Employee retention and change
69 Tips for better food and beverage profit
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NEWSLETTER SIGNUP

How do you reduce staff turnover in your restaurant? Follow these tips to work on that risk of high turnover in the hospitality sector.

It’s never business as usual and change is what we do every day. The restaurant and hospitality sector is often at the leading edge of change and change management, and not always because it wants to be, but because it needs to be. With wafer-thin profit margins and employee turnover rates 20% higher than all other industries combined, it makes sense that the only thing left to do is manage change.
First of all, let’s look at some stats.

Turnover rates for the restaurant–hospitality sector in the US (Bureau of Labor Statistics):

  • 2011 – 58%
  • 2012 – 61%
  • 2013 – 63%

In 2013, for all other industries combined, the turnover rate was 42%, still not stellar, but an improvement over the restaurant–hospitality sector. Further, the Washington State Restaurant Association pegs the replacement cost of a frontline employee at about $5,000. This means that if you have an average staff complement of 10 and a 63% turnover rate, it would cost your business more than $31,000 a year in replacement costs. To make that clear, it comes off your bottom line! If any of these employees hold supervisory or management positions, the cost of replacement is exponentially higher. Some estimates put it at more than $15,000 to replace a supervisor!

Some of the common reasons employees give for leaving a company:

  • Lack of respect in the workplace
  • Lack of fair compensation (beyond minimum wage)
  • Lack of shared goals and values (this is a hiring challenge!)
  • Work-related stress
  • Poor company culture
  • Competitors offer a higher wage, more benefits

The insight here would be to offer better overall workplace conditions. Really, the opposite of everything I just listed. In addition, here are five tips that can help to increase staff retention.

  1. Maintain and enhance a professional workplace, leading by example
  2. Supervise the way you would like to be supervised (part of the Golden Rule!)
  3. Open communication at every level; remember who all your stakeholders are
  4. Help your employees to succeed in their own career goals
  5. Maintain and enhance a friendly work environment

​The reasons and the tips I have highlighted to alleviate the challenges of employee turnover are universal to any business or establishment, but are seemingly more critical in hospitality given the turnover rates. Identify your needs and evaluate what you need to change today to bite away at those turnover rates. I’d love to hear about your challenges and successes with this: it’s definitely change for the long haul!