The food and beverage industry employed more than five million Americans in 2018, according to the United States Bureau of Labor Statistics (BLS). With such a significant portion of the American economy involved in food service, the business health of America’s restaurants can have a significant ripple effect. The BLS also notes that the job outlook for restaurant worker positions is “excellent because many workers leave the occupation each year, resulting in numerous job openings.”
Indeed, a study conducted by the National Restaurant Association found that overall turnover rate in the restaurants-and-accommodations sector was 74.9 percent in 2018. Some restaurants report turnover rates as high as 150 percent.
While perpetual job openings may be encouraging for restaurant industry jobseekers, it can be a point of concerning instability for restaurant owners. To thrive in this labor climate, it is essential that food service employers explore innovative ways to stand out among competitors to recruit and retain sharp, dedicated talent. Here are a few practical, low-cost benefits all restaurant owners can consider implementing to attract strong applicants and give their retention rates a significant boost.
1. Provide Opportunities for Professional Growth
When employees are given opportunities to set and achieve goals, they are more likely to be invested in their job. This could mean providing clear pathways for promotions and leadership opportunities for employees seeking to move up within the business. Listening to employees’ long-term career goals and supporting those who wish to grow within the restaurant encourages engagement and motivates employees to learn new skills, take on new opportunities, and feel a sense of ownership over their role.
While much of the food service industry is made up of students who may not plan to work in the restaurant industry long-term, employers should still make an effort to attract bright young jobseekers and promote their retention. Providing mentorship and cross-training opportunities can be especially valuable for young workers who are actively seeking ways to build out their professional skill sets and experiences. Offering opportunities for their overall professional growth helps encourage sharp, motivated students to stay for a few years while they finish their degrees rather than leave at the end of summer, thereby increasing workforce stability within the restaurant and reducing training costs.
2. Promote Financial Wellness
Financial stress is one of the leading causes of employee turnover. Employees who experience financial stress are more likely to be distracted and disengaged on the job. Employee financial wellness is one of the fastest growing benefit categories, with increasing numbers of employers offering access to holistic financial planning programs, such as savings and budgeting tools and financial literacy materials. Employers have a vested interest in combating financial stress experienced by many hourly workers and are in a unique position to offer employees access to programs that will help maximize their earning power.
According to BLS data, over 50 percent of food and beverage workers are between 16 and 24, compared to just over 33 percent of retail workers and 17 percent of manufacturing workers.
This workforce, who may still be in school or living with their parents, often have different financial wellness needs, goals, and preferences. Today’s youngest workers tend to desire flexibility, immediacy, and easy access when it comes to resources and tools. When developing a financial wellness strategy for these workers, it is essential to seek out integrated, comprehensive financial wellness platforms that give access to multiple resources in one place, rather than a slew of disconnected tools and portals to manage.
For example, businesses who implement PayActiv provide their employees with a single platform that provides instant access to earned wages including tips, financial literacy and counseling materials, bill pay services, and savings tools that help promote healthy financial skills amongst their workers. PayActiv users are able to save in units of time worked, simplifying the savings process and maximizing opportunities to save. For example, an hourly worker could opt to save five minutes a day for to contribute towards necessities and emergencies.
3. Reconsider the Rigid Paycheck Cycle
While sound financial planning is essential for long-term financial wellness, many paycheck-to-paycheck workers are forced to prioritize daily expenses over long-term savings for retirement, emergency funds, and other financial goals. Timing is a major factor for hourly employees and can often make the difference between taking care of daily costs or falling behind. When unexpected emergencies arise halfway through a pay period, workers are often forced to take out high interest payday loans or be hit with late or overdraft fees. According to the Financial Health Network, financially underserved Americans pay $173 billion each year in fees and interest for alternative financial services such as payday loans and credit cards. These can add up to be as much as 5 percent to 10 percent of an individual’s annual income, serving as a form of financial tax that can cripple an employee’s earning power.
To help address this often-ignored issue, employers can provide their employees with access to their earned but unpaid wages in real time, at no cost to the business, and no change in cash flow between pay periods. For example, PayActiv seamlessly integrates into an employer’s benefits package to provide employees with instant access to a holistic financial wellness package and instant access to earned wages for a $5 fee for each two-week pay period used. 81 percent of PayActiv users reported that they were more likely to remain in their current position because of the PayActiv Benefit, according to a recent PayActiv user study.
It is understandable for restaurant owners to feel daunted by the food and beverage industry’s high turnover rates. But with just a few simple, low-cost considerations, all employers have the power to boost employee engagement, attract top-tier talent, and improve retention, thereby strengthening their business long-term.