How to Reduce Restaurant Employee Turnover

By: Nancy Shenker

14 Minute Read

Sep 05, 2019

Restaurant Employee Turnover

The annual restaurant employee turnover rate  is at an all-time high of 75%, meaning almost three quarters of employees are unlikely to stay in a restaurant job for a whole year. Although higher-paying roles and an increase in employer options are the most common reason for restaurant employee turnover, many staff members in both front- and back of house leave simply because they don’t enjoy their work environment — and, in the current labor market, it’s easy to find a better one.

In the 2019 Restaurant Success Report, we learned 51% of restaurateurs ranked hiring staff as a top challenge, with training staff and retaining staff close behind at 35% and 31%, respectively. Replacing an hourly employee can cost nearly $6,000. 

Quoted in the Michelin Guide, Josh Phillips, General Manager of Washington, DC-based Espita Mezcaleria said:

"There is free agent mentality among many workers.  They are essentially shopping around for the right restaurant to call home. There is always someone hiring, so if you are not 100% satisfied with your job, the grass is always greener somewhere else."

Facing one of the most severe labor shortages in decades, restaurants are trying any measure that’ll help them keep their staff, from implementing new management models to offering bonuses, childcare, and other employee benefits.

What does restaurant employee turnover look like? 

We’ll start at the beginning.

What is “turnover rate?"

Turnover rate refers to how frequently employees leave their jobs. If you have an annual turnover rate of 50%, that means the number of people you hired that year is equal to half of your staff.

That said, remember that some roles (servers, for example) may get filled multiple times, while other roles (bartenders, for example) may be more likely to retain the same employee over the course of a year.

Read More: Calculate Your Restaurant Turnover Rate [Calculator]

What is the immediate impact of restaurant employee turnover?

When you lose a team member, it’s likely that you will see an immediate impact on service quality.  With one less front of house staff member, sections may become bigger, a spare second to run food or drinks may be harder to come by, and the payment process may become more drawn out. With one less back of house member, additional responsibilities on the line will be added to staff members’ plates, additional shifts will need to be accounted for, and fewer staff members to fulfill the same number of tickets may cause a bottleneck.

If the staff member who left was a longstanding, experienced member of your team, you’re losing an invaluable knowledge base, a trainer for new employees, and a person with a high comfort level with their role, responsibilities, and your customers. Unless you’ve already established a clear restaurant training manual and succession plan, getting other staff members operating at the level of your experienced staff member is time consuming and oftentimes can’t be rushed. In the interim, customers often notice the void, and your guest reviews might suffer.

When a member of your restaurant staff leaves, those left behind often question their own status and might, according to HR consultant Insperity, experience a sense of loss. Plus, picking up additional responsibilities while an open spot is filled could result in those workers feeling stressed and resentful. 

Filling open positions is a long process and distracts restaurant management from their main focus: delighting every guest. Even if you use one of the many tech solutions for sourcing and hiring new employees, the interview and hiring process takes time and effort.  Plus, you might need to pay a new employee more than what you were paying the person they’re replacing. 

Related Resource: Hiring the Modern Restaurant Workforce Course

As this chart from Nation’s Restaurant News illustrates, some restaurant roles are more difficult to replace than others. 

Via Nation's Restaurant News

Compare your restaurant against these national statistics. Is the above graphic reflective of your restaurant? 

Restaurant employee turnover looks different for different businesses. In order to reduce employee turnover in your restaurant, you need to take a look at your restaurant’s employee turnover history and ask your team questions like:

  • Which positions have the highest turnover rate?

  • Which positions have been the easiest to fill? Which have been the hardest?

  • On average, how long does it take to fill a front of house position? How about back of house? Management?

  • Which positions have the shortest tenure? Which have the longest? 

Now that you’ve identified your problem areas, it’s time to dig into the reasons why staff are choosing to leave their jobs at your restaurant.  

How can you prevent restaurant employee turnover?

Salary and benefits are not the only ways to keep restaurant employees fulfilled, engaged, and committed. Culture and community building are as important (and sometimes even more important) than compensation. Restaurant employers need to get creative with offering employee benefits, career advancement and professional development opportunities, and creating a fantastic work environment if they want to keep their staff members.

Let’s look at the three distinct aspects of job satisfaction: workplace experience and culture, leadership, and compensation.

1. Create an enriching workplace experience and culture

The day you hire an employee might be the day you start to lose them.

