The restaurant industry is in rough shape when it comes to common challenges like hiring, training, and retaining staff. Many front of house employees don’t even make it past the three-week mark.
Those of us in the industry know a restaurant can be a very unforgiving, sometimes even toxic, environment to work in. The hours are long, the work is very labor intensive, stress runs high, guests can be overly demanding, and the base pay is downright abysmal. These factors often force remaining restaurant staff members to work double time to account for former coworkers who have yet to be replaced.
Given the seemingly unending employment options job seekers have to choose from in today’s market (seriously, you can make billions off of an Instagram account. We’re looking at you Kylie) it comes as no surprise that existing and potential staff alike are saying “no thanks” to working in the restaurant industry’s pressure cooker environment.
Don’t believe me? The numbers don’t lie: In 2016, the annual employee turnover rate in the “restaurants and accommodations” sector was an astounding 73 percent in 2016, according to The United States Bureau of Labor Statistics’ Job Openings and Labor Turnover Program [JOLTS].
What does a 73 percent employee turnover rate look like? Say you started 2017 with 100 employees. If your restaurant has a 73 percent annual employee turnover rate, 73 of the original 100 employees who began the year working at your business will be gone by years end and hopefully replaced with someone new.
According to a recent study from Cornell’s School of Hotel Administration, The cost of losing and replacing one hourly employee can be as high as $5,864. If your restaurant is maintaining a 73 percent annual employee turnover rate, you’re potentially losing $428,072 or more annually as a result.
Restaurant owners cite staffing is their biggest concern in 2018, reports MarketWatch, and for good reason: Employee turnover is not only an operational nightmare, it’s a hefty financial burden your restaurant can’t afford to shoulder.
You’re not Atlas, after all.
As a restaurant owner, manager, or leader, cutting costs is undoubtedly an ongoing project for you. Consider cutting your restaurant’s annual employee turnover rate your #1 cost saving priority in 2018.
Employee retention isn’t as easy as negotiating with distributors, tracking inventory closely, or staffing down on slow shifts. Luckily, Toast and 7shifts have done the heavy lifting for you.
It’s time, friends, for an industry overhaul. Together we, the restaurant community, can make working in a restaurant an enticing, gainful employment opportunity for prospective and existing employees alike.
The teams from Toast and 7shifts have been hard at work analyzing the reasons why restaurant employees quit at such an alarming rate and coming up with effective, informed solutions that enable restaurant management to empower and retain their staff members.
Together, we can 86 the pesky 73 percent annual employee turnover rate plaguing the restaurant industry with the help of The Employee Retention Playbook: A 30-page game plan created by Toast and and 7shifts, filled with everything you need to know and do to retain and attract staff.
Here’s a glimpse of what’s inside:
First impressions count, especially in the restaurant industry. Welcoming new employees to your team and showing an immediate commitment to focused, high-quality onboarding is the first step toward avoiding an employee retention problem.
Use your first days with new employees to establish your appreciation of and investment in an engaged team. Your continued efforts don’t need be grand for them to resonate with your staff. A restaurant staff with positive morale, bolstered by recognition, rewards, and appreciation, will go a long way in fostering retention.
Why retention is important for your bottom line:
- 47 percent of workers cite lack of recognition and poor company culture as the main reasons for leaving a job.
- The average cost to replace an employee can be as high as $5,864.
- A 25 percent reduction in restaurant staff turnover can save restaurants more than $60,000.
- Communication counts: 81 percent of workers would rather join a company that values open communication over one with a laundry list of fun perks or benefits.
- Increased employee engagement is key when 70 percent of employees are not engaged at work. Companies with engaged employees outperform those with disengaged employees by 202 percent. A lack of engagement can lead to mistakes, low morale, and—ultimately—turnover.
What can a restaurant manager do avoid the restaurant industry’s notoriously high turnover rates? Here are seven actionable ways to turn down turnover and turn up retention.
1. Show Respect for Employee Availability
Establish a firm, monthly deadline for staff to submit/update their availability, ensuring management always has access to the most up-to-date scheduling information. By doing so, you’ll also demonstrate to employees that you respect their outside-of-work commitments when you create a schedule that honors their availability requests.
