8 Ways to Retain Restaurant Employees and Keep Them Happy

Staffing is one of the biggest headaches in the restaurant industry. So much so, that 59% of operators named staffing as their top challenge to success. Much of this can be attributed to the high turnover rate experienced by the restaurant industry. According to Toasttab.com, the average tenure of a restaurant employee is one month and 26 days. That is a lot of turnover that is costing your business about $3500 every time someone walks out the door. You might think “Well that is just how the industry goes”. Believe it or not, there are some strategies you can implement right now to increase the tenure of your employees, boost morale, and increase profits.

Measure Tenure

If you have done your work and hired a good staff that you want to keep, the first thing you need to do is start tracking how long your employees have been with your business. Understanding how long an employee stays with you, in all positions, can help you understand what you need to do to keep people. For example, if your average server stays for 11 months, design any incentives you may have around that. Use this information to extend the tenure of your employees. You can implement additional training, recognition, or pay raises at 6, 12, and 18-month intervals to see if it can help to extend the average.

Ultimately, tenure reveals more than turnover does. But you can’t manage it if you don’t measure it.

Stay Interviews

Hiring interviews, and occasionally exit interviews, are a common practice, but implementing “Stay” interviews can have huge benefits. Take the time to sit down with a veteran staff member to better understand why they are happy with their job, and why they have chosen to remain an employee.  Also, give them the opportunity to talk about what you can do to sweeten the deal and keep them longer. This can help you put the finger on the pulse of what you are doing right, and some areas that could use improvement.

Memorable First Day

An employee’s first day is just like a first impression; you want it to be a good one. Do your best to demonstrate energy and enthusiasm. Be visibly passionate about the company culture, values, and mission. The easiest way to do that is by creating a great company atmosphere. An employee won’t want to stay long if all the other employees are complaining about their jobs and how much they want to leave.

Re-Recruit

Every shift should be a reminder of why your employee wants to stay with the business. Now, we all have bad days, but do your best to bring focus and energy to every shift. As a leader, you set the tone for the rest of the team. This can be accomplished by really focusing on the company atmosphere. Make sure your restaurant is a place that you and your employees are excited to return to shift after shift.

Encourage Mentoring Culture

By assigning a mentor to a new employee, you create a culture that fosters connection and allows a veteran to share insights they have acquired through experience. New employees can also become easily frustrated when not given the proper training to do their job correctly. Implementing a mentor program can help cut down on this frustration. Try to provide a mentor for every position; a dishwasher can benefit from a mentor just as much as a line cook.

Identify Stressors

Stress is inevitable. You won’t be able to fix every situation, but there are some you will be able to. Do your best to identify stressors and eliminate them if possible. Dissatisfied employees often report feeling that no one is in their corner and they receive minimal support. Talk to your staff regularly about their pain points and ask them how you can help. As an added bonus, this can often lead to improved processes.

Provide the Ladder

Employees become frustrated when they feel as if they are stuck in their job with no room for improvement. Chances are that isn’t the case, they just don’t know what they can do to advance their position. Providing a clear outline of what employees can do to progress is beneficial to them and you. It helps with retention when employees have a clear outline of how they can progress.

Thank Your Staff

It seems too simple, that saying “thank you” would turn things around with an employee. Thanking staff is easy to do but often forgotten. It is an uncomplicated way to let your staff know that you appreciate their work. This will also help to open-up lines of communication between you and your team. Listening to them can give you an insight into problems you had no idea were occurring.

The high turnover rate of the restaurant industry is not only a huge stress to operators and costs a significant amount of money. By listening to your staff, measuring tenure, and improving the atmosphere you can increase employee retention and profits.

Improving Employee Retention in Your Restaurant

Ask any restaurant owner about something they struggle with, and the problem of keeping good employees will make the list almost every single time. The real issues begin when employees don’t stick around very long, leaving owners understaffed and scrambling.

The restaurant industry offers a unique flexibility of schedule that appeals to many. Whether it is the student looking to work when not in class, or the performer looking to subsidize their passion, the industry attracts all kinds of people with unique scheduling needs. That also means that those same employees might not see their job at your restaurant as their top priority. The restaurant industry has an above-average turnover rate. In 2016, the general industry employee turnover rate was 46.1%. In the restaurants and accommodations sector, the turnover rate was at a whopping 72.9% in 2016, up from a rate of 72.2% in 2015, that is a pretty big difference.