A recent Deloitte Insights study revealed that fewer than 10% of employees are very satisfied with the human elements of work, known as the “employee experience.” This means that something in their environment — people, work conditions, training, or processes — is causing them to dislike their jobs.

The employee experience begins before the first day of work. How people are treated during the interview process can have a long-lasting impact on a candidate’s perception of management and the job itself. Plus, if you sugar-coat aspects of a position and the reality is markedly different, your great new employee may feel misled. If you find yourself caught in a perpetual revolving door of newly hired but unsatisfied staff, start with your hiring practices

Hiring speed is an important factor as well: If you’re serious about a candidate, move quickly. According to Jose Shwank, Director of Operations at Sushi Sake,

“Some applicants abandon the [hiring] process because of other opportunities whose process is quicker.”

Jose Shwank

Director of Operations at Sushi Sake

As a manager, make your expectations clear from day one and give every employee access to the job skills training and support they need to succeed. Personality-based hiring and building a strong sense of community from the onset are two important keys to “fit” and job satisfaction, according to Liquor.com

Personality-based hiring, when done properly, can help you pinpoint and screen for traits that will make someone a strong team player and problem solver. These tests are not a substitute for live interviewing, though — especially because our industry requires a high level of interpersonal connection. Finding the “right” person for the job is just the first step.

This year’s Restaurant Success Report survey included a section on how restaurant operators train their new hires. Shockingly, 70% offer no training at all. Only 19% of restaurant managers make online training available, and fewer than 40% check in with new hires to get a sense of how they’re doing in their jobs.


Via Toast's 2019 Restaurant Success Report


Handing a new staff member your employee handbook and expecting them to master a role may be overly ambitious. Providing workers with the training, support, and feedback they need to do their personal best can help reduce attrition in the long-run and is well worth the time and investment.

Quality training does not need to involve classrooms and break rooms. Smartphones and tablets can now serve as powerful tools in the onboarding and training process, according to Harri, a Toast partner and integrated staffing, training, and staff management solution provider. Here are some digital hospitality skills training resources to consider:

It’s important to remember that even if an employee is highly trained and comfortable in their role, the pressures of their day-to-day responsibilities can cause strain, especially working in a fast-paced, labor-intensive, high-stress environment like a restaurant. Helping your team cope with stress can be as important as teaching them how to use a POS system. Check out these tips from chef Chris Hill about how to help restaurant staff destress at work

Stress in the restaurant industry is commonplace. Employees believe work is more stressful now than a decade ago, and 80% of workers feel pressured at their jobs, according to the American Institute of Stress. Restaurant work (especially serving) has been reported to be one of the most stressful jobs — even more than being a brain surgeon. You can’t always prevent it, but you can look at your role in creating it. That leads to the role of a manager in driving workers out the door.

2. Empower restaurant management to be leaders in your organization

There’s a popular saying in business: “people don’t quit companies, they quit managers.” 

Managers and operators can play a huge role in creating a work environment that people are excited to go to every day. Although you have little control over a rude customer or the long line of hungry take-out customers, being a supportive and calm leader can defuse stress and help the team find a solution in the midst of madness. If you approach each situation with a level head and positive reinforcement, reward restaurant staff with employee incentives, and model the behaviors you’d like to see, your employees will respect and trust you, perform better, and stay longer in their jobs.

Strong leadership extends beyond technology and involves human listening, balance, and boldness. It entails not playing favorites among your team members and stepping up to mediate in volatile situations between employees. Your team looks to you to make their work lives easier and stress-free. Be the source of calm and problem-solving; don’t stir the pot. Here are some great tips on defusing employee tension at your restaurant from Buzztime.

Involving employees in problem-solving and dispute-resolution gives them a sense of empowerment and control. 

As Sai J, General Manager of Kosushi Miami says, “Our job is giving care, not just feeding the guests. All I do is make sure that the staff knows that we are appreciated. If everyone knows we are a team then the team will contribute as a team.” 

Andrei Stern of Miami, FL based SuViche takes a similar approach to encouraging team involvement, regardless of position or perceived hierarchy.  “The decision making power, instead of flowing up in the hierarchy, we push it down. Everyone has the ability to make decisions,” says Andrei.

The restaurant industry does not make it easy to maintain work-life balance. Scheduling shifts that work with employees’ needs and wants is not always possible, but it can play a huge role in job satisfaction and retention. 

