The Ultimate Guide To Restaurant Employee Benefits

By: Jessica Reimer

9 Minute Read

May 15, 2019

Employee Benefits Hero

It’s no secret that the restaurant industry is plagued by an astoundingly high employee turnover rate for restaurant staff

In 2017, the average tenure of a restaurant employee was only one month and 26 days, causing management to spend a disproportionate amount of their time, energy, and budget on recruiting and rehiring.

So why the revolving door? 

Unfortunately, the restaurant industry has a bit of a bad reputation when it comes to quality of life. There are long days, late nights, big demands, and few rewards. Most people begin working at restaurants because they need a job or a paycheck — not necessarily because they want a career in the foodservice industry. Have you ever wondered why young, part-time employees make up the majority of the restaurant workforce? Well, there you have it.

Every time a new employee is replaced, it seems another two leave. Restaurant owners, managers, and leaders have been left wondering: What kinds of employee benefits should I offer to attract new talent and hold on to the staff I already have?

The good news is that in today’s job market, restaurant employees are very interested in non-traditional workplace benefits like professional development opportunities, free meals, or travel stipends. A little creative thinking can go a long way in helping you decrease your annual employee turnover rate, and increase your employee retention. 

Free Course: 86 Your Employee Retention Problem With The Employee Retention Playbook

Why Should I Offer My Staff Employee Benefits?

Building a restaurant employee benefits program is advantageous for both your team members and your bottom line.

Showing your staff that you care about their personal and professional success is a proven recruitment and employee retention strategy. Employees want to feel wanted, valued, and know their employer has their best interests at heart. 

**cue Cheap Trick’s I Want You To Want Me**

Sadly there isn’t a one-size-fits-all formula for attracting and retaining quality workers (because that would be too easy). On the upside, managers have the flexibility to offer incentives that align with their restaurant’s values and are sensible from an operational and financial standpoint.

Whether you’re thinking of sticking to traditional HR offerings — things like a matched 401k, for example — or you’re considering less conventional options, remember this: The specifics of how you build your program matters much less than building supportive workplace culture that values employees’ personal and professional wellbeing and growth.

You can’t just talk the talk… you have to walk the walk as well.

Do I Have to Offer My Restaurant Employees Health Insurance?

In a survey of restaurant workers conducted by Restaurant Opportunities Centers United, 90% of respondents said their employers did not offer health coverage. Similarly, the Agency for Healthcare Research and Quality found that small businesses in low-wage, high-turnover industries, like the restaurant and food service industries, were less likely to offer health insurance.

Currently, there are no federal or state laws mandating small businesses in the restaurant industry provide health-related benefits (though larger operations are required to do so under the Affordable Care Act).

That does not mean, however, that restaurant staff are willing to work for restaurants who don’t offer some form of health coverage or reimbursement, especially if the job is their primary source of income.

Restaurant owners and managers are left with this puzzle to solve: If an employee is unlikely to stick around for more than a few months, and insurance waiting periods can be as long as 90 days, is investing in providing employees with health benefits worth it?

Some managers say no, justifying the decision to forego health insurance on a lack of regulatory requirements, a poor economic climate, or a poor restaurant profit margins.

However, The National Restaurant Association — the largest foodservice trade association in the world, serving almost half a million restaurant businesses — actively supports legislation that could help reduce the burden of rising healthcare premium costs for restaurant owners.

If you’re interested in providing your restaurant staff with health insurance, but don’t know which HMO to choose, consider using a platform like Health Care HQ or Stride Health. Both provide users with a comprehensive suite of health care insurance programs that they can pick and choose from, making the process of choosing a health care provider much more personal.

7 Low (or No) Cost Restaurant Employee Benefits

Employee benefits aren’t limited to the dinosaur medical, dental, vision, or general healthcare options. If you really want to enhance your restaurant’s appeal (and its retention rate), here are seven non-traditional employee benefits your restaurant can offer that will entice new and existing staff members. 

