How to Decrease Restaurant Employee Turnover

Posted On: August 11, 2020
decrease employee turnover

It costs somewhere between $2,171 and $5,864 to replace your hourly employees.

Take a minute to consider how many your restaurant has replaced in the last year.  Then do the math.  It's going to shock you.

In the last twenty years, restaurant turnover rates have stayed in the 70-80% range. Compare that to 40-50% for the entire private sector.  The difference isn't some big mystery – food service is high-pressure, physically demanding work.  Employees simply burn out.

You can't do much about the stress and physical demands.  But there are definitely measures you can take to keep your employees feeling better despite them.  Here's the secret: when your employees are actively invested in their work, they're much more likely to stay and do a better job.

But how do you keep employees engaged?

Tip #1: Start with Management

Your best defense against turnover is front-line management.  Gallup found that employees are 59% more likely to be engaged in their work when they have a highly engaged manager.  As a result, these managers help their teams deliver better customer service and higher profitability.

Find (or promote) managers who will be heavily invested in the success of your restaurant and the performance of its staff.  In particular, you need managers who believe that human capital has enormous value, even in the food service industry. Then invest in their training, development, and success.

They're the ones who will execute every other tip on this list, so the right manager with the right support will create a ripple effect through your entire restaurant.

Make sure they're prioritizing your staff retention strategy, though.  A manager has many responsibilities that can distract from conscious efforts to crush turnover.  They should be actively implementing at least two of the following suggestions.

Tip #2: Show Employees Appreciation

Managers (and owners!) should provide regular verbal appreciation to all employees. Not just for outstanding work.  Acknowledge any improvements in their job performance. 

You should even be thanking them for performing their job as expected.  They've definitely had days where the "bare minimum" felt like too much. They don't always want to show up on time or handle guests efficiently and accurately.  But when they push through, your business benefits.  Acknowledge the value of that. 

When employees feel appreciated, they're less likely to leave you.

If you're meeting your attaboy quota already, then tangible rewards are a great boost.  Use them to incentivize behavioral changes you need in your restaurant.  They don’t have to come out of your budget.  They can be anything from a "get out of closing for free" coupon to bartered gift certificates from other local businesses.  Whatever it is, just make sure it's of value to the person that will be receiving it.

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Tip #3: Value Employee Opinions

Hold staff meetings and ask how they feel about recent changes, or whether they have ideas for serving your clientele better. Then implement some of the changes they suggest – they don't have to be huge.

Employees who feel ownership in your business are more likely to stay.

Also, have your employees take anonymous surveys every quarter. Ask the uncomfortable questions about low morale, staff tension, and ways you could be supporting them better.  Give them paid time to answer.  Not only will this give you the opportunity to address problems before they make people quit, but it will also show that you value your staff's happiness.

Tip #4: Provide Development & Promotion Opportunities

One of the top reasons employees leave is a lack of opportunity to advance.  That's why companies who offer ongoing training to their staff experience lower turnover.

You should be actively seeking ways to develop new skills in your employees. You should:

  • Know whether your employees want to advance into other positions and discuss how you'll work together to get them there. 
  • Offer employees the chance to try out supervisory responsibilities, then create a development plan with the ones who excel.  It'll lighten your managers' load, give employees new skills, and expand your coverage options when managers are sick or away. And eventually, you'll have a management opening. Replacing a manager from scratch can cost a whopping $15,271 (according to TDn2K).  Wouldn't it be better if you had a trusted employee ready to step up instead?
  • If an employee has goals for a different career path, consider ways you can help them gain experience.  Your restaurant needs more than front and back of house service.  You also need bookkeeping, marketing, graphic design, online reputation management, and a whole lot more. 
  • Not everyone will want or be able to climb a ladder.  So consider cross-training or offering skills development for their current job.  Consider conflict resolution training to front-of-house staff. Let waitstaff learn to also tend bar, or advance their knowledge of cuisine, beer, or wine to wow your guests. 

Tip #5: Compensate Them Well

If your employees can't meet their basic needs, it won't matter how nice you are or how many perks you offer. 

Hire at competitive wages and offer regular opportunities to earn more.  Conduct regular performance reviews and offer raises when you do. That directly incentivizes loyalty. 

Also, provide bonuses or raises when employees take on responsibilities, demonstrate outstanding performance, or cross-train into another area (flexibility makes them more valuable!).

And before you ever consider hiring, check that no one else needs extra shifts. 

Tip #6: Hire Wisely

When your turnover rate is high, you're inevitably short-handed.  When you're short-handed, your hiring standards can get a bit…well, desperate.

It's natural.  It's also a huge mistake.

Hire not just for urgency but longevity.  It's not about existing skills or experience.  Those are great, but they can also be taught and earned under you.  Focus on the less tangible things that can make or break an employee:

  • Employment history.  Do they bounce around a lot?  Maybe they've had a string of bad luck, but maybe it's a big fat warning sign. Don't necessarily count them out if you see this, but do ask about it and look for sincere, reasonable explanations.
  • Goals.  Ask about their short-term and long-term goals.  If they'll be leaving you next month for school, you want to know now. 
  • Soft skills.  List out the soft skills that you need most from someone in the open position—things like dealing with difficult customers and triaging tasks when a lot is going on.  Ask candidates to give you an example of a time they succeeded at that skill.  Soft skills are a bigger challenge to coach than hard skills. 
  • Attitude.  Are they optimistic or pessimistic?  Do they have realistic expectations for their job?  Do they consider the perspectives of other people? These things all make a world of difference in the type of employee they'll be.

Being patient can feel impossible in a crunch, but if you're not trying to hire for keeps, you'll never reduce turnover.

Tip #7: Make Onboarding & Training a Priority

Don't just hand new employees off to a peer and forget them. You need to build an intentional and consistent onboarding program to set expectations and teach them how you want things done. 

It takes resources.  New employees in food service take 7-11 weeks to become proficient.  But the better you hire and the better you onboard, the less frequently you have to do either. 

That doesn't mean you have to do it all yourself.  Make "training a new hire" one of those new skills that staff train into.  And consider peeling some portions of training off everyone's plate by using online coursework designed for the restaurant industry. 

Tip #8: Take Exit Interviews Seriously

The first step to taking an exit interview seriously is…to do one.  Ask employees why they're leaving and how you can improve your employees' experience.  Here's a great restaurant-specific guide on how, why, and what questions to ask.

Consider the merits of all feedback seriously.  Keep an eye out for patterns and recurring themes.  If one outgoing employee says you have unreasonable expectations – well, maybe you do and maybe you don't. If five outgoing employees say it, then there's at least a grain of truth.

Bottom Line

Retaining valuable employees will take effort and resources, but when you look at the cost of turnover, you'll find that it's worthwhile.  You'll spend less money in the long run and have happier, more effective employees. 

You can reduce your training costs by relying on a trusted and state-approved online course provider (like us!) to cover topics like alcohol service laws, food safety basics, allergen training, and food safety management.

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