The Impacts of Employee Engagement on Customer Retention

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Many restaurant marketers may categorize restaurants in the food business. However, they're primarily in the services business. Their ultimate goal is to deliver a great customer experience, which includes great food. This experience can only be achieved when a restaurant has a highly motivated and engaged workforce that is willing to take ownership of the customer experience.

According to a recent survey by Deloitte Consulting on restaurant customer experience, a team of hospitable and friendly employees is the key element required to create a positive experience for customers at a restaurant. Diners are no longer simply going out for a meal anymore; they're expecting an experience. Here are 4 things you should consider for engaging employees to improve customer experience:

Employee engagement reduces turnover and boosts profits.

The restaurant industry faces the challenge of high employee turnover. In 2017, recruiting remains a large pain point for restaurant employers, as per a study done by the National Restaurant Association. Competitive hiring advantages often belong to restaurants that manage to have a lower turnover than the industry average. By employing engaged employees that have significantly high job satisfaction levels, high retention is easily achievable.

Restaurant businesses that invest in employee development, retraining, and engagement programs find it easier to retain top talent, deliver the experience their customers want, and generate sales growth and profits. The commitment to employee engagement should be a top strategic value in the hospitality industry (both as a profit-enabling endeavor and as a driver of superior workplace satisfaction).

Unlike many other businesses, employee engagement is not merely an HR issue for a restaurant business. It's a corporate strategic imperative that must be addressed at the management level. By investing in employee development and retraining initiatives, restaurants stand to outperform their competitors.

Focus on employee development and retraining.

Investing in innovative employee development and retraining initiatives builds the foundation for an engaged workforce in a restaurant. According to a Harvard Business Review study that involved more than 500 stakeholders, 71 percent of the respondents agreed that employee engagement is vital to achieving business success.

Restaurant employees who receive the right tools and training opportunities often turn out to be:

  • Brand ambassadors for their restaurant
  • A positive influence on their co-workers
  • Highly aligned with the restaurant’s goals
  • Willing to go the extra mile to satisfy customers  

A culture of employee recognition improves loyalty.

Recognition, professional development, learning and training opportunities and career progression are the top drivers of employee satisfaction, especially among younger restaurant workers. Research has shown that companies with a culture of recognition have 31 percent lower employee turnover rate than others.

If the restaurant managers view workers as regular hourly employees or don't make them feel valued, their performance will likely reflect their attitude; inadvertently increasing your turnover rate. If employees don't feel valued, it's likely that they'll deliver sub-par customer service and not perform to their full potential. On the employee end, there's nothing worse than feeling as though no one cares as much as you do, especially when you're putting in your best work.

Therefore, restaurant businesses should encourage a culture of recognition where the employees get acknowledged for their performance by restaurant managers. This doesn't always mean monetary rewards; but a "thank you for the good work" is free and can go a long way!

Employee engagement impacts ROI.

A global HR survey by the Boston Consulting Group showed that investment in employee engagement, hiring of new talent, and improving employee retention leads to a 1.6 to 2.5 times growth in revenues and 1.6 to 1.9 times growth in profit margins. But this shouldn't be hard to see. Engaged employees are happy employees; and employee engagement creates a positive employee attitude that trickles down to every single customer interaction.

In his book, Employee Experience Advantage, Jacob Morgan says that companies that focus on building a positive employee experience are as much as 4 times more profitable than others, and have more than twice the average revenue. Companies that are heavily invested in employee experience got listed 11.5 times as often in the Best Places to Work list published by Glassdoor.

An energetic, and engaged workforce at a restaurant will most likely outperform its competitors in customer service and revenue growth; which will benefit both employees and employers!

employee engagment

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December 2020


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