As much as no one wants to admit it, the restaurant industry has a unique tendency to chew people up and spit them out, all in a matter of a few months.
The restaurant industry was struggling to maintain employees at its locations long before the coronavirus became a thing. As much as no one wants to admit it, the restaurant industry has a unique tendency to chew people up and spit them out, all in a matter of a few months.
With the pandemic loosening up and hungry customers opening their wallets again, restaurants are again pulling in higher revenue and generating more sales. However, the employee retention problem restaurants had been grappling with for several years has blossomed into a full-on crisis.
Unemployment in the United States was steady at under 4% in the months leading up to the pandemic before spiking to 14.7% in April 2020, shortly after lockdowns and closures hit the restaurant industry. Before the pandemic, restaurants couldn’t hire staff because there were more jobs available than people looking. This ability to pick and choose left restaurants struggling to compete for employees.
Once the pandemic hit and millions of people found themselves out of a job, the industry continued pushing along with barebones teams just to survive. Today, the U.S. is loosening restrictions, but those employees aren’t coming back. Whether it’s a legitimate fear of the coronavirus, better pay to stay on unemployment, or the allure of a less stressful and higher paying job outside the industry, restaurants have found themselves in an undesirable position.
Restaurant Employee Turnover Has Become the New Normal
With that said, part of the issue stems from high industry turnover. According to a January 2021 report from the U.S. Bureau of Labor Statistics, the turnover rate in the hospitality industry in 2020 reached an astronomical and very concerning 130.7%. This is up from an already way-too-high 78.9% the previous year.
If those numbers aren’t concerning enough for an industry already facing labor issues, perhaps the bottom-line figures might be. A 2006 Cornell Hospitality Report pegs the loss of revenue at close to $6,200 each time an employee exits. Between recruiting, hiring a new person, training them, and lost productivity, the cost can leave restaurant owners and operators reeling.
As with any relationship, people will only stick around if they feel valued, involved, and part of something bigger than flipping a burger or working the drive-thru. Fostering an encouraging and positive environment for your staff can quickly turn morale around and empower them to succeed. Developing each person’s skills and cross-training them to be effective in multiple areas of the restaurant creates a team that is excited to come to work and willing to go above and beyond to get things done.
And it all starts from day one.
Make the First Day Memorable
Starting a new job anywhere can be difficult and stressful, but takes on an added layer of pressure when employees are thrust into a speedy restaurant environment. First impressions count and can often set the tone for how someone views the work they are doing.
“Employers can build up first-day excitement and engagement for their new employees by offering an immediate reward and celebration platform,” said Pete Ginsberg, CEO of Onaroll, an employee engagement app. “Great retention starts at the first shift, so it’s important to celebrate that milestone! The same is true for the first week and the first month on the job. Onaroll automatically identifies and celebrates these key moments so that operators can focus on the rest of their business.”
How easy is it to make a great first impression with a new employee?
– Greet them personally and make them feel welcome
– Show them around the restaurant and introduce them to the team
– Give them some swag
– Set some clear and manageable guidelines
It doesn’t take much effort to help someone feel welcome and at home in their new environment.
Keep Employees Engaged
You don’t need a business degree to know that disengaged employees can quickly become an anchor for your restaurant. But did you know the average unengaged employee can cost you up to $3,400 per $10,000 in annual salary? And that’s just one person. Imagine taking on a particularly hectic lunch rush with a bunch of people who would rather do just about anything else than deliver great guest experiences.
“We love to say that play inspires and carrots motivate – but what does that actually mean? To keep team members highly engaged, we celebrate the big wins and the small wins,” Ginsberg said. “In practice, this means constantly looking for fun moments to reward team members. Appreciation goes a long way, but we’ve found that the combination of appreciation and exciting, relevant rewards is the most effective way to keep team members highly engaged.”
