Turnover is a common obstacle that many businesses, especially restaurants, will have to endure. According to the National Restaurant Association, employee turnover for the restaurant industry amounted to 61% in 2016. This can be attributed to young people using restaurant jobs as an entry point for their careers. However, there are other factors that drive employees to leave.
For example, low morale, lack of benefits, miscommunication, and poor work life balance can result in low employee retention rates. To safeguard their reputation and growth, restaurateurs need to implement best practices to keep employees. These methods include having team building events, giving promotions, and using communication tools. With this, restaurants can maintain their talented staff, among many other benefits.
5 Reasons Why Employee Retention Matters for Restaurants
Employee retention is an organization's ability to retain its staff members. This is closely tied to employee turnover, which is the rate at which staffers leave a company within a given period. Among other businesses, restaurants experience high employee turnover. Industry statistics show that fast-food chains have turnover rates as high as 130% to 150%. Panera Bread estimates that they lose about 100% of its workers each year.
With turnover being prevalent in the industry, restaurant managers need to take steps to improve retention. By maintaining employees, they can focus on other key tasks, instead of recruitment and onboarding. Other reasons as to why employee retention is important to restaurants include the following.
1. Cut Down Employee Payroll Costs
When employees consistently leave a company, owners must hire new people to take their positions. This means the business must spend more money recruiting, training, and onboarding new employees. According to research, restaurants lose about $150,000 annually on average because of employee turnover.
By implementing an employee retention strategy, restaurant owners can cut down on payroll costs. They can also save time and energy spent on training new hires. This is important because the business can then invest its resources towards product development or restaurant management.
2. Bring Down Food Expenses
New and inexperienced employees can increase food costs. For example, when training new line cooks, managers will need to do demos and have the hires test cook. Additionally, new staff members are likely to make mistakes during their first few months on the job. On the other hand, if the restaurant was able to maintain its staff, everyone will be experienced.
With skilled staff members, there will be fewer order inaccuracies, miscommunication, and waste. In turn, food-related costs will decrease. Restaurants' average food costs should be between 28% and 35%, according to statistics. Therefore, it is important to be diligent about employee retention to protect the restaurant's bottom line.
3. Enhance Restaurant Efficiency
An effective employee retention strategy will boost restaurant efficiency. Since all staff members are experienced, the workflow will be streamlined and seamless. There will be fewer delays due to slow-moving workers and mistakes. Additionally, employees and managers will not have to pause food prep or customer service to train new hires. This efficiency creates a positive dining experience for guests and can increase customer satisfaction.
4. Make Room for Innovation and Creativity
Long-time employees know the ins and outs of a business and are able to generate innovative solutions to problems. They can also quickly adapt to new situations and difficulties, as well. On the other hand, if a restaurant has high turnover, any issues in the operation may be prolonged due to inexperience. Managers will then have to spend more time solving issues themselves, rather than cultivating the business.
Furthermore, long term workers have a better understanding of the eatery's consumer base. This means they can contribute informed insights on menu items and operating procedures. They can also come up with creative ideas and improvements to help the restaurant thrive.
5. Create an Enjoyable Work Culture
Improving employee retention will help create a positive and enjoyable company culture. Working at a restaurant can be stressful and time-critical as it is. And if employees consistently come and go, these issues can be amplified. For example, current staffers may feel distressed and pressured if they always have to work with inexperienced team members. They may quit and the cycle of turnover will continue.
But with successful employee retention, staff members will have time to get to know one another. They will get the chance to learn how to communicate and work with each other. Additionally, they will have a better understanding of how to help and resolve issues together. This makes going to work at the restaurant less stressful and more positive.
Key Takeaways to Employee Retention
Employee retention is a company or organization's ability to retain its employees. This is similar to the concept of employee turnover, which is the rate at which employees leave to find a new job.
Businesses in the restaurant industry are known for having high turnover rates. Therefore, restaurateurs need to take steps to improve their employee retention.
There are many reasons why employee retention is important to restaurants. This includes cutting down operation costs, enhancing efficiency, promoting creativity, and cultivating a positive work culture.
By implementing the best employee retention strategies, restaurants can improve their profitability and overall bottom line.