Panera bread loses about 100 percent of its workers every year, and according to Panera CFO Michael Bufano, that’s not unusual for the fast food industry. While the Bureau of Labor Statistics estimates that the turnover rate for the restaurant sector hovers around 82 percent, industry estimates are higher, with some restaurant chains experiencing a rate of 130 percent.
The high turnover rate is one of the industry's top challenges because turnover is expensive. The National Restaurant Association estimates the turnover cost to be $2,000 per employee. In the past, high turnover was considered an unavoidable part of running a fast food restaurant, but that’s no longer the case. Companies are realizing that replacing their entire workforce every year is an unsupportable and unnecessary cost. Over the past few years, major chains have invested in creative and innovative efforts aimed at improving retention.
Companies are realizing that replacing their entire workforce every year is an unsupportable and unnecessary cost.
Chipotle, for instance, recently rolled out a new perk which gives hourly employees the opportunity to earn up to an extra month’s pay each year. Starbucks, which has one of the lowest turnover rates in the industry, is known for offering competitive benefits, such as tuition reimbursement and health coverage. Pal’s Sudden Service, a fast food chain in northeast Tennessee and southwest Virginia, keeps turnover low by investing heavily in training and certification in an ongoing way, so employees are constantly learning.
Programs like these are designed to incentivize employees to stick around, to engage them in their work, and to strengthen the relationship between employer and employee. However, while desirable benefits and training programs can help restaurants boost retention, these perks only go so far if employees aren’t aware of them. There is no greater investment in improving engagement and reducing turnover than employee communication.
Burnishing Brand Image
Campaigns to reduce turnover can begin before an employee’s first day on the job. Companies should invest in building and reinforcing their brand proposition so that before an employee even steps through the door, they already feel a connection to their employer. Conversely, a negative brand proposition can lead to churn. McDonald’s experienced this with the term “McJobs,” which became shorthand for an unstimulating, low-paid, dead-end job.
Employees want to feel like they work for an organization they are proud of, whose values they share. Making employees feel like they are part of an “extraordinary work environment” will motivate them to engage more deeply with their job and be satisfied in their role. Media is a powerful way for fast food companies to burnish their reputation. For instance, making a short documentary about a company’s history or a web series that showcases the ways the company gives back to the community can go a long way towards cultivating a positive reputation among potential and existing employees alike.
Another way to build pride in an organization is to highlight specific employees once or twice a month. This not only motivates workers to do their best work, but also demonstrates that the company values their contributions and cares about who they are outside of work. Furthermore, it provides a way for employees to get to know each other better and identify things they share in common, whether that’s how many kids they have or a favorite hobby. Recognizing employees in this way strengthens the sense of team, identity, and belonging, which is a critical part of employee engagement, regardless of industry.
Secondly, fast food companies can use communication to reduce turnover by thinking about onboarding as an ongoing process. Onboarding doesn’t just happen on day one or week one. In a company like Panera, which has hundreds of thousands of employees and cycles through thousands a week, HR departments have no choice but to be reactive and focus on the people who were just hired. It’s hard to keep up and easy to fall behind, so the disengagement of employees starts within that first month.
But suppose a company was committed to onboarding after 30 days, 60 days, and 90 days? Employees should receive communication and check-ins from the company on a consistent, ongoing basis. The information or resources an employee needs after three months are distinct from what they needed when they started, and by keeping those lines of communication open, HR can ensure employees feel cared for, valued, and that they are progressing.
Make it Bite-Sized and Make it Personal
A third strategy for reducing turnover is to communicate with employees in the ways they communicate outside of work. Most fast food workers are young and digitally savvy. They are used to accessing information on-demand and receiving messages that are personalized to them.
Younger generations also place a premium on being masters of their own time and attention. Employers can enhance communication by delivering content in bite-size chunks (as opposed to day-long PowerPoint presentations) and across multiple channels. They can also personalize content based on employee age, gender, vocation, job title, and role. Rethinking employee communication for the digital age will go a long way towards keeping employees engaged.
Keep it Moving
Finally, fast food companies can optimize their communication strategies by iterating and adapting over time. The most effective communication is a dialogue that goes two-ways, so employees can participate in the process and feel like they are being heard. That feedback and dialogue loop also provides valuable insight to employers about what’s working, and what’s not, so they can make decisions designed for impact. Ultimately, the most valuable insight into what employees want and need for retention and engagement will come from the employees themselves.
The Last Mile
Companies can spend upwards of millions of dollars each year on programs geared towards employee engagement, but the key to success is communicating the value of those programs. Communication is that critical last mile. Innovative perks and robust benefits must be coupled with comprehensive communication strategies that help employees understand and take advantage of those programs.
Whether it’s manager training, college credit access, or teaching employees to use new technology on-the-job, HR should wrap layers of communication around their offerings that make the workplace enticing to hundreds of thousands of employees over the long-term.