Since April 2021, millions of people have quit their jobs across nearly every industry, but the hospitality and food service sector has been hit particularly hard during the recent wave of resignations. While the May quit rate in the U.S. hovered around 2.5% for the overall economy, the rate for the hospitality and food service industry was more than double at 5.7%, and the story is similar in other countries. The restaurant labor shortage is dire. It’s time for restaurants to rethink their employee retention strategies.
How can restaurant owners and managers handle this mass employee exodus and reduce staff turnover? Here, we share a glimpse at what high turnover means for your business and the industry, along with six restaurant employee retention strategies for building a healthier business and happier staff.
Why is employee retention so important?
Employee turnover isn’t just a problem for your team’s morale; it’s a major issue for your bottom line. According to Gallup, replacing an employee in the U.S. costs one and a half to two times the employee's annual salary, not including less measurable costs like lower productivity. The high cost of turnover is linked to a few factors, including:
Hiring costs: Writing job descriptions, making advertisements for openings, and interviewing candidates can take a substantial amount of time—and, as any business owner knows, time is money.
Training expenses: Once you’ve hired new employees, training them can be expensive. Seasoned staff members will have to spend part of their day helping these new employees instead of focusing on their usual responsibilities, reducing their productivity and your restaurant’s efficiency.
Higher food costs: High turnover can also lead to increased food costs, as new chefs and cooks are more likely to make mistakes in the kitchen. With already tight food margins, these mistakes are costly, and can even scare off customers.
In addition to accumulating avoidable expenses, restaurants with high turnover often see a negative impact on company culture. When several employees leave, your remaining staff have to work longer and harder until the absences are filled and new hires are trained. Making matters worse is the widespread nature of the labor shortage. With so many job openings, your staff can easily find work elsewhere. This makes addressing the core reasons they’re unhappy the key to reducing staff turnover.
Why are restaurant employees unhappy?
As anyone in the industry can attest, restaurants are challenging places to work, with long shifts, unpredictable schedules, and high-stress situations for both the front and back of house. After the onset of the pandemic, these concerns only intensified. Restaurant employees had to navigate the uncertain world of the pandemic, including mask mandates, social distancing, and customers and managers who didn’t take these concerns seriously.
Instead of getting more time to spend with their family, many employees took extra shifts to make up for those who were laid off or resigned at the start of the pandemic. Rather than stay home and socially distance for maximum safety, they worked long hours in kitchens to keep their restaurants from shuttering, often for modest pay.
But despite these sacrifices, many employees haven’t received proper appreciation from their employers. Countless stories have emerged about restaurant workers feeling overburdened, yet little relief coming from management. At the same time, many have shared stories of racism, discrimination, and sexual harassment in the workplace. Tired of tolerating this treatment, and in the hopes of pushing for more humane working conditions, employees are calling it quits in droves. Employers, on the other hand, are struggling to find people to take their place.
What are the best employee retention strategies for restaurants?
Addressing widespread concerns in the restaurant industry won’t happen overnight, and leaders will certainly have to work to retain top talent over the long haul. But despite the uphill battle ahead, there are plenty of steps restaurants can take now to boost morale and reduce staff turnover. Here are six employee retention strategies to consider implementing at your restaurant:
Show employees appreciation for their hard work. Given the sacrifices they make on a continual basis, employees want to know they’re valued by their employers. Showing appreciation for their efforts will help make the challenges worthwhile. A bonus, spotlight post on social media, or simple handwritten thank you note can speak volumes.
Send staff engagement surveys to gauge their satisfaction. Employees want to feel heard — plain and simple. Sending out anonymous employee engagement surveys gives them a chance to tell you what’s really on their minds without fear of repercussions. With their feedback, you can better gauge what needs to change at your restaurant to foster a more positive workplace.
Revamp your benefits package to meet evolving employee needs. More and more restaurants are offering jobs with benefits packages to attract and retain top-tier staff. According to Toast’s 2019 Restaurant Success Report, 31% of restaurants in the U.S. offer medical insurance to employees, with several major chains offering paid parental leave and tuition assistance.
Support employee mental health. The restaurant industry can be taxing, and the pandemic has only added additional stressors to an already stressful job. According to a recent study, the most commonly cited reason for leaving the hospitality industry in the U.S. was a desire for a new work environment. Fed up with high stress and difficult customers, employees are looking to other industries for work. If you can, providing extra paid time off can be extremely beneficial in reducing burnout and offering employees a chance to recharge.
Give employees autonomy over scheduling shifts. Unpredictable hours and a lack of advance notice for shifts can make working in the restaurant industry extra challenging for parents and caregivers. Allowing employees to choose their shifts and creating an advanced schedule gives people time to find childcare and other caregiving arrangements, if necessary.
Strengthen company culture. Building a more positive company culture requires a multi-pronged approach, including opening more lines of communication with employees, giving them more autonomy, and providing better benefits. But there are also simple measures you can take to boost morale, like organizing team outings or volunteer opportunities. These will provide bonding moments for your team so they deepen their investment in each other and your restaurant, and become more committed to its success.
Of course, implementing these strategies will take time and resources. It may be unrealistic to make all these changes at once, but simply committing to one or two in the near future can be the difference between an employee who’s eager for the next opportunity and one who’s willing to stick around. Even cost-effective employee retention strategies like engagement surveys and scheduling autonomy can help you stay competitive in this challenging market.
Is compensation most important?
While improvements to workplace culture will make a substantial difference in reducing staff turnover, pay and benefits are one of the top reasons why employees look for new work. Raising salaries and updating your benefits package could be the most impactful move you make as an employer this year.
With so many restaurants struggling financially, revamping your compensation package can require some preparation A solid business budget plan can make providing your employees with higher wages and better benefits an attainable goal.