Employee Turnover in Restaurants
As a restaurant owner, one of your biggest headaches is likely employee turnover. But why?
The annual average employee turnover rate is usually around 12-15%, but limited-service restaurants are facing 135%, according to the U.S. Bureau of Labor Statistics, with full-service not fairing much better at 106%.
If there are 1.6 million people seeking jobs, how do you make sure you’re hiring the right employees for your restaurant? And how do you keep them from leaving?
Let’s look at the biggest reasons for high turnover in the industry and discuss what you can do to alleviate the issue for your business.
Whether you like to admit it or not, your biggest issue may be that you’re hiring a lot of teenagers. According to the National Restaurant Association, one-third of working teenagers are employed in the restaurant industry.
Age isn’t necessarily the issue though, since some teens can be more dedicated and stay around longer than their peers or even some of your older employees – the real issue is commitment.
Most teens are unlikely to stick around at their first job because they view the position as unimportant and easy to quit, they aren’t ready to handle the demands of a full-time job, or they simply never planned to stay once summer break is over.
Unfortunately, the same can be said for some adults.
And if you’re hiring high school or college students for part-time work with the expectation that they’ll leave after a few months – STOP! You’re just throwing away money.
Between productivity loss, recruiting costs, orientation, and training, the cost of employee turnover averages at $5,864, according to the Center of Hospitality Research at Cornell University.
If you aren’t taking the commitment level of your staff into account, you’ve already set yourself up for headaches. How do you measure commitment during the interview process? Use the STAR method.
STAR stands for: Situation, Task, Action and Result. Ask questions that prompt candidates to describe a situation where they were responsible for a task or decision, how they acted in completing that task or making that decision, and how they handled the result.
- Can you tell me about a mistake you made on the job and how you handled it?
- Can you describe a time you went above and beyond to delight a guest?
- How have you handled issues with coworkers in the past?
You can also find great points on how to hire the best staff for your restaurant in this article by OpenTable.
Hours & Pay
Likely the hottest subject for any news outlet or blog that covers the restaurant industry is minimum wage and earning a “living wage.”
Rehiring or hiring new staff at a higher wage can be a complicated process, and if you’re not using a payroll service or you’re looking for a better option, Navrae can provide you with a hassle-free payroll service built specifically for restaurants.
Though many restaurants are offering hiring incentives and hourly wages above minimum wage (a 10% increase YOY) restaurant workers are leaving the industry to receive higher pay or access to a more consistent schedule and income, according to a report by Black Box Intelligence.
If keeping up with the local competition isn’t enough, how do you ensure your restaurant can attract and keep the best talent?
It may seem ironic since restaurant workers also want more consistent schedules, but offering flexibility in work schedules is a high-selling point for the more than one-third of food service workers who are parents.
Lack of childcare is the top reason McDonald’s workers leave, according to the company’s EVP and Chief Global Impact Officer.
Many restaurant owners are turning to automation technology and outsourcing payroll, accounting, and invoice management to cut overhead costs, so they can afford higher wages for their employees.
Navrae offers a managed payroll service to help your organization cut down on major overhead costs from payroll, so you can afford a higher, consistent paycheck for your employees – with less headache for you!
Small business owners spend about 5 hours every pay period (that’s 21 days a year!) just calculating payroll taxes, but with centralized service and a team processing all of your payroll needs for you, you save time and money on:
- Software costs and fees
- Paying a back-office employee $21-27 an hour to process your payroll
- Supplies to print and mail checks
- Reprinting checks when a check is lost or delivered to the wrong address
- Easily pay employees of all types (salary, hourly, part-time, or gig workers) at all of your restaurants
- Let employees update their own information and request pay stubs through an online self-service portal
We also provide accounting and invoice management solutions specifically designed for the restaurant industry to help you ditch your outdated, insecure, and inefficient way of handling your business finances.
Training & Growth
If lack of commitment and low pay are the biggest factors in restaurant workers quitting, lack of training and growth opportunities is the nail in the coffin.
According to research by Talent LMS, 62% of restaurant workers said a lack of training would make them leave their company. What makes them want to stay? More pay, more chances to move up within the company, and more training for their role, the survey reported.
No dishwasher has ever wanted to keep washing dishes forever. Employees in every industry value growth opportunities, and restaurant workers are no different.
Whether you start a mentorship program, provide advice during staff meetings, or provide tricks on how to increase their tips, the effort shows you’re committed to their success as much as you want them to be committed to the restaurant’s success.
In the Talent LMS survey, 70% of employees in customer-facing roles said they had received zero customer service training, and the type of training respondents wanted most was training for a promotion.
The saying “employees don’t leave bad jobs, they leave bad managers” exists for a reason. It’s much cheaper to replace one manager than to replace several employees who leave because of management disputes.
Again, are you training your managers properly in executing your strategy and achieving your goals for your restaurant?
Of the eight reasons for high turnover Harver lists in their article, six can be attributed to poor training and bad management.
Building the right “kitchen culture” starts with competent and personable management, who can execute your strategy to reach your goals. If you’ve focused on employees who are committed to your hiring process, you’ve found capable employees who just need the right training to do their job better and take a larger role.
Though restaurant employee turnover can’t be eliminated, recognizing the causes and taking the right steps to create a better workplace for your employees can help you keep your top talent.
It begins with hiring committed employees, offering them a reasonable wage, and giving them opportunities to grow and move up in your business.
If you would like to learn more about how Navrae can help you streamline your back-office processes to cut overhead costs, reduce error, and grow your business, contact us here. We look forward to hearing from you.