High Staff Turnover is a Huge Expense
One of the biggest challenges restaurants face is the constant high turnover of staff.
This is a hidden expense that most restaurant owners don’t give much thought to because they feel that it is a natural part of the business. However, high turnover doesn’t have to be. Reducing staff turnover should always be part of a restaurant’s long term strategy.
Let me break down some of the costs. I know that at the 4 star hotel that I worked at, it costs on average $2000 to post a job, interview several people, hire that one person, and to train them to be competent at their job.
Imagine that 10 staff leave your restaurant per year. That would mean that your restaurant is spending an additional $20,000 a year on hiring and training new staff.
Now what if we reduced this turnover by half and only 5 staff left a year, them you would spend $10,000. Seems obvious right?
But most restaurant owners would rather spend $20,000, then to find a way to reduce staff turnover by spending $5,000 a year to reduce staff turnover by a half. This would be an expense of $15,000.
That $5,000 can now be used towards one month’s wage of a good manager at your restaurant.
What do you do to reduce turnover at your restaurant and potentially save yourself tens of thousands of dollars a year?
1) Care About Your Staff on a Personal Level.
It seems like simple advice, but I don’t meet a lot of managers that care about their staff on a personal level, and want them to be better people. Not just better servers. A good restaurant will always want the people they work with to be better people in general.
When I hired people at Starbucks, one of the first things I would ask, “If there was a skill you wanted to improve upon, what would it be?” Some of the answers varied between, “I want to be more assertive” or “I want to learn how the operations of a cafe work.” I listened, and would always do my best to do something small every month to move them forward towards their personal goals, knowing that they would probably leave in a few months.
My staff told me that it was these types of actions that made it hard for them to leave for another job even though they weren’t getting paid very well.
2)Thank Your Staff.
Please,thank your staff consistently if they are doing a good job. The number one reason that people leave their job is not because of stress, it’s because they are under appreciated for all the hard work that they do.
If you take the time to point out who the superstar servers were, or if you have an employee of the month program, or if you write personal thank you cards to your staff, they will stay a lot longer at your restaurant. Happy and appreciated staff stay loyal.
3) Reward Your Staff.
I know that you may not be able to give your staff raises all the time, and that you have to watch your budget, especially as food costs and minimum wages continue to soar, but it’s important that you reward your staff for the hard work that they do.
Have you heard of the Great Little Box Company? How can a company that makes boxes have such a great work culture? Let’s be honest. on the surface level making boxes isn’t as sexy as working in a restaurant or cafe, and yet this company is one of the top 100 employers in Canada. A big part of that is because they reward their staff for the hard work that they do.
The beauty of rewarding your staff is that you don’t need to spend money. One of the best things you can do is to barter with businesses around in your city. Talk to the HR people at hotels and see if you can do an exchange. Offer them gift certificates for their annual staff party in exchange for a complimentary one night stay at their hotel.
Talk to the spa down the block and see if they can do an exchange so that one of your staff can enjoy a day at the spa. But whatever it is you do, reward them for their great work ethic.
4) Get Them to Grow.
One of the main reasons why turnover is so high in the industry is because most staff stop learning at some point. They don’t grow, and soon this leads to boredom, which is why they end up seeking another environment to work in, and the cycle repeats.
Giving your team a feeling of accomplishment is extremely important. This means getting your team to set goals that are meaningful to the team, and ensuring that the results are measurable.
Make it fun for them as if it’s a game. I used to have morning versus evening crew challenges. One of the challenges was to see which shift was able to remember more names of customers in one month. The winners would get treated to dinner by me at Le Crocodile. At end of it, we were able to learn 110 new names of customers by the end of that month.
5) Hire Right the First Time Around.
One of my management rookie mistakes that I made when I was a first time manager was that I hired people that were “good enough” for the position. This was a poor attitude and it attracted staff that were just “good enough” but never outstanding. It’s always best to aim high and think how a person you are hiring will fit in with the restaurant culture as a whole in the upcoming months.
If they’re going to spend 8 hours a day there, they’re going to want to be with people who they can get along with and have a great work ethic. Always be patient when hiring someone, even if it means that your staff will need to work extra hard for one more week. It’s much better than having them suffer for 4 months before an incompetent employee leaves.
Those are five ways to help reduce staff turnover and costs. Every restaurant should ensure that reducing staff turnover, and retaining talent is a priority that should be addressed as soon as possible.