How to Reduce Employee Turnover in Restaurants

By Tessa Bahoosh|May 15, 2024|10:00 am CDT

Key Takeaways

• High employee turnover rates in the restaurant industry often stem from low wages, lack of benefits, limited growth opportunities, and general job dissatisfaction. Industry-specific challenges, like irregular hours and high-pressure environments, worsen the issue.
• Effective hiring practices can significantly reduce employee turnover. These include writing realistic job descriptions, identifying cultural fit, and streamlining the interview process.
• Comprehensive training programs (including a detailed orientation, ongoing professional development, and leadership training for managers) serve as powerful solutions for reducing employee turnover.
• Ensuring competitive compensation and offering attractive job benefits can greatly aid in reducing employee turnover and boosting staff satisfaction.
• Investing in technology can help you automate tasks, streamline hiring processes, manage irregular working hours, and provide digital training opportunities. Together, these outcomes can lower staff turnover.
• Partner with a Professional Employer Organization (PEO) to provide affordable, comprehensive benefits while relieving administrative burdens and attracting and retaining high-quality personnel.

Understanding the Causes of High Turnover in Restaurants

Restaurant employee turnover is an industry-wide issue, with separation rates far above most industries. To tackle this, it’s essential first to understand why these figures are so elevated.

Most staff departures can be traced back to common reasons. Low wages, lack of benefits, and limited growth opportunities are among the top reasons restaurant workers quit.

Industry-specific challenges, such as irregular hours, high-pressure environments, and the demands of customer service, can make retaining staff even more difficult. Working in a restaurant can be stressful. When that stress is coupled by a sense that employees are missing out on opportunities to grow, there are few reasons for them to stick around.

The journey to reduce turnover in the restaurant industry is challenging but not impossible. By understanding and addressing these causes, you can implement strategies to lower staff turnover in your restaurant business.

Effective Restaurant Hiring Practices

If you’re wondering how to reduce employee turnover in restaurants, you’ll want to start by getting familiar with hiring best practices.

High turnover often stems from mismatched expectations. If an employee anticipates one role but is met with a very different set of duties, chances are they won’t stick around for long. An important part of your retention strategy is fortifying your recruitment and hiring processes to make sure you’re attracting the right people from the beginning.

Crafting Clear Job Descriptions

Crafting clear job descriptions is a significant step forward in reducing staff turnover in the restaurant sector. Good job descriptions not only help you attract candidates who are well-suited for the role, but also set the foundation for new staff members’ success.

To begin with, be transparent about the variables of the job—such as irregular hours, high-pressure environments, and customer service demands. Be meticulous about the skills and experience you’re seeking and convey realistic expectations about duties and responsibilities. It’s better to hire someone who fully understands the role (including its challenges) than to onboard a new employee who feels like they applied for one job and wound up working another.

Focusing on Cultural Fit

Next up, take a look at cultural fit. You’re not just hiring for the present, but also for the future. Making sure employees are compatible with your restaurant culture can have a profound impact on their job satisfaction.

Not only that, but hiring candidates who don’t align with your workplace culture can introduce tension among their coworkers, causing a ripple effect of dissatisfaction. To avoid this predicament, ensure that potential employees align with your restaurant’s core principles.

Streamlining the Interview Process

After narrowing down your applicants, it’s time to set up some interviews. During interviews, you must both identify suitable candidates and impress them with your welcoming and efficient process. Applicant management technology can help with this.

During the interview, pay attention to the candidate’s communication skills, work ethic, and their vision for personal growth within the role. Provide a thorough overview of your business, including any core values and upskilling opportunities that might catch their attention. Remember, they are interviewing you as much as you are interviewing them. If you have stand-out perks or an excellent work culture, let them shine.

Developing Comprehensive Training Programs

One of the most effective strategies to reduce staff turnover in the restaurant sector is implementing comprehensive training programs. By adequately preparing employees for their roles and fostering a culture of continuous growth, you can boost job satisfaction, confidence, and longevity.

Orientation Programs

A properly structured orientation program is crucial in setting the stage for the employee’s journey. It’s in this phase that employees get familiar with the restaurant’s culture and the specifics of their new job.

Many restaurant employees are unhappy when thrown into their roles without a clear understanding of expectations or practical knowledge of how to perform tasks. A well-executed orientation program remedies this. This program should clearly outline the demands of the job and set realistic expectations from the get-go. The result is a more confident and competent employee requiring less supervisory intervention.

Ongoing Training and Development

Training during onboarding is important, but it’s not a one-time event. Instead, provide ongoing opportunities for your workers to develop their skills. The restaurant industry is fast-paced and dynamic, which means that continuous training is essential. Not only does ongoing training keep employees abreast with industry trends, but it also arms them with skills they can use to handle high-pressure environments more effectively.

