employees and community, Rhino is creating a blueprint for companies nationwide. Rhino’s 135 employees will tell you it all starts with Ted (though he, in turn, credits his employees with many of the very best ideas).
A reluctant businessman, Ted admits he fell into entrepreneurism. “I didn’t study business and I never saw myself as a businessman. Hockey and coaching were my real passions,” he says. “But when I decided to bring what I loved about coaching into my business, everything just clicked. I started setting higher expectations for myself, for our employees, and the company, actively seeking ways to help us all reach our potential.”
The ‘Inside-Out’ Principle
His aim is to change the way business is done, in part by creating an atmosphere of caring and involvement that spreads from inside to outside the company – something he calls his “inside-out” principle.
“Initiatives like the Rhino Foods Income Advance Program help our employees bring their best selves to work.” Ted says, “We know what we do at Rhino impacts people’s lives at home. We also know that what happens outside work influences people’s ability to come to work and do a good job. This is one aspect of working from the inside out. Then we see how our work practices inside our company can create waves of change across our community and beyond.”
The Rhino experiments make solid business sense. In the three years immediately following the launch of the Rhino Foods Income Advance Program, the company’s retention rate jumped from 61 to 85 percent, where it has remained steady over the past five years.
The “Rhino Way” of doing business is having a ripple effect. Today, more than 30 businesses and five credit unions in Vermont have adopted the Rhino Foods Income Advance Program. If adopted on a broader scale, this program has the potential to solve a huge nationwide problem. According to a recent survey from Bankrate.com, 63 percent of Americans don’t have enough savings to cover a $500 emergency. Many also lack access to credit. So, for a majority of U.S. workers, employer-sponsored programs like Rhino’s could make life a whole lot sweeter.
For Paul Phillips, A Life-Changer
“My first income advance not only helped me make repairs to my house,” he says. “It was the beginning of my credit comeback.”
Paul eventually paid off the IRS, but continued to take Rhino Foods Income Advances just to build credit. “Five years ago, my car broke down. I applied for a loan and was approved. It was the first time I’d ever bought a new car.”
A year and a half ago, Paul was also approved for a mortgage on a new home for himself and his daughter, son-in-law and two granddaughters. “My credit score has risen sharply, and I had enough savings for a down payment,” he says. “My entire life is changed. It’s a whole new world for me.”
To learn more about the Rhino Foods Income Advance Program and the company’s other innovative workplace practices, go to rhinofoods.com. Look for Part 2 of this series on Rhino Foods in the upcoming Winter issue of B Magazine, on newsstands December 13.