Let's talk about turnover. The restaurant industry has the dubious honor of having the highest turnover rate of all sectors of business. At 73%, it's at least 1.5 times higher than your average retail shop, grocery store or corporate office. In any industry, turnover costs money. It's about loss of productivity while positions are open and while the new hire is training and getting up to speed. The costs of the hiring process itself, including time spent by managers interviewing candidates, and conducting background and drug testing, also add up. The National Restaurant Association tells us the average restaurant loses $150,000 per year on turnover costs.
Why is turnover so high in the restaurant industry and what can we do about it? The quick answers: A lot of factors come into play to cause restaurant revolving doors, many of which we can't control. But there are other factors that can be improved and changed. Here's a more in-depth look.
Causes of restaurant turnover
The National Restaurant Association tells us that 1.5 million teens work in the restaurant industry. In fact, restaurants employ one-third of all working teens. The numbers are higher when you're looking at the fast food and fast casual segments. So, why does high adolescent employment equal high turnover? It's the nature of the beast. Kids aren't looking for a career; they're looking for spending money. They get a summer job at the local McDonald's and many quit when it's time to go back to school, despite McDonald's legendary training and attention to staff. Kids just are not going to stick around long.
In the summer, customers love to sit on the patio and grab a burger and a cocktail, while in the winter, they're more apt to hunker down at home. Restaurants staff up or down, in both front- and back-of-the-house employees, in response to customer demand or lack thereof. The NRA estimates that, before the busy season descends, restaurant employment surges nationwide by 400,000. Come fall, that number dwindles back down.
Teen employment and seasonality are just part of the nature of the beast that is the foodservice industry. They're not going to change. What restaurants can control is workplace culture and career pathing.
The restaurant industry has, in the past, had a bad rap for harassment and even hazing in some kitchens, but in the wake of the #MeToo movement, the tolerance for that kind of behavior has ended. Creating a workplace culture of inclusion and respect is something every restaurant can do. Across all industries, culture fit (or mis-fit) with one's place of employment is one of the major indicators of employee retention. And making the workplace more fun doesn't hurt either. Bottom line, if people feel respected and like coming to work, they'll keep coming to work. Some quick tactics you can deploy to boost your culture include mentorship programs for new employees, contests around upselling with bonuses or time off as prizes, and staff bonding opportunities.
McDonald's aside, many restaurants don't employ the same kinds of staff development efforts as other industries. Career pathing (showing people there is a clear way up), opportunities for training and upskilling, and other efforts to show employees you care about developing their careers whether they stay with you or not go a long way toward creating employee loyalty.
In the end, doing what you can to reduce turnover in the areas in which you can effect change, like culture and staff development, can lessen the sting of the turnover you can't control.