Labor retention continues to be a significant challenge in the food service industry.
Restaurants experience annual turnover rates that are greater than any other sector, sometimes exceeding 70%! When the employee turnover rate is high, the costs of hiring and training new employees can really cut into potential profits. With increases in costs, labor competition, and minimum wage rates, it’s becoming even more important to focus on retaining the right employees.
A little bit of investment in retention can quickly pay off in labor costs. Here are five tips to help improve labor retention in your restaurants.
1. Focus on Training and Development – Create a workplace culture committed to your employees’ professional development. Remember, a large portion of the restaurant workforce is comprised of teenagers and college students. There was a time when this demographic was satisfied with just working entry level jobs at minimum pay, but times have changed. These young adults desire more opportunities for growth and will appreciate a company committed to helping them. Consider offering management career tracks, assigning mentors, and providing regular training throughout the organization.
2. Align Your Leadership Team – Sometimes, turnover rates aren’t a reflection of the employees or the company. An ineffective leader can wreak havoc and destroy a team of good employees. Invest time into developing your company’s leaders to reflect the values and mission you want your organization to represent. And don’t be afraid to terminate the ones who don’t seem to be a good fit. The leaders you employ set the tone for everyone under their leadership. It’s been said that, “Employees don’t leave companies; They leave managers.”
3. Initiate Friendly Competition – Think about ‘gamification’ as a way to improve engagement. Setting up periodic contests can motivate employees to go above and beyond in their work. The person who earns the most tips could be rewarded with a day off for providing outstanding customer service. Or everyone could receive a free meal if the company reaches a monthly sales goal. To keep turnover at a minimum, employees need to be motivated and inspired on a regular basis. Friendly competition coupled with rewards definitely keep the workday interesting.
4. Consider Adding Benefits Packages – One surefire way to ensure your restaurant stands out from the crowd is to offer employee benefits. Restaurants aren’t usually expected to provide benefits to hourly workers, so this would be an incentive for workers to think twice before leaving the company. It’s not easy to find a part-time job that provides sick or parental leave. College tuition assistance would be great for attracting and retaining talented individuals. With the rising number of students in student loan debt, having a job that eases the burden could be enough to secure employment until graduation.
5. Use Technology to Reduce Hassle – Challenging daily processes can get in the way of an employee’s success and engagement. Mix up with POs, schedule confusion, disorganized inventory management, etc., all contribute to frustration at work and increase employee turnover. Identify and optimize the processes that might be causing problems for your stores. Pen and paper scheduling, spreadsheet inventory, and multi-system processes are just creating added strain. Look into streamlining your store and corporate processes with restaurant management software solutions to help simplify labor, scheduling, inventory management, data visibility, and enterprise reporting. Comprehensive solutions can help you manage all of your data and processes in one place, freeing up your employees to focus on the good stuff.
High turnover is not new to the restaurant industry, but as our tools and insights improve, so should our labor retention efforts. Some causes of employee turnover are unavoidable, but many are not. The most successful restaurant owners get ahead not by accepting the status quo, but by challenging their assumptions and considering innovative ways to combat labor management issues.
Restaurant Magic Software has been providing advanced software solutions to the restaurant and hospitality industry for over 20 years. The robust Data Central Management Suite, the flagship product, is a powerful and flexible application that takes advantage of the latest technology trends to offer premier processing and analytics. With advanced forecasting, predictive scheduling and mobile technologies, Data Central has something for every problem. To learn more about Restaurant Magic Software and its products, call us at 1(800) 933-4711 or visit the website at RestaurantMagic.com.