1. Free Meals

Restaurant employees are often asked to work through meal times, preparing and serving food they seldom get the opportunity to enjoy. Offering a free meal — whether it’s a shift meal or a gift certificate staff can use as they please — is a sweet and simple way to say thanks for putting in a hard (and usually long) day’s work. Some restaurants even have a special menu of free items for staff to order from when they get a break during meal service. 

It’s also a wildly effective way for your staff to learn the menu and be able to make educated recommendations to your guests. Your staff members definitely wear many hats, and sales rep is one of them.

Considering nearly 85% of unused restaurant food winds up in the trash, gifting free food to your team is both an employee benefit and a waste management strategy. 

2. Transportation Stipend 

The only thing harder than finding parking is finding free parking... if your staff member even has a car. If not, Ubers add up quickly and a monthly bus/subway pass can be very pricey, depending on where you live.

And don’t even get me started on gas prices...

Maintaining your lifestyle can be difficult when you live off a tipped wage, and transportation costs will put a sizable dent in your employee’s budget. Consider factoring in employee stipends and benefits when you're calculating your restaurant's payroll.

You can help by subsidizing the cost of a parking garage, contributing to an Uber bill, or introducing a wellness program to offset the costs of alternate modes of transportation (cycling, bussing, and so on).

3. Cash Bonuses

As they say, cash is king. If you’d like to offer good ol' fashioned cash incentives to your employees as benefits, there are a few ways to stretch your dollars. 

You can use cash bonuses as a motivation tool: offering cash rewards to staff who consistently show up on time or have few to no sick days can motivate those who are less punctual or prone to habitually calling in sick on the weekends. 

Another option is to gift “just because”—rewarding excellent customer service, or as a token of appreciation for someone who stays late to help a fellow server in the weeds. 

Including a cash bonus in an employee's upcoming paycheck is easy to do when a using payroll service, like the new Toast Payroll & Team Management, an all-in-one restaurant point of sale and payroll solution. 

4. Reward Employee Loyalty

If you want to encourage your staff to stay with your restaurant long-term, show them what their loyalty means to you!

When a staff member reaches their employment birthday/work anniversary, have a party for them to celebrate the milestone and gift them added vacation time, a gift card, or a floating personal day to be taken at their discretion.

In your restaurant labor management solution, make a note of each employee’s start date so you’re well aware of when staff members’ “employee birthdays” are coming up.

5. Team Building Activities

The average person spends 90,000 hours working in their lifetime. Anyone who’s ever worked will tell you it is their coworkers who help make those hours as enjoyable as possible.

Creating opportunities for your staff to hang up their “employee” hats for an evening and spend some off-the-clock time together is an excellent and effective way to strengthen a sense of kinship and community.

These activities can be informal (a round of beers on the house after a particularly long shift, a team meal to sample new menu items) or a recurring monthly event. Rock climbing, paint-balling, bowling, or pilates… the choice is yours. Recently, Toast held an annual employee kickoff event to level-set expectations and allow members of the company from all across the country to meet each other. 

6. Child Care Coverage

Child care is unaffordable for the majority of families in America. According to a 2018 study by Care.com, The average American family will spend 20% of their yearly income on child care costs.

There are more than 1 million single mothers work in restaurants around America, spending an average of 35% of their weekly wages on childcare.

Contributing to your employees’ child care costs helps alleviate a heavy financial burden and may lead to improved employee morale and availability. You will also be less likely to have parents call out when their child is home with a cold or something comes up, as they’ll be able to afford help.

7. Professional Development

One of the most common reasons young, high-performing employees leave a job is due to a lack of professional growth opportunities.

The restaurant industry is especially guilty of not providing employees with opportunities to expand their professional skill set and advance to new levels in their respective careers.

You can challenge the public perception that working in a restaurant is a dead-end gig by creating a dedicated professional development fund. Not only will you come away with a more skilled workforce, you’ll give employees another reason to choose you over the competition.

 Set up a profile for each of your employees on an online learning platform like Skillshare and Lynda; both are treasure troves of creative and business skills.

If you're interested in a restaurant specific online learning platform, check out Typsy. For $10 a month, your staff can learn a wide array of new hospitality skills in video lessons taught by expert instructors.

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