Now you might be saying to yourself, ‘Well everyone in the industry has a high turnover rate, that is just how things are. Why should I make changes to improve my retention rate?’

Good question. Other than the immediate struggles of being left understaffed, every time you lose an hourly employee it can cost upwards of $3,500 to hire and train a new one. Now imagine every time someone walks out the door, $3,500 of your dollars are walking out with them. Really puts things into perspective, doesn’t it?

Hiring Employees

A great way to improve your employee retention is by starting at the very beginning, and by that, I mean the hiring process. The first thing is having patience. You may feel like you are in a rush to make sure that all your shifts are covered, but in the long run you will thank yourself for selecting the right candidate and not just the first person to walk in the door.

One of the most common practices in the industry, when looking at a potential employee’s resume, is to hire someone with experience and not consider your company culture. An employee with a positive attitude can be trained to do things the way that you do them, but a bad fit for your culture will always be a bad fit. An employee that is a poor fit usually leaves and ends up costing you money. In that case, you’ll be back to square one, typically with a few bad stories to tell.

Another thing to look at while you have their resume in your hand, is the frequency at which they move jobs. If someone switches places of employment every few months, that is a red flag that they won’t have a problem doing that to you. Take time to consider why they might need to switch jobs so much.

Hiring Managers

If you are seeking a manager, consider hiring from within your restaurant. Let employees know that you are looking for someone to help with special projects, you may be surprised by the response. Employees you would not have originally considered may be looking to take on more responsibility, while those that seem more likely to jump at the opportunity are happy to stay in their current position.

Through these special projects, you will be able to determine who is good at doing the work of a manager. If they are not good at the special projects, don’t get upset with them, don’t fire them, simply move them back into the current position without participating in any more different projects. This way you don’t lose an employee, but you are able to determine who can handle the role of manager.

For those that excel, approach them with the idea of becoming a manager-in-training. If they are onboard, start training them for the position. Some will do well, and some might not. For those that don’t, you now have a well-trained supervisor that can handle things on occasion and those who do wow you can now become a manager.

There are many benefits that come with hiring within your company. When you hire from within the company you know the person already fits your company culture, they won’t have to deal with your other employees testing them as a newcomer, and they know how to do things your way.  Another benefit is that current employees will see that you promote from within and will have something to motivate them to continue to do their best in hopes of advancing.

You will need to consider the best ways to transition an employee to the manager roll in terms of their coworkers. During your special projects, be sure to observe how they handle having authority over their coworkers, and probably friends. You don’t want them to be a doormat, but you also don’t want them to overcompensate and become too harsh. It is a fine line that needs to be observed.

Training

The training process is a critical time in helping to improve employee retention. It is tempting to pair your new employee with a veteran and leave them to it with minimal supervision. The problem is, if the veteran employee has developed bad habits they could be passing them on to your entire staff.

Train your employees on the correct way to do their job and when. When training, it is also critical to remember that people have different ways of learning. Some learn by seeing, some by hearing, and others by doing.  Try to incorporate all aspect when doing your initial training.

If your new employee makes mistakes, don’t immediately jump to the conclusion that they are a bad fit. When something is done incorrectly, retrain them on the proper way to do it. After the third time they make a mistake, you might want to sit down and evaluate whether they don’t know how to correctly complete the task or they simply don’t care.

A consistent orientation process and ongoing training will help to keep all your employees on the same page with the way you do things, creating an overall more pleasant work environment.

The Competitive Edge

There is always the concern that a well-trained employee might simply decide to work for a different restaurant. A few things can be done to try and convince your staff that your business is the best fit for them.

The most obvious way to keep employees is by offering them competitive pay with the opportunities for increased pay. Nurture long-term goals and provide the opportunity for advancement. Pay for classes and training, an example of this would be to pay for ServSafe certifications.

Do your best to schedule your employees well. Don’t always give the same employees the slower shifts, and give the occasional shift choice. That being said, we all know that sometimes you can’t make everyone happy, occasionally some people won’t be happy with their shift and that is okay.

Also, don’t underestimate the value of free incentives such as offering a shift meal. It will cost you a little but pales in comparison to the costs of constant hiring and training new employees.

