The restaurant industry’s employee turnover rate is high, and it’s climbing. In 2016, the annual employee turnover rate was 73%. That means, on average, out of 100 employees, only 27 remain from the original staff after a year. That’s shocking, and it’s costly. High employee turnover can hurt a restaurant's bottom line: it causes a spike in training, a lack of stability in staff scheduling, and a lower productivity level. In fact, replacing one hourly employee can cost up to 16% of the persons annual salaries. In short, learning how to increase employee retention, even by one person, can help your business succeed.
So why do employees leave? Here are a few common reasons why employees leave and a few tips on how to make them want to stay.
Bad management—in any industry—drives away good employees. People don’t like working for someone they don’t respect. The Gordon Ramsay “scream-louder-to-motivate-people” management approach is for entertainment, not retention.
The fix? Hiring managers who can handle conflict (rather than spark it themselves) is important to help increase employee retention. Empathy, the ability to understand the feelings of another, is an important quality when looking for successful managers.
A simple truth: happy workers stay. Building friendships helps build happiness. In fact, 67% of workers say that friendship makes work fun, and 55% say it makes work more fulfilling.
The solution? Encourage team building, and incorporate activities and games into training or everyday practices. An example is starting a little friendly competition among the morning and afternoon shifts (after all, nothing sparks teamwork like sharing a common enemy).
People need to feel seen. They need their hard work to be noticed. As a manager, it’s easy to only speak up when something goes wrong. It’s the “why fix it if it ain’t broke” troupe a lot of managers fall into. But complimenting your workers is like oiling the machine: it keeps them working better and for longer. 28% of the employees said their most memorable feedback came from a manager. Managers’ voices matter.
What's needed here? A simple “thank you”. With two words and eight letters, you can easily increase an employee's commitment to their job, especially when they’re faced with a tough challenge. Building in weekly, monthly, or bi-monthly one-on-one meetings with team members and managers for them to discuss performance can help build employee loyalty and show that you see their hard work.
The restaurant industry is fueled by minimum wages and unpredictable tips. In addition, overstaffing and scheduling can short employees of hours that they need to his their budget. It’s a business with a lot of factors and few guarantees.
The solution isn't to grossly overpay employees, but to show employees that you value them by fairly increasing their pay. Meet or surpass the minimum wage and benefit requirements to create a steady environment for your employees. Make it a routine to revisit the staff scheduling staff numbers to ensure you aren’t under or overstaffing.
Employees want opportunities; the millennial workforce crave it. If you aren’t offering, they’ll look elsewhere. Additionally, when the economy is climbing (and there are more job options on the market), employee retention sees significant falls.
To hold onto millennials, develop training programs to help them learn cooking, communication, leadership, and other growth-based skills for the industry. Also, be transparent in your promotional practices and create an environment where people feel comfortable expressing a lack of challenge in their work. Invest in your staff and they’ll invest in you.
“In the labor numbers, we were reporting about a $300 to $400 difference than what we were getting through Push!”
-Tara Hardie, ZZA Hospitality Group, 16 locations