From the summer 2018 of Canadian Restaurant & Foodservice News
By Seth Mohan
Employee retention is a major cause of concern for most restaurant owners. Restaurants are primarily in the people business, and must be able to hire and retain quality people. In a world where everything is going digital and we are losing the human connection, it is people that deliver the experience that ultimately creates relationships with your guests.
Historically, the restaurant industry has been a revolving door where high employee turnover is the norm. Now, with the added pressure of an increased minimum wage, hiring and training new staff is more costly than ever. Employee retention is not just a human resources issue, it directly effects your bottom line.
Seasoned employees waste less product as they typically make fewer mistakes. They help lower your labour costs as they are more experienced with the existing systems and can do the work more efficiently than someone just starting out. You can rely on less staff and still maintain the integrity of the product while providing a high level of service. The difference of one less body both in front and back of house operations is a significant reduction in your daily labour.
Employees that have been around for longer also have fewer liquid or chemical spills and breakage. This leads to a reduction in your comped meals for guests, as well as expensive workplace safety claims. Employee retention is an important aspect to focus on in your profit and loss reports.
Having understood how employee retention improves your bottom line, let us focus on what you can do to improve your retention. Start by getting a sense of employee turnover in your business. If this is something that you are not measuring, you could be losing a lot of money, as the hard costs of a single employee leaving are about $1,500, and this figure is much higher for managers. If you account for the hours it takes to interview, hire and train staff, you will see how your restaurant is bleeding money in operating like a revolving door. More importantly, it does not have to be this way. Operators are starting to challenge traditional hiring and training practices, and they’re innovating for better results.
Feedback is Key
Exit interview with outgoing employees can immediately improve your retention rates. Successful organizations have created exit interview templates for staff leaving the business; they ask a set of questions to determine the reason for their departure, and mine the outgoing staff for operational inefficiencies that can be fixed.
It is important to understand why your staff are leaving — most often it has something to do with their immediate supervisor. You can see patterns emerging if every exit interviewee is citing similar reasons for leaving. This is a simple 20-minute exercise that you can implement to start understanding and improving your retention rates.
This brings us to the top reasons why employees leave. Most employers believe that their staff leave in search of more money. According to thousands of exit interviews, this is rarely the case. The number one reason people leave a company is because there is no leadership that is guiding them on a growth path.
For example, if a support staff member feels that there is no opportunity for growth in their current role, they might start to shop around in other restaurants for server or bartender positions. This is where the leadership in your restaurant can have a big impact. By offering guidance and setting expectations from staff to meet, and rewarding them when those expectations are met, you can make your staff feel more engaged and looked after. This does not always have to mean a promotion, but even a show of public recognition can go a long way in engaging your employees.
Setting a Path for Growth
Whenever possible, try and establish a clear growth path for your staff and work with them to help them overcome challenges in their growth. Traditionally, chefs and bartenders have believed that the key to their long-term success is to hold on to trade secrets and not share them with their colleagues and juniors for fear of competition. Employers are often afraid of what happens if they train their staff really well and then they leave. I believe a more important question to ask is what happens if you don’t train your staff and they decide to stay?
In today’s world of open-source knowledge, the new way of being a leader is by teaching others and helping them grow, by sharing your knowledge freely and developing others to perform at their highest potential. To be competitive in the labour market, having a clearly defined growth path is a great way of engaging your employees and increasing retention.
The second biggest reason staff leave a job is because of the demands on their time and quality of life. With the advent of technology and the innovations it has brought to the foodservice industry, as an operator it is imperative you explore ways of making the lives of your employees easier. Millennials are less likely to work in the foodservice industry, which is going to cause an 11.8 per cent deficit in employees in the next decade. That’s almost 137,000 people, and with more restaurants competing for staff it will be even harder to retain employees.
Analyze Your Systems
Take a closer look at the systems in place in your business, and be on the lookout for inefficiencies. Inventory, accounting and supply chain management have been revolutionized by use of technology. You can utilize all of the advancements in those fields to save your employees time, which ultimately will save you money. For any business, that’s a key factor in any decision.
The third most common reason that people cite in exit interviews is inflexible schedules and low wages. They feel a disconnect between how much they’re asked to work and how much money they make. This is especially true for kitchen staff. Note that dissatisfaction with money is the third reason in the hierarchy of reasons of why employees leave a job.
Following the passing of Bill 148, restaurants are paying close attention to wages, as they want to decrease their labour costs. Rather than focusing solely on reducing the hours that your staff works, and sacrificing service as a result, the focus must be on making your staff more efficient so they can maintain the standard of service, while keeping your labour costs low.
Cueing in on Culture
Culture plays a huge role in increasing your employee retention. Workers today want to feel that they are part of a culture that they believe in rather than just working somewhere for a paycheque.
Culture is not just a buzzword that makes you seem fancy and hip; it is imperative for the success of your restaurant. One of the challenges of the restaurant industry is that it competes in consumer and labour markets. To be a strong force in both, having a clear and defined culture can give you an edge over your competition.
A restaurant’s leadership can play a major role in increasing employee retention by creating culture, empowering staff, promoting teamwork, and welcoming input from workers at all levels, so they feel valued and involved. Implementing these practices into your business will increase your employee retention by engaging your employees and earning their loyalty. Having a team of loyal and engaged people working for you can help create a feeling of hospitality and harmony for your guests when they walk through your doors.
Seth Mohan is Founder at Hospitality SOS. Seth has over a decade of experience in hospitality and foodservice. He specializes in helping restaurants create a culture, hire and train quality staff, and market to Millennials. You can reach him at email@example.com.