Whether you run an upscale fine dining restaurant or manage a fast-food franchise, you’ve seen the difficulties that come with hiring and maintaining a great restaurant team. Understanding the reasons for high restaurant employee turnover rates is just the first step in being able to combat it.
Turnover in the restaurant industry
Historically, the restaurant industry hasn’t provided much career growth for workers, which means the majority of staff hold the same job, or one of similar responsibility and authority, for a really long time. This lack of progression combined with demanding hours and pace contributes to burnout, and if you can’t provide a reason for your staff to stay, they won’t.
And the past year has only exacerbated the issue: as a result of COVID-19, many restaurants had to make the difficult decision to let go of valued staff and reduce their workforce, and data from 7Shifts showed that in May 2020, the number of restaurant jobs scheduled was down 75%. The restaurant turnover rate skyrocketed to over 130%.
While the industry is beginning to recover in employment (in March of 2021 alone, restaurants and bars gained 176,000 jobs, according to the Bureau of Labor Statistics), there isn’t a high level of employment in restaurants relative to the percent of jobs available. And, due to about 17% of restaurants permanently closing because of the pandemic, and many industry lifers choosing to leave behind restaurants for good, the industry is smaller and more competitive than ever before.
What is Employee Retention?
Employee retention is when staff stay on your team for long periods of time — it’s the opposite of employee turnover. But how do you increase restaurant employee retention?
With pre-COVID restaurant turnover rates of 75%, you might think the odds are against you. But there are many ways to make working at your restaurant different — and more sustainable — than others.
How do you Retain Employees in a Restaurant?
Simply put, employees value good pay, development, and benefits. Restaurants need to think about staff development plans even from an entry-level job perspective to drive long-term employees (instead of trying to manage short-term restaurant staff turnover rates.)
And restaurant employees deserve better compensation and financial security. Rethinking your compensation models, and considering things like on-demand tips and pay can be a zero cost benefit to employers and increase the applicant pool in tough labor market.
Finally, finding a way to contribute to employee health insurance plans is one of the best ways to attract talent — they will know you value their health and safety, especially after this year of health crises.
If you can manage making these positive changes, you’ll have happier employees who remain at your restaurant for longer and who ultimately reward you with more satisfied customers, better company culture, and a better bottom line. Here are some restaurant retention strategies to try out.
Restaurant Staff Retention Strategies
Focus on teamwork and teaching
Your front of house, back of house, and management staff are all working toward increasing your restaurant's revenue, but does your dishwasher know what a profit and loss statement is? Do your bussers know their personal effect on the business? Do your servers know the industry’s profit margins?
Enter open-book management (and the larger theme of being transparent with your team, regardless of their role or tenure).
Implementing open-book management allows your entire staff to know what you know — that keeping a restaurant alive is all about teamwork. By literally opening your books and addressing operational challenges in a collaborative way, your whole team can think like business owners and feel responsible for the success of your restaurant. Every single employee in your kitchen, dining room, and bar contributes to your restaurant's success. Tell them that. No matter their title, all of your employees should have the ability to gain real-world knowledge, contribute ideas to improve business efficiency, and feel like their voice is heard.
“Our approach to open-book strategy is to take a lot of management functions and delegate them to staff as things that really enrich their jobs and that tap into the intelligence that they bring and that would otherwise be wasted,” said Henry Patterson, senior partner at ReThink Restaurants. Every employee has something to offer. Let them prove it.
Outline exactly what new employees should learn and accomplish during their first few months at your restaurant in this customizable Word doc.
Be a supportive leader
This is a demanding industry. Staff like to see their fearless leader come in before them, leave after them, and work at least as hard or harder than them. They want their manager to be capable of doing anything they’re able to do.
Regardless of your leadership philosophy, demonstrating respect while remaining firm with your team will result in mutual trust. Calling out an employee for being late to a shift in front of their peers can actually breed contempt on behalf of your staff. Punish privately and praise publicly is a good rule of thumb, but don’t forget to praise often. Let your staff know you recognize their hard work and their efforts don’t go unnoticed.