Whether it’s something as small as celebrating a birthday or work anniversary, creating a fun workplace tradition, or even allowing them to have some control over their own scheduling and swaps can make a world of difference. Restaurants also quickly become family-like atmospheres for staff members, so get to know your employees and connect with them on more than the surface level.
Engaged employees are also more likely to want to learn new skills, opening the door for cross-training opportunities. Not only will employees who are cross-trained be able to jump into the mix when a fellow co-worker calls in sick, but it also mixes up the usual routine.
Understand Mentorship vs. Management
There are seemingly thousands of books that delve into the differences between a mentor and a manager, but both are needed to create a rewarding and profitable restaurant. Typically, managers are focused on making sure everything gets done. They are the day-to-day generals who work in the trenches alongside their staff to serve guests, make sure the lunch hour rush goes smoothly, and keep tempers from flaring.
Mentors, on the other hand, are big-picture people. Their role is to make sure employees have the resources and information they need to grow their careers. They’re also typically people who have been in their mentee’s shoes, gathering valuable experience that they can then pass on to newer employees.
“Our team is trying to upend the traditional boss-employee relationship by creating a team-based approach where everyone is properly aligned,” Ginsberg explained. “If a team member hits their goals, they are personally rewarded, and the important business metrics improve. A true win-win.”
Once the team is aligned and working toward the same goal, it is easier to pinpoint issues and quickly address them. It also ensures everyone is working toward the same goals.
Offer Perks, Incentives, and Thank Yous
As rapper Open Mike Eagle once said, “A little recognition makes me do better gladly.” Those words are especially true for the people working in our local restaurants.
According to a 2018 ADP Research Institute Study, only about 16% of employees globally were fully engaged with their work. The percentage is even worse in the U.S., with only about 11% of non-team employees feeling engaged. While the number seems frightening, the study also noted that employees on a team were 2.3x more likely to be fully engaged with their work.
When people work together to achieve goals, everyone is invested in the same result. Allowing employees to get rewarded for hitting restaurant goals, such as a speed of service time, customer satisfaction rating, revenue goal, or even showing up to work on time does more than simply give them a carrot on a stick. It can make the team more confident, give them more pride in their work, and ultimately keep them happy for longer. Happier employees are proven to stay longer than unhappy ones, will be more productive, and even help drive recruitment efforts.
“People crave recognition and wins, and Onaroll allows them to feel that satisfaction daily without anything slipping through the cracks,” Ginsberg said. “Shift work jobs typically ‘reset’ every day. However, with us, each day builds on the last, creating more purpose and excitement for team members.”
Make Sure Staff Members Are Being Paid Fairly
Base pay has become a point of contention for both employers and employees amid the “Fight for $15” that has sparked strikes and protests across the country in recent years. Despite what seems like a major gulf between the two factions, several brands have been able to pay their employees well, reduce turnover, and lead the industry by example.
Chick-fil-A has grown into one of the largest brands in the United States because of its friendly employees, quick service, and great atmosphere. However, behind all that is an environment that fosters confidence and rewards its employees for going above and beyond. According to the chicken concept’s website, employees are often paid above minimum wage, provided leadership training and opportunities, and even scholarships to help team members attended college.
Despite what seems like massive investment in their employees, Chick-fil-A has one of the lowest employee turnover rates in the quick-service restaurant industry. In 2019, the company experienced only 60% turnover compared to about 130% for the industry at large.
The Future of Employment
As with most industries impacted by COVID-19, restaurant concepts will bounce back and employees will eventually return to work. When they do come back, keeping them engaged and excited about the work they’re doing will go a long way toward reducing turnover and developing the next generation of managers, operators, and franchisees.
In the meantime, the servers, cooks, and fast-food workers who show up each day for a paycheck can still be engaged with – and will need to be – if we expect to reduce restaurant turnover to a more acceptable level. The brands that have taken employee morale and productivity to heart are the same ones who have succeeded and thrived, even with the difficult environment.
As Jack Welch, the former CEO of General Electric, once said, “There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”
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