Your employees will be able to maintain their lifestyle, and you’ll be able to publish the schedule weeks in advance, keeping your restaurant in compliance with local predictive scheduling legislation. With their submitted information at hand, you’ll avoid the reactive practice of “just-in-time” scheduling, which gives employees little or no notice of what their work schedule will be like.
2. Track Hours
Work-life balance is more than corporate jargon; it’s about recognizing and respecting that your employees have a life outside of work.
Showing flexibility and compassion with your employees will pave the way toward growing a more focused and effective team who will bring a sense of purpose and enthusiasm to their work…and stick around for longer.
Reduce the risk of burnout—be aware of how many hours staff are working. Take advantage of your restaurant scheduling software’s notification system to track hours and alert you when a staff member is inching towards overtime hours. Not only will this keep your employees happy, it’ll also keep your labor budget in good shape by dodging costly overtime pay.
3. Map Out a Career Path
When employees have a clear understanding of how they can move up in the organization, they are more likely to stick around to achieve those positions For example, at sandwich chain Jimmy John’s, about 85 percent of the restaurant managers started working for the company as Sandwich Makers and Drivers and received promotions by showing motivation, precision, and an eagerness to grow.
Check in with your employees during your one-on-one meetings to learn what their career ambitions are and what you can do to as a manager to support them. A recent Cornerstone survey drew a connection between low levels of development opportunity and high turnover rates. The takeaway? Develop and invest in employees and you’ll see improved retention.
4. Hire Right the First Time
Be smart about hiring. First, you’ll want to write an excellent job ad to attract the right applicants. When you begin candidate interviews, look beyond the resume and determine how the individual would fit within the current team structure. Consider what traits or skills they have that would be an asset to the collective group and note the idiosyncrasies that might be a poor fit with your team’s culture and company values.
Interview tip: Run mock exercises as part of the interview. Pick a few likely scenarios and have the candidate walk you through how they would handle them. Examples could include:
- How would you interact with an aggressive customer?
- How would you react if you saw a coworker stealing from the cash register?
- What would your process be if you were triple sat?
Cross-training is the practice of training employees to perform tasks and duties outside of their regular roles; it’s a team-building tactic as much as a scheduling tactic. When your employees are able to perform well in a variety of roles, you’ll be left with less role-based scheduling gaps.
When employees are armed with diversified skill sets, they’ll experience a confidence boost that’ll keep them more invested in their jobs and less likely to leave.
5. Be Flexible
If you have staff who work other jobs, go to school, or have other commitments outside of work, allow them to jump on the schedule to take shifts when they have availability. By working with fluctuating schedules and not against them, you’ll avoid having to hire and train new staff to fill shifts or roles. Woodwork bar in Calgary, Alberta, put this tactic into practice and, as a result, they’ve only had to hire only 1 or 2 service staff members a year.
6. Provide Continuous Feedback
Employees always want to know how they’re doing and what they can improve on. Incorporate in-the-moment coaching and regular employee feedback opportunities into your management style to highlight strengths and improve upon challenges.
Remember: Feedback goes both ways; use your regular one-on-one meetings to establish a feedback loop. Encourage staff to share feedback so you can reinforce the good aspects of working in your restaurant that make them want to stick around, and address the things that make them want to leave.
7. Say Thank You!
Politeness matters. Sincerity matters more.
Acknowledging good work is essential to making employees feel like their work matters. 69 percent of employees say they’d work harder if they were better appreciated and recognized, Globoforce found.
When your staff is working hard and doing well, it’s important to recognize and show gratitude for their efforts. These people are helping make your restaurant dreams come true—they deserve recognition when they do an awesome job.
Express your thanks regularly, genuinely, and in a way that suits your restaurant’s culture. You’ll quickly find that taking a second to share a heartfelt “thank you” will reinforce positive, exemplary behavior, and inspire more of it in the rest of your restaurant staff.
A happy, supported, reliable staff is the lifeblood of your restaurant. You could have all the customers in the world, but who would serve them or cook for them if it weren’t for your hard-working employees?
When you make an effort as a manager to show your restaurant staff that they matter to you and the business, you stand a greater chance at retaining them as loyal, trained, talented employees.
Want to learn more effective tips, tricks, and tactics to attract and retain the best talent? Download The Employee Retention Playbook