Practical ways to reduce restaurant employee turnover (in front & back of house)
Restaurant employee turnover is one of the unavoidable facts of the food service industry. In 2018, the National Restaurant Association industry noted that the turnover rate in the hospitality industry was sky high, at 74.9%. This high turnover—often called churn—can negatively impact a restaurant’s bottom line in significant ways.
High turnover rates, generally speaking, lead to inefficiency in a restaurant. New employees take time to find, and onboarding costs money and impacts restaurant performance (plus changes the overall feel of the work environment). Restaurant workers frequently leave to take jobs that suit them better, pay them better, and offer a path for advancement.
There are many reasons team members may leave a restaurant. Low wages, long hours, and poor morale due to company culture are often cited as reasons a restaurant staff member might quit a team.
So, let’s look at ways to minimize employee turnover as well as ways to improve employee retention—and why this matters to restaurants in general.
The high costs of high restaurant employee turnover
Restaurant employees often move on to other opportunities. The average turnover rate for the restaurant industry in 2018 was a whopping 70% according to the Bureau of Labor Statistics, mirroring the hospitality statistic from the National Restaurant Association. This turnover has a harmful effect on a restaurant’s bottom line.
Replacing even a minimum wage employee can cost a company as much as $3,500. These costs can be represented in many ways, like onboarding programs and workplace integration. Additionally, a new hire will shake up team dynamics in any restaurant, regardless of the number of employees.
Anybody who’s been new at a job at some point in their life will know the feeling of being the new employee, lacking context and general understanding of how a particular job works. Even a seasoned executive chef who’s used to a very deep contextual understanding of their work environment and who’s managed multiple restaurants at once will take time to adjust to a new work scenario.
Humans are above all a social species, and need to build trust and rapport to work with each other effectively. While a consummately professional pastry chef will be able to produce fantastic desserts, they’ll likely be happier doing so with a team they like and are familiar with rather than in an unknown or hostile environment.
Restaurant staff morale and performance has a cascading effect on the business. Employees who work well together develop a rapport that influences more than simple statistics would show. Camaraderie is an essential part of any restaurant job for both the front of house and back of house. Losing a key player can affect team morale: Removing the team jokester, for example, may have employees missing the levity they were once used to.
Retaining the same core staff for as long as possible ensures not just smooth communication and workflow, but also team spirit. Anyone in the industry knows that when you’ve been in the trenches with your team during crazy rushes or difficult days, you form a unified bond that can actually make you look forward to going to work to see your co-workers.
So, restaurant owners should consider the high costs of turnover beyond surface-level dollar metrics. In my experience working in, owning, and operating pubs and restaurants, team spirit is an unquantifiable aspect that makes a business work. Someone only looking at a balance sheet may only see the result in gross revenue or net profit, but numbers never tell the whole tale.
Staffing shortages during and after the pandemic
The current staffing shortage, in the fall of 2021 as of this writing, shows the near total breakdown of the hospitality industry in the wake of coronavirus-induced lockdowns and painful reopening. Staffing shortages are a nationwide phenomenon. In many cases, worker shortages are a sort of quiet revolt against working conditions that have prevailed in the restaurant industry for years.
Since many restaurant employees are part-time, they often don’t have access to employer-provided healthcare, unemployment benefits, or childcare benefits. The current job market reflects an acceleration of the trend of employee turnover, with staffing shortages reflecting the inevitable conclusion. Even with vaccination rates steadily rising, business owners are struggling to find enough workers to fill their restaurant job openings, and some are turning to technology to help fill the gaps in their staffing.
Retaining talented staff is more important than ever. So, what are some good ways to do that?
A deep dive into a restaurant’s employee turnover
One of the best ways a restaurateur or restaurant owner can figure out what’s causing a high employee turnover rate is fairly simple: ask questions. Let’s talk briefly about exit interviews before we look at some ways to boost employee retention.
Conduct exit interviews
We highly recommend a restaurant manager conduct exit interviews every time an employee quits. An exit interview is an employer asking an employee about their experience working with them. They usually happen towards the termination of a contract, but they’re especially important when an employee decides to leave the business on their own accord.
One key benefit of conducting exit interviews is an employer can expect a fair degree of honesty from their employee once they’ve already got a foot out the door. Employees who may have kept their opinions to themselves for fear of upsetting those around them are remarkably more candid when they have nothing to lose.
From these exit interviews, an employer can determine the cause of an employee’s decision to leave—and can then address these issues later. In general, exit interviews are an excellent idea anywhere in the private sector, but are especially valuable in sectors with high turnover like the restaurant industry.
Learning just what made your employee decide to leave can prevent your restaurant from experiencing higher turnover, and may aid you in the hiring process in the future.
Consider your offerings
What does your restaurant offer that would make an employee want to stay with you longer than with another company? As the high turnover rate shows, keeping employees long term is indeed a difficult task. So, what can be done?
The most glaringly obvious first choice is to offer competitive wages. Employees who are well paid feel valued, and will be more likely to stick with a company that pays them better than many others would. Many people would jump ship for a significant pay raise. Many will also stay put for consistently high pay.
One common gripe among restaurant employees is the wage disparity between front of house and back of house staff. In many situations, wait staff may earn more in hourly wages than their back of house peers—though the back of house usually swears it works harder. Consider suggesting a tip pooling strategy for employees, if employees seem keen to agree. If not, consider offering your back of house staff like line cooks higher wages than your competitors if you’d like to reduce staff turnover.
Besides pay, consider what perks your business offers. Rather than simple gimmicks, when perks are done well, they can be a make-or-break offer for workers. For example, free meals, adequate breaks, team outings, or even something as simple as free beer after work can all make an employee feel at home and cared for. In other words, they’ll be less likely to leave.
At the same time, these small perks cost an employer very little in the long run. When considering offering free meals, for example, a restaurant owner should look at the gross cost—not the menu price—of a meal for their employee. As an aside, it’s a truism of political science that well-fed people rarely revolt.
Reducing turnover saves money
In the long run, minimizing restaurant employee turnover will save a restaurateur headache, heartache, and wallet-ache. A restaurant running well below the national average of 70% turnover will have a team that knows what they’re doing and how to work together, and the restaurateur will be able to reap the due rewards.
If you’re looking to increase those rewards, Yelp for Restaurants is here to help. With offerings including a full front of house software suite, marketing tools, and more, you’ll be able to help your restaurant’s profits explode while keeping your staff happy with the latest and greatest restaurant software.
Interested in a demo? We’d love to talk to you more and show you how we can help.