Why HR Stays a Cost Center Until It Can Show a Number (And what a $10 million swing looks like)

HR stops being a cost center the moment it can put a number in front of the business. At one franchise group that number was a $10 million swing, and it came from three systems that were bought and rolled out, not from hiring more HR staff.

That is the view of Michael Gomez, President of MGI International, LLC, an executive search and HR consulting firm. He has about 30 years in human resources, at AT&T, PepsiCo, The Walt Disney Company and McDonald's Corporation. Most recently he ran HR for a franchise group operating Burger King, Dunkin', Baskin-Robbins, Taco Bell, KFC and Pizza Hut, with roughly 7,000 employees across 23 states.

I built 720 Sweets from one shop to seven locations, then sold it. At Workstream's On the Clock 2026 in Atlanta, I hosted the speaker interviews. Michael's was the one that changed how I talk about HR spending, because he does something most people in his seat never do. He shows the math.

Send every complaint through one system

Most operators handle complaints the same way. Someone raises an issue, a manager writes something down, HR gets pulled in, and everyone hopes it ends there.

Michael's point is that this is not a process. It is a series of reactions, and it takes up most of the week for whoever is closest to it.

So at the franchise group he brought in a dispute resolution platform and made it the route everyone uses. A grievance goes into a portal. The people who handle it are not managers filling in a form.

"These are trained investigators. But as importantly, they're all attorneys."

Michael Gomez

That matters for a practical reason. The people investigating understand the law and the steps an investigation has to follow, so the documentation comes out in the same shape across every brand in the group. It is automated and it is visible. Anyone with access can look at the whole file.

The employee gets a real place to go. The company gets a record that holds up.

The savings show up as hours first, then as dollars

Here is where Michael starts counting, and it is the habit worth copying.

His HR directors told him the system gave each of them back about 400 hours a year. That is time that used to go into chasing complaints and now goes somewhere else.

Then the money. The group measured about $400,000 a year in claim reduction savings. The platform cost him roughly $100,000. So the line he reports is not "we improved employee relations." It is $300,000 net to the bottom line, every year, because the process keeps running.

"Welcome to HR as a business partner."

Michael Gomez

He says that line twice in the conversation, and both times it lands right after a number. That is not an accident. The phrase only works when there is a figure in front of it.

Most of the crew could not afford the benefits

When Michael looked at the benefits his previous company offered, they were good on paper. Almost nobody used them.

"They were great, but 93% of the people weren't using them. And this is the case for many companies."

Michael Gomez

The reason was simple. People could not afford the payroll deduction. So the company was paying to offer something its own crew was quietly opting out of.

What he put in instead was a minimal essential coverage plan built so that it costs the employee nothing out of pocket. If someone passes away, $25,000 goes to their family. An accident that puts them in hospital pays out $1,000. Telemedicine is included for the whole family, with no cap on how many family members.

The plan works by partnering with a nonprofit that offsets the employee's cost. Michael was careful about the structure. He describes the partner as a registered nonprofit, not a looser arrangement set up to save tax. He says it has been running about seven and a half years and has never faced a legal challenge. It is audited by the Department of Labor, and again by the Department of Justice every year. He treats being audited as the selling point, not the risk.

Enrollment is optional and people can leave if they want to. Almost none of them did. He says the participation rate was the highest among the many brands the plan serves.

A benefit is only real if your crew can afford the deduction. Michael's plan costs the employee nothing out of pocket, which is why people actually use it. When payroll and deductions run on one platform you can see what a benefit costs each person before you offer it. Right now there is up to 8 months free on payroll. Explore payroll →

Put a dollar figure on your turnover

This is the part I would tape to the wall.

Michael cites work out of the hospitality management program at Cornell, and his shorthand is that a restaurant's turnover percentage tracks very closely to what that turnover costs. Not loosely. Closely enough to plan against.

Run it on a standard size pizza restaurant. At 150% turnover, he puts the cost at over $140,000 a year for that one store. So if a store is sitting at 250% and you get it down to 150%, you have saved roughly $100,000. In one location.

