The restaurant industry is undergoing a staffing crisis, with employee turnover rates as high as 150%. What can restaurateurs starting a food business do to put an end to the cycle?
The Food service turnover crisis
Globally, the food & dining industry is going through a golden age. Restaurants are thriving, and the marketplace is booming with ambitious young entrepreneurs opening new dining concepts left and right. And while growth and job creation is great news for the industry, it’s also caused an alarming gap in the availability of good restaurant talent – who now have the ability to go wherever they want, whenever they want, and practically name their price.
Estimates say that at the start of 2019, employee turnover rates for the food service industry were as high as 75%, meaning restaurants can expect to lose three out of four employees over the course of a year. In the quick-service industry, this rate can be as high as 130-150%.
And surprisingly, it’s not restricted to certain job profiles, either. Restaurant Insider reported that 42% of front-of-house employees leave within the first three months, and that 43% of managers leave within a year.
How it's affecting business
Employee turnover is one of the single biggest costs for restaurant owners. Estimates say that businesses are losing an estimated $3,500 every time an employee leaves. And that’s just the cost of hiring and training a new member of staff.
A shortage of staff also heavily impacts the performance of the business, and the well-being of those who stay behind. As employers seek to fill in the gap, other staff members have to compensate to keep things running (somewhat) smoothly – and burnouts and walk-outs are almost inevitable. It’s actually not uncommon for the departure of one staff member to trigger others to follow suit.
But what about the diners? Unfortunately, diners can always feel when there’s a shortage in staff – whether it be in lackluster food, poor or inconsistent service or reduced opening hours – and we all know what happens when customers get disgruntled.
It’s no wonder, then, that many restaurants – especially fast food restaurants – are turning to robots and ordering kiosks to automate the process. In fact, experts predict that fast food will be one of the first job sectors ruled by robots.
But why are they leaving?
There are several factors driving the churn of employees in the restaurant business.
Seasonality plays a big role.
A lot of restaurants hire additional staff to bulk up for the summer months – when everyone’s out and about, enjoying their lives and hitting up patios. But once fall comes around, most of these temporary employees head back to school or move on to other jobs, which inevitably leads to a big reduction in headcount.
A lot of restaurants hire young staff
Teenagers or young college students – who are only looking for a temp job to earn some extra money. In fact, research shows that the restaurant industry employs about 1/3 of all working teens, who usually only work part-time or when their schedule allows it. So they’re not really in it for the long run, either.
The food service industry is booming
Then there’s the fact that industry boom has created so many opportunities for employees to choose from, that many of them develop a 'free agent’ mentality where they just jump shop at the slightest bump in the road.
How a restaurant is managed also plays a huge role
Among the top reasons why employees leave are:
- They feel underappreciated
- They don’t feel their work is meaningful
- There’s no room for growth
- They don’t agree with the management style
- They don’t get along with their coworkers
- They’re not empowered
So what can you do to keep your employees happy?
- Try to understand why. When possible, conduct exit interviews to understand why your employees are leaving, and what could have been done to keep them satisfied. Try to have an open and honest conversation, and be humble; you’re never too experienced to learn from your mistakes.
- Respect their schedules. Take another look at your shift schedules to make sure that nobody’s being over-worked. Everyone needs time off to recharge, even your best employees. But remember that not everyone can handle (or wants to take on) the same workload. Not every restaurant business have the scale to try out shorter work-week (e.g. Shake Shack), but be open with your staff members about their schedule preferences, and try to be accommodating.
- Conduct a salary review. Don’t be stingy when it comes to rewarding your staff for their hard work. A lot of times, staff members leave because their salaries are too low, or because they aren’t getting the benefits they need to get by. Benchmark against the industry wages in your area, and know what your competitors are offering. Consider raising the bar to offer competitive compensation packages that will be difficult to turn down, and make sure to reward them for their hard work and loyalty.
- Start an employee recognition program. These types of programs help your staff feel like they’re working toward a common goal, and will give them a sense of belonging. Employee turnover drops dramatically when they feel their contributions matter. Whether it’s in the form of a plaque, a prize or a bonus, give them something to be motivated about.
- Care for their well-being. While work schedules and pay are important, remember to care for the mental and physical well-being of your staff, too. Create a safe space where they feel accepted and mattered, and where they can be open about their expectations.
- Give them growth opportunities. Whether they’re waiting on tables, cooking or the restaurant manager, every employee wants to see opportunities for growth and plan for the future. After-all, nobody wants to be stuck in a dead-end job. Feed back to your employees about how they’re doing with regular performance reviews. Set new challenges for them to work toward (with clearly defined goals) and move good employees up the ranks.
- Give them on-the-job training. Help them be the best version of their professional selves by providing ongoing training – whether it be in POS, service, menu knowledge, food safety or in keeping them in the loop of the latest industry trends. Having well-trained and well-rounded employees will not only make you look like a pro, but will also increase productivity and decrease turnover rates.
- Hire a good fit. Do your due diligence when it comes to the hiring process. Choose people that jive with your company’s vision, and know what they’re in for when it comes to working in a restaurant. Call their references, and understand why they left their previous position, and what they’re looking to get from working at your establishment. Look for people who have experience and a proven track-record of working in a similar position, and are open-minded, team-players and have a positive attitude towards new challenges.