3. Offer competitive compensation and meaningful employee benefits

Now that we’ve covered the softer (but critically important) side of battling employee turnover, let’s look at compensation. Being happy and supported in a restaurant job is important, but so is paying the rent.

The 2019 Restaurant Success Report surveyed owners on how they compensate workers, making them stand apart from their competitors and attract the best talent. Getting a clear understanding of what your local competitors are offering and what’s of greatest importance to your most valued team members is critical. 

Read More: How to Choose the Right Staff Management Model for Your Restaurant

Base Pay

How you pay your employees depends on many factors and can vary widely in the restaurant industry, from state to state and region to region. It will depend on your business model, your margins, your legal wage obligations, and your philosophy on gratuities. These restaurant-specific wage and payment tools can help you evaluate your own pay structure and make adjustments if you’re finding that compensation is the reason why employees are choosing to leave.

Tipping

Tipping policies can be contentious. Here are the two most common ways restaurants lean on a gratuity-based employment model: 

  1. Tipping out – Waitstaff and bartenders collect the tips throughout their shifts and then distribute a percentage to hosts, bussers, expeditors, and anyone else who may have assisted them throughout the day. The server or bartender who originally earned the tips takes home the majority.

  2. Pooled tipping – Pooled tipping takes the amount of tips earned during a shift and divides it evenly among everyone who worked that shift and is tip-eligible.

As the chart below illustrates, many restaurants have moved to a no-tipping policy, which has been met by a mixed reception by both diners and restaurant staff. High performers will sometimes balk at sharing their tips with less-experienced staff. And as Eater has noted, tipping practices can be problematic to already-underserved populations. Also, many customers want the ability to reward service at different levels. You have many options and no clear-cut answer. 

Your employees are bound to have strong feelings about your tipping policy, as well as which shifts or sections yield the highest gratuities. 

Via Toast's 2019 Restaurant Success Report

The data available in your restaurant point of sale’s reporting and analytics can be used to identify peak shifts and staff accordingly; it can also be used to uncover the sales performance of each individual front of house staff member, which should influence how you approach employee scheduling. Check out this post from Toast to learn more about how to create an employee scheduling strategy based on sales data

Related Resource: The Restaurant Scheduling Template

Sean Snelling, Director of Operations at Taco Guild, swears by his POS system in boosting employee morale. He says, “

Technology helps eliminate the dichotomy between workers’ wants and business needs. The staff doesn’t want to come in and waste their time not making tips. The restaurant wants to be profitable and hit their labor goals. Technology helps predict when to schedule and when to cut by instantly collecting trend data. Fewer headaches and hurdles equal happy staff, which equals happy guests, which equals a happy business.”

Sean Snelling

Director of Operations at Taco Guild

Discussing why employees are assigned to certain sections or certain shifts, as well as why you’ve chosen a tip out or tip pooling method, builds trust through transparency and healthy communication.

Employee Benefits

One way to show your team you care about them, both inside and outside the restaurant, is to offer employee benefits that improve the quality of their lives. Health, dental, and vision insurance are the most common — and usually most valued — way to enhance compensation. This guide to restaurant employee benefits will help you make decisions about how and when to offer benefits to your employees. Stay on top of what other local restaurants are offering their team members so you remain competitive. Choose benefits based on the needs of your best performers.

At the end of the day, they’re going to leave if they can make a few bucks elsewhere. We set certain metrics. If they [staff] can meet them, they get a bonus. It’s helped with morale, productivity, and turnover.

Andrei Stern

CFO and Co-Founder, SuViche

The investment in offering benefits to employees may pay off in the long-run in retention and loyalty. Why? Because the cost of offering benefits may be less than the cost of continuously replacing top performers. For more insights into why benefits matter, look to our recent coverage of  the topic. 

Via Toast's 2019 Restaurant Success Report

Battling the 75% Restaurant Employee Turnover Challenge, Together

Turnover is a reality of all businesses, not just the restaurant industry. But by hiring, on boarding, rewarding, leading, and off-boarding effectively, you can reduce that turnover number for your establishment.

Look to restaurants like Pal’s (which has been praised for its “absurdly low” turnover rates) for inspiration, use your restaurant technology to create the best staffing models (that work for both you and your employees), take a close look at your compensation and reward structure, and above all, don’t ignore the employee experience aspects of how you run your business. Share your challenges and learning with other restaurants to help our community battle staff turnover together. Creating workplaces that people hate to leave can be a powerful thing for the strength of an industry.

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