5 Ways to Improve Employee Retention

The Harsh Reality of Employee Turnover

According to The United States Bureau of Labor Statistics, the turnover rate for the restaurant industry was 73% in 2016. Turnover is a major pain point for restaurant owners because it is incredibly costly. The Center for Hospitality Research at Cornell University broke down how much employee turnover actually costs, and they estimate the grand total for one employee is around $5,864. Here is the breakdown of the different components of employee turnover and their respective costs:

  • pre-departure disengagement: $176
  • recruiting to fill the position: $1,173
  • selection for a new hire: $645
  • orientation and training: $821
  • productivity loss for all staff: $3,049

Restaurants can't afford to lose employees when it costs so much to replace them with another employee, it is detrimental to the restaurant's bottom line. Employee turnover is a major contributor to restaurants losing money, and this is why it's so important for them to implement strategies to help retain their employees.

5 Strategies to Improve Employee Retention

  1. Lead Your Employees Instead of Managing Them - employees in this industry are over managed and not led enough. When you micro-manage, it tends to result in lower employee morale and engagement. Employees tend to feel as though they can't be trusted to carry out their tasks when they're micromanaged. There's a major difference between leading your employees and managing them. Leadership involves inspiring your employees and empowering them to accomplish their tasks.
  2. Make the First Day On the Job Memorable- onboarding is a crucial part of retaining your employees. When new employees join the team, provide them with training so that they know how to perform best. When leaders show how passionate they are about their jobs and the restaurant, it gives a good impression for the new employees. Onboarding also helps with employee engagement and productivity, and 69% of employees who have received great initial onboarding are more likely to stay with their employee for 3 years.
  3. Emphasize the Importance of Being a Team- a team-first mentality is important to have among your employees. It builds a sense of camaraderie among the staff members which boost employee morale. When people are focused on lifting each other up and improving together with the end goal of making the team stronger, employee performance increases and so does retention.
  4. Provide Regular Praise - employees really appreciate receiving recognition for their hard work, it shows them that their efforts aren't going unnoticed. According to Gallup, 70% of Americans don't receive praise or recognition at work. A lack of appreciation leads to lower engagement and morale. When employees perform well and go above and beyond to provide the best service possible, acknowledge this with sincere praise. When they receive praise, it releases dopamine in their brains which makes them feel incredibly happy and prideful.
  5. Have a Team-First Mentality - a sense of strong teamwork among employees is important because it fosters strong working relationships. Close-knit relationships can be cultivated from this mentality, and employees can work together to achieve a collective goal. It helps improve employee engagement when employees collaborate with one another.

Restaurant owners can implement these 5 strategies to help them retain their employees. If owners want to have a winning team, they need to make sure that they engage their employees and lead them versus over-manage them. These strategies will help minimize turnover while maximizing employee morale.