Consider, for instance, focusing morning meetings on tactics to help employees remain calm during busy hours or to navigate conversations with difficult customers. You could also offer training on new technologies or additional skills—perhaps you have a front-of-house worker who’s interested in picking up admin skills, or a back-of-house employee who’s curious about bartending. These types of training opportunities show employees that you’re invested in their growth and wellbeing, leading to increased job satisfaction, better employee retention, and improved staffing levels overall.

Leadership Training for Managers

The role restaurant managers play in lowering staff turnover rates is often underappreciated. Effective managers not only drive restaurant operations but also directly influence team morale. Equipping them with leadership skills is a sure way of fostering an environment where staff feels supported and motivated.

Managerial proficiency requires more than culinary or financial acumen. Coaching skills, conflict resolution, and the ability to inspire and motivate are also vital. When managers lead effectively, the whole team thrives, reducing the likelihood of high turnover rates.

Creating a Positive Work Environment

A positive work climate is more than just a nice-to-have—it’s a must-have for running an efficient restaurant business. And since it directly contributes to reducing both burnout and restaurant employee turnover, your positive work environment is actually a key factor in your overall profitability. Here are some effective strategies for cultivating a positive environment in your restaurant.

Ensuring Competitive Compensation

While irregular hours and high-pressure environments are common reasons that restaurant workers quit, low pay and lack of benefits generally lead the charge. In fact, in 2021, 56% of restaurant workers who planned to leave the industry permanently said it was because of poor compensation.

Ensuring competitive pay and benefits is imperative for reducing restaurant employee turnover rates, but it’s easier said than done. Here are a few strategies to implement.

1. Verify that your base pay meets or exceeds industry standards. Keep an eye on compensation offered by local competitors to ensure pastures won’t look greener elsewhere.
2. Provide meaningful benefits: health insurance for full-time workers, paid time off, and employee meals can make a significant difference to the perceived value of a job.
3. Implement raise and bonus structures to reward longevity and performance.

By ensuring competitive compensation, you’re not just reducing turnover. You’re enhancing employee satisfaction, improving the service provided, refining your restaurant’s reputation, and ultimately, driving your profitability upwards. Boosting pay can attract high-quality personnel who align with your restaurant’s culture and values.

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Building a Supportive Culture

Creating a team-oriented company culture starts with hiring and training the right people, but it certainly doesn’t stop there. As a leader, it’s your job to inspire your workers with a sense of purpose, teamwork, and appreciation—whether they’re a line cook, a back waiter, a dishwasher, or a head chef.

All managers and supervisors play a part in this, so make sure they are equipped with the right skills to motivate their staff members effectively. Invest the time it takes to establish open lines of communication, giving every worker the chance to share their voice—and to receive constructive feedback about their contributions. Encourage your managers to recognize and congratulate team members on their successes, big and small. This culture of support will help employees feel like a part of something bigger, increasing the chances that they will be inspired to grow within your business.

Prioritizing Work-Life Balance

The next step to help reduce staff turnover in the restaurant sector is promoting work-life balance. This aspect is often overlooked in the industry, but it’s really quite simple. Treat your employees well, and they’re likely to stick around.

Respect working hours, offer flexibility where you can, and remember that your employees need downtime too. Rest and recuperation play a key role in work satisfaction and perseverance. You can help support your workers by incorporating their preferences into shift schedules and responding to their scheduling requests in a timely manner.

Of course, creating a supportive culture and prioritizing work-life balance won’t magically eliminate turnover. It’s a step in the right direction though, towards a better and more stable restaurant environment.

Addressing the Lack of Benefits with PEO Services

No matter the industry, lack of benefits is a significant driver of employee turnover. It’s an issue even more pronounced in the restaurant industry, often resulting in unhappy employees and compounding the existing turnover rate.

There are several clear reasons many restaurants fail to offer competitive benefits. Good benefits can be costly, and implementing them takes administrative time employers often don’t have. To combat this, many restaurants turn to Professional Employer Organizations (PEO) services.

A PEO is a co-employer that takes care of time-consuming HR tasks while leaving control of the business in your hands. This can be a useful solution for restaurant owners and managers who want a time- and cost-effective way of improving their benefits.

Access to Comprehensive Benefits

As a restaurant owner, you might find it challenging to provide comprehensive benefits independently due to cost and administrative difficulties. That’s where PEO services come in handy. Collaborating with a PEO has been an effective strategy for countless establishments seeking to lower their staff turnover rates. In fact, restaurants that partner with PEOs experience 10-14% lower employee turnover.

PEOs can provide employees with access to a wide range of benefits, including health insurance, retirement savings plans, and wellness programs. Because PEOs pool resources with the businesses they serve, these benefits often come at a lower cost than would otherwise be possible. As a result, you can gain access to a range of benefits that would otherwise be elusive for small to medium-sized businesses.

Administrative Relief

Offering benefits doesn’t just represent a financial commitment, but it also demands significant administrative effort. By partnering with a PEO, you’ll not only be able to give your employees valuable benefits—you’ll also get relief from the administrative tasks that go with them.