Leaving

Sometimes no matter what you do, an employee is going to leave. This is a great opportunity to have a candid conversation with them about why they are leaving and if any changes could be made to your process to encourage employee retention.

One thing you can do is conduct an exit interview and ask them a few questions about their time with you.  A few questions you might like to ask are:

  1. Why are you leaving?
  2. What could we have done better?
  3. What does your new company offer that made you decide to leave?
  4. Were you comfortable talking to your manager about work problems?
  5. Were you given the tools to succeed at your job?
  6. What did you like most about your job? And what would you change about it?
  7. What was your best or worst day on the job?

Keep in mind with an exit interview that the employee might say some things you disagree with or don’t like hearing. Try to keep an open mind. Don’t argue with the exiting employee. It won’t do either of you any good to end your relationship on bad terms. Most likely you won’t seriously consider making all the changes they suggest but they might be able to give you some insight into a problem or educate you on a problem you didn’t even know was happening.

Retaining good employees is a struggle across the restaurant industry. By taking the right steps during hiring, training, and doing your best to remain competitive as an employer, you can give your restaurant a great foundation for creating a stellar staff and a happy work environment.

Tipping: A Thing of the Past or a Continued Tradition

Tipping to express your gratitude for good service from a restaurant’s wait staff has been a long-standing tradition in the United States. So, whenever you receive your bill at a restaurant and you find the gratuity line nowhere to be found, it can be a bit out of the ordinary. But, in some restaurants, this has become the norm.

Some restaurants have taken it upon themselves to ensure their front of house workers and kitchen staff are receiving equitable wages by instituting no-tipping policies and raising their prices by 15-20% instead.  They claim that these higher prices enable them to pay all of their employees a higher wage. Advocates for the no-tipping movement also insist that not giving customers the chance to tip poorly can give the service industry a more professional appearance and shrink the income gap between the wait staff and cooks.

Americans have become accustomed to rewarding wait staff with a tip but in other areas of the world, the service industry is handled differently. For example, many restaurants in France operate service compris, or “service is included”. With this model, prices have absorbed the cost of service. If you receive extraordinary service, leaving an additional 1 to 2 percent tip can be appreciated. In contrast, if you are at a restaurant in Japan, tipping is not a typical part of the culture. Leaving a tip can be seen as rude and will often be refused by the staff.

Originally, tipping came about “to insure promptitude” in the service industry. Mid-19th century Americans began using tips as a show of wealth and knowledge of European gentility rules, and by the 1900’s, tipping was a common practice.

But isn’t that what minimum wage is for? Not exactly. The only employers required to pay tipped employees the full state minimum wage before tips are in Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. The other 43 states require employers to pay tipped employees a minimum cash wage at or above $2.13. In other words, if your wages are set at $2.13, a regular 8-hour shift will earn you $17.04 pre-taxes. Even with their subjective nature, tips can help those in the service industry have a livable wage. For more information on your state’s tipping law, please refer to the standards set by the United States Department of Labor.

No-tipping policies have been a hard change for both customers and servers to get used to. Tipping has become so ingrained in the American dining experience and can keep restaurant prices low. But because tipping is very subjective, it’s easy to see that it may not always be a fair practice. While some customers may over tip their server, others may have a mission to only tip 10 percent anywhere they go, regardless of actual service quality. It’s not easy getting customers to relinquish their control over how much their server is rewarded, especially in a post-recession world. So instead of trying to change a single way of thinking, restauranteurs have the challenge of altering two ideologies.

In late 2015, Joe’s Crab Shack became the first casual-dining chain to try using a no-tipping policy in 18 of its nationwide restaurants. After the first six months of implementation, there were only four that continued to use the policy. To make up for the difference, the restaurant raised wages by increasing menu pricing. As a result, Joe’s Crab Shack saw less customer traffic and a large turnover in staff who couldn’t/wouldn’t conform with the wage change. At least in chain establishments, gratuity-included dining hasn’t quite caught on.

While Joe’s Crab Shack customers didn’t take to the no-tipping policy, there are numerous restaurants in San Francisco, Pittsburgh, New York City, and more that are getting along just fine with the added policy.   Most of them are operated by “celebrity” chefs that have pricing power that the rest of the market doesn’t enjoy.

What’s your view on implementing a no-tipping policy? Tell us in the comments below.