He did not invent that drop. He benchmarked against another franchise group that had been running the same benefits plan for years and had cut turnover by 100 points or better.

Multiply a saving like that across a few hundred restaurants and it becomes a number the whole company cares about. At his group it came out around $7.5 million.

There is a second saving on top of that. Enrolling everyone in that benefits plan produced about $2.6 million in payroll tax savings. It shows up whether or not turnover changes at all.

"That's a $10 million swing."

Michael Gomez

What AI changed for his general managers

I asked him what people get wrong about AI and frontline work.

His answer started somewhere I did not expect: with fear. People handle change badly when the things they used to be praised for stop counting. He also said mental health has got much worse since the pandemic. To him that is a reason to treat looking after people as real work, not a soft extra.

On the technology itself he is not gloomy. The general managers who got these systems did not feel anything had been taken away from them. Their interviewing changed a bit to fit what the system asked for. They were happy. He saw no negative impact.

He will not promise it stays that way.

"I'm hoping that we remain masters of the machines and not a slave to a robot."

Michael Gomez

And then, more plainly: we have to be mindful of what we are doing, and we have to be the best humans we can be.

What this means if you run 2 locations, not 400

Michael was working with 7,000 people and a budget to match. The method still scales down, because the method is not the software. It is counting.

• Pick the problem that takes up your whole week. For him it was labor complaints. For you it might be no-shows or scheduling. Fix the one that keeps you reacting.
• Price your own turnover before you shop for anything. Take your current turnover rate and Michael's rule that the percentage tracks the cost. Now you know what a 50 point improvement is worth in your store, in dollars.
• Check whether your crew actually uses what you offer. If most of them are opted out, you are paying for a benefit that is doing nothing.
• Count the hours, not just the money. 400 hours a year back is a real result even before anybody saves a dollar.
• Report it like a business line. Cost, saving, net. That sentence is what turns the conversation from expense to investment.

Two locations will not produce a $10 million swing. The same math still works at two locations, and almost nobody does it, which is why HR keeps getting talked about as a cost. For a fuller picture of what one departure costs you, Workstream's breakdown of employee turnover costs is a reasonable place to start.

Frequently Asked Questions

How much does employee turnover actually cost a restaurant?

For a standard size pizza restaurant running 150% turnover, Michael Gomez puts the cost at over $140,000 a year for that single location. His working rule, drawn from hospitality management research at Cornell, is that a restaurant's turnover percentage tracks very closely to what the turnover costs it. That means an operator can estimate the number from a figure they already have rather than commissioning a study.

Can HR savings be measured in real dollars?

Yes, and Michael Gomez argues that HR is treated as a cost center until someone does the measuring. His dispute resolution platform cost about $100,000 a year and produced roughly $400,000 in claim reduction savings, which he reports as $300,000 net. His benefits plan produced about $2.6 million in payroll tax savings. Together with the turnover improvement, he totals the impact at a $10 million swing.

Why do employees not use the benefits their employer offers?

Usually because they cannot afford the payroll deduction, not because the benefits are bad. At one company Michael Gomez reviewed, 93% of employees were not using benefits he describes as genuinely good. The fix was a plan that costs the employee nothing out of pocket. Participation went to the highest level among the brands that plan serves.

What should a small operator fix first in HR?

Fix whatever keeps you reacting, because a reactive week produces no improvement. Michael Gomez's order was to stop the labor issues that arrive without warning, then add the systems that set expectations and look after people. His reasoning is that you cannot build anything while you are constantly responding to the last problem.

Will AI reduce the number of frontline restaurant jobs?

Michael Gomez has not seen it happen in the systems he rolled out. His general managers reported no sense that anything had been taken away, beyond small changes to how they interview. He is careful not to predict the next five years, and frames the goal as staying, in his words, masters of the machines rather than slaves to a robot.

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About the author. Wilson K Lee built 720 Sweets from one shop to seven locations and sold it. He now runs wilsonklee.com, where he publishes real numbers and playbooks for food and beverage owners, and he hosted the speaker interviews at Workstream's On the Clock 2026.