All people really want is to feel seen, heard, and valued. Ask your staff for their suggestions and feedback on how the business is running. Ask them how their family’s doing. Celebrate birthdays and life events. Send them soup when they’re sick. We all walk into work every day carrying some kind of baggage. Restaurant staff want a boss who’s loyal, who takes an interest in their lives, who will protect them. If you can do that, your staff will feel it.
Learn how to hire a line cook for your back-of-house team, including job descriptions, responsibilities, and more.
Offer work-life balance
When it comes to your employees’ lives outside of work, compassion is key. People get sick, have babysitters who cancel last minute, or have other outside responsibilities like school or a second, third, or fourth job. Acknowledge that, and try to be flexible when your business allows it. This lets your staff know you care about their personal needs and wellbeing, too.
Give your staff the ability to choose their schedules or at least ask for their ideal shifts. Track how many hours each employee is working through your scheduling software to make sure you’re not driving your team to their breaking points. Allow your employees to be on-call for shifts, or offer students the ability to pick up shifts rather than scheduling them.
If you’re often tight on staff and a last-minute no show means your main dining room will be a mess and your guests and staff will be miserable, consider trying gig apps like Instawork to pick up extra team members on the fly. This saves you from putting pressure on your team to fill the empty slots during a day off.
Create a supportive work environment
If you don’t have a harassment policy in place, consider implementing one. Make it clear that your restaurant will not tolerate harassment of any kind. Provide guidelines, situational examples, and HR and/or crisis support contact information, and let your staff know they’re encouraged to speak up if they encounter harassment without fear of retribution. Train your managerial staff to understand how to properly respond to a harassment claim.
Offer competitive benefits and pay
Consider offering paid time off or health benefits. It might seem out of reach, but the monetary value of maintaining the same team for years on end is worth it.
Chef Jacques Haeringer, the executive chef and proprietor of L’Auberge Chez François in Great Falls, VA, describes the advantages employee benefits can offer. “Our employees stay with us because we offer more in terms of pay, vacation, and benefits than the restaurant down the street,” he said. “Does that hurt the bottom line when it comes to calculating our expenses every month? Sure, but the trade-off is worth it when you consider the costs of training new staff and the benefit of my customers seeing the same, experienced staff members each time they walk in the door. If you are willing to invest a bit more money in your employees, you’ll come out ahead in the long run.”
You can also consider providing earned wage access for employees. When restaurant employees feel supported by their employer through great pay and benefits, they’re happier and can do their best work. According to Market Watch, more than half of American consumers (56%) said they are living paycheck to paycheck and restaurant employees are no exception, many of whom have limited or no emergency savings. The ability for your employees to access their wages when needed, before payday, is becoming more and more essential. Financial stress is a significant mental burden that can lead to burnout, absenteeism, and restaurant staff turnover, and earned wage access can help alleviate these issues.
Offering earned wage access can improve restaurant employee experience, increase financial stability and improve restaurant employee retention. According to a PwC employee financial wellness survey, one in four employees were distracted at work by personal finance issues in the past year and 54% said financial or money matters caused the most stress. By providing earned wage access, employees can reap the benefits of greater financial flexibility.
Does that hurt the bottom line when it comes to calculating our expenses every month? Sure, but the trade-off is worth it when you consider the costs of training new staff and the benefit of my customers seeing the same, experienced staff members each time they walk in the door. If you are willing to invest a bit more money in your employees, you’ll come out ahead in the long run.
Train well and often
Create a training program that’s thorough and dynamic enough to be a constant resource to all employees. A new employee is fully onboarded when both the employee and the business feel that they’ve mastered the learning curve and are comfortable and productive when working independently. You can’t assume your new hires know everything necessary to keep your business afloat in one week’s time. Training should be ongoing, collaborative, and engaging to make sure your employees will continue to do well.
Create a week-one checklist and a 30-60-90-day checklist for all new employees. List all the important interactions that will occur in an employee’s first week, and identify what you want them to achieve by the end of the week. In a 30-60-90 day checklist, detail how you want your new employee to develop. Include all tasks and training sessions, a time to complete them by, and one-on-one meetings to periodically review and give feedback on your employee’s progress. This can be a time to address anything your staff member may not have completed and should prioritize differently in the future, set professional development goals for their careers (both with your business and outside it), and allow you to bond and get to know each other better.