Typically, a PEO service will take care of many administrative responsibilities, such as benefits enrollment and compliance with labor laws and regulations. That’s crucial for the restaurant industry, which is subject to a wide range of complicated labor laws. Outsourcing HR and administrative tasks can be a major step towards improving compliance.

Attracting and Retaining Talent

Talented professionals are more likely to stay at your business long-term if they perceive that their needs are taken care of. A robust benefits package can be a powerful tool in the restaurant’s arsenal for this reason.

By offering important benefits, your restaurant can present itself as a more attractive workplace. This shows potential employees that you care about their well-being, and demonstrates your commitment to providing resources for their success.

Boosting Employee Engagement and Satisfaction

In the midst of battling high turnover rates, nothing is more vital than engaging your employees and boosting their satisfaction levels. Keep in mind, turnover isn’t just about the cost of replacement, but also about the price you pay losing a trained hand—time, effort, and money poured into that employee, all gone.

With a sector-specific problem like this, handling staff can become a complex or even intimidating task. But that doesn’t have to be the case. With a few strategies at hand, it’s perfectly possible to encourage employee engagement, happiness, and retention.

Offering Growth Opportunities

One of the major issues that leads to high restaurant employee turnover is the perceived lack of growth opportunities. People want to progress in their careers, especially in an industry where skills are honed over time and experience. To reduce employee turnover, start by developing a clear path for career advancement. This not only shows your staff that you’re committed to their growth but also provides a long-term perspective in their jobs.

• Implement training programs that help sharpen your employees’ skills.
• Allow cross-training so employees can learn various roles and diversify their skills.
• Encourage employees to pursue certifications or further education relevant to their roles.

Recognizing and Rewarding Employees

Recognition and rewards play a crucial role in employee job satisfaction. Everyone wants acknowledgement for their hard work and dedication, and offering this can increase morale and productivity. Recognizing an employee’s good work is a simple, cost-effective way to spark motivation, and serves as one of the effective strategies to reduce staff turnover in the restaurant business.

• Implement reward programs that honor outstanding performance with desirable incentives like gift cards or paid time off.
• Use team meetings or newsletters to highlight an employee’s achievements.
• Consider more personal forms of recognition, such as a handwritten note of thanks.

Encouraging Employee Feedback

One simple but essential aspect of improving your restaurant turnover is listening to your employees. Encourage an open-line for feedback to understand what your employees want, what makes them unhappy, or why they leave. Paying attention to these details can offer you insights on your specific retention challenges. This, in turn, will help you devise robust strategies to reduce your restaurant staff turnover rate and improve your profitability.

• Create a safe space where employees feel comfortable sharing their thoughts and concerns.
• Regularly conduct anonymous surveys to seek constructive feedback.
• Use the insights from these feedback sessions to make necessary changes, boosting overall satisfaction levels.

Technology to Support Staff and Reduce Turnover

One of the most effective ways you can reduce staff turnover in the restaurant sector is by integrating technology. In an industry notoriously inundated with irregular hours, high-pressure environments, and demanding customer service requirements, technology serves as a vital tool to alleviate pressure on workers while optimizing workflow.

Fourth’s end-to-end restaurant technology offers solutions to help streamline operations, reduce HR workload, and improve communications throughout your business. Let’s look at these solutions one by one.

Applicant Tracking

Improving retention rates starts with hiring. That’s why finding an applicant tracking system built for your industry is so vital. An integrated hiring and onboarding platform can tackle turnover before it even begins by helping you create realistic job descriptions, identify candidates who align with your restaurant’s values, and run efficient and inviting interviews. An integrated hiring platform like PeopleMatter can also provide thorough onboarding, equipping new hires to succeed and reducing their likelihood of leaving prematurely.

Scheduling Software

Digital scheduling software, such as HotSchedules, can manage irregular working hours and help employers easily create cost-effective schedules. Manually creating compliant schedules that honor employee preferences can be a major administrative undertaking. Luckily, strong software solutions can make this process quick and painless. In fact, managers who use HotSchedules are able to reduce the time they spend on administrative scheduling tasks by 75%.

On-Demand Pay

On-demand pay software is another solution that can greatly improve worker satisfaction. In the restaurant industry, where many workers live paycheck-to-paycheck, being able to offer wages early is an enormous boon. And the implications for retention are immense, with 79% of workers saying they would switch employers if a competitor offered on-demand pay.

PEO Partners

Finally, a co-employment partner such as Fourth PEO significantly reduces administrative pressure by taking payroll and HR tasks off your plate. Thanks to streamlined benefits and straightforward compensation, businesses that partner with PEOs see a 10-14% reduction in employee turnover, translating into a 27.3% annual savings rate.

By leveraging technology to support staff, boost employee morale, and streamline hiring, you are well on your way towards reducing staff turnover and promoting a successful restaurant environment.

Learn More

With over 20 years of expertise in data and analytics, Fourth is trusted by over 15,000 customers across 100,000 sites globally with 2.5 million users. Want to learn more about harnessing technology to lower turnover? Explore our solutions.

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