Stop Hoping Employee Turnover Will Go Down and Do Something About It Right Now

Say you began the year with 500 employees. By December 31, 365 of those employees will have churned out. Left. Quit. Moved on. This is because, according to the United States Bureau of Labor Statistics’ the annual employee turnover rate in the restaurants and accommodations sector was 73 percent. It’s even worse in the QSR space where, according to Cornell’s School of Hotel Administration, “employee turnover is typically in excess of 120 percent.”

Turnover will always be a part of the restaurant game, but you can do something about it.

Some of that can be ascribed to the nature of the beast: few people are interested in serving, bartending, hosting or bussing their whole lives, or even a few years. Restaurant jobs are inherently short. But it’s jaw-dropping to acknowledge that such a massive percentage of the restaurant labor force turns over within 12 months of starting a job.

Sure, most of these lost employees aren’t high cost. They’re hourly, with some making most of their income on tips. But the real cost lies in replacement. Cobbling together time spent hiring, HR resources, lost revenue, replacing a single hourly worker can cost thousands. 

But keeping them around even just a few months longer can reduce that loss. 

To date, most retention strategies have focused on qualitative things like employee engagement, improved onboarding and feedback. Those are all worthy pursuits, but what about the quantitative side? What about what matters most? What about money?

From Psychology Today: “Research shows that income has a positive relationship with happiness (life satisfaction)… As income increases, its added contribution to life satisfaction becomes smaller. The impact of additional income is greatest among those who have little money, but it does not stop mattering, even after someone is able to meet basic needs.”

In emoji speak: money = 😀.

While companies such as Amazon lead the charge in raising hourly wages, offering $15 an hour isn’t realistic for small and mid-sized restaurant groups. 

So if more money makes for happier employees and happier employees stick around longer but boosting pay in a meaningful way isn’t possible, what do we do? 

We turn to tech. 

There are a number of startups developing innovative new technologies designed to positively impact employees’ wallets. Take Even for example. The app that allows employees to get paid before payday partnered with Walmart to help hourly workers “access a portion of wages for hours they have already worked.” That’s an incredible way of addressing gaps in cash flow that most working families feel every month. Workforce management system, Shyft, gives employees the ability to trade shifts and thus ease scheduling tensions. Alice makes it easy for employees to keep more of what they earn by automating pretax spending on things like subway passes, bus fare, parking, eyeglasses, prescriptions and daycare. (Full transparency: I work at Alice.)

A common thread amongst these technologies is a fresh approach to delivery. Benefits and shift scheduling and advances used to happen in meetings where HR teams had to lure folks with almost-stale donuts. That’s not how today’s employee functions and it’s certainly not how today’s restaurant worker operates. In the restaurant world, everyone is rushed. There’s no time for meetings, forms or mental math. So to drive adoption, tech companies are reducing the friction, primarily delivering their services in ways your employees prefer: on their phones. Some even go a step further and deliver their solution where employees spend the most phone time (Think: texting.) 

Employee turnover will always be a part of the restaurant game, but you can do something about it. You can implement simple, easy-to-use technologies that positively impact your employees’ wallets. When that happens, your employees worry less. They’re happier at work. They stick around longer.