Most servers don’t want to stay servers forever. Most dishwashers don’t want to stay dishwashers forever. A great training program benefits everyone: your staff, your guests, and your business. Investing in your employees as valued members of your team will create an environment of trust and encourage high performance all around.
Week 1 Checklist
Help new employees start off right with this customizable Word doc of tasks for their first week, including HR, certifications, training, and more.
Outline exactly what new employees should learn and accomplish during their first few months at your restaurant in this customizable Word doc.
Give and receive feedback
Once an employee has reached their 90-day mark, don’t let your one-on-one meetings fall to the wayside. Host these meetings each month with every employee to continue to engage and be transparent with your staff. One-on-ones give you the ability to maintain a supportive environment that your employees will want to work in. During these conversations, include performance reviews to discuss your employee’s progress month over month, identify ways to improve, set new goals that give your staff a reason to come to work, and allow them to address any questions, problems, or suggestions they have.
It might feel daunting to meet with every employee once a month, but it will help you nip bad habits in the bud and collect valuable information about your company and team. If monthly meetings seem impossible due to a large ratio between managers and staff, multiple locations, or maybe your team is just too big, annual reviews are the next best option.
However often you decide to hold employee reviews, you should include peer evaluations, a self-evaluation, and a manager’s evaluation. This will give your employees a grasp on how they contribute to the culture of the company, a period of self-reflection and understanding of their strengths and weaknesses, and a detailed assessment from you. Each part of the review should be used in a constructive way to help your employees get better at their work, not tear them down. Make sure that’s clear to everyone.
Listen to your team members. They understand the day-to-day of your business and have different perspectives on what’s working and what isn’t. Allow time in your reviews to ask your employees their thoughts on various aspects of your company. Discuss whether there’s anything your culture is lacking, ask where the employee sees themselves in six months or a year, and discuss any improvements you can make or support you can provide to help them get there. You don’t have to take every suggestion or implement every strategy, but there will be some great ideas you’ll want to jump on.
A payroll and team management platform built for restaurants to help you and your team succeed.
How to reduce restaurant employee turnover
Here are a few ways that restaurateurs are keeping their staff engaged and well-paid.
Thamee in Washington, D.C. offers an excellent compensation and benefits package to their employees. Thamee’s owners, Simone Jacobson, Eric Wang, and Jocelyn Law-Yone believe that restaurant industry professionals often lack a sustainable career path, work long hours for little money, and aren’t provided with the benefits they deserve to be healthy both mentally and physically.
During the pandemic, Thamee started thinking about alternative models of compensation. They implemented a no-tip policy, and added a flat 30 policy where they’re adding a 30% service charge to pay all staff and create an equitable working environment. This extra revenue is covering health insurance, medical emergencies, and paid vacation time for their staff.
“We want to be part of the change we all seek,” they state on their website. “Restaurants provide joy, pleasure, and memorable moments for so many in our communities. Simply put, restaurant workers deserve better.”
HOUSEpitality Restaurant Group
Kevin Healy at HOUSEpitality Restaurant Group also takes a creative approach when it comes to staff compensation. HOUSEpitality group added order and pay at the table technology, and also eliminated tipping by charging a flat 20% service fee. This has allowed the business to increase the hourly wages for staff in all areas of the restaurant.
With this new model, servers and cooks are making upwards of $20 an hour, with bussers, dishwashers, and food runners earning $15 - $17. And, this newly captured 20% service fee funds their labor costs for the front-of-house staff, resulting in zero server labor costs most days.
Hospitality extends to your employees, too.
Putting people first is what hospitality is all about. Make sure your team members know they’re as vital to the longevity and sustainability of your restaurant as your customers are. Help them grow as people and as employees. Give them opportunity and value their work. They’ll stick by you.
Training Manual Template
Use this restaurant training manual template, a customizable Word Doc, to provide your staff with the rules, guidelines, and clarity they need to do their jobs efficiently.