July 24, 2023
Lauren Platero

5 Employee Retention Strategies In the Restaurant Industry

A high and steady employee retention rate is the result of a positive culture and staff optimization. In order to employ a team that can maximize profits and keep overhead expenses at a bare minimum, many techniques are necessary. From flexible scheduling to team recognition, there's a lot that can impact retention rates. 

In this article, we’re going to discuss employee engagement and retention strategies specific to the restaurant industry. But first, we’ll discuss everything you need to know about the topic. Read on!

Employee Retention Definition 

Employee retention refers to a company's ability to hold onto the people it employs. In other words, this metric keeps track of how slowly or quickly people stay and resign. 

Retention rates are a critical metric in measuring a business' success. For one, the labor cost can be very high to begin with. However, it costs companies a lot of money to hire new recruits. So, it's essential to retain the labor force you currently have.

How to Calculate Employee Retention

Knowing how to calculate the employee retention rate is necessary for any business owner with a team. This statistic will tell you a great deal about the performance and culture of a company. Thankfully, it’s a pretty straightforward metric to determine. 

Begin by dividing the total number of employees who stayed with your company during a set period by the headcount you started with on day one. Then, multiply that number by 100 to get your employee retention rate. The formula should look like this:

Employee Retention Rate = Total Employees During a Timeframe / Original Headcount x 100

Factors That Cause Employee Retention to Drop 

There are numerous factors that can hinder a business’ employee retention. If upper-level management neglects these factors, it can cause employees to resign. In turn, this can raise expenses. Unfortunately, this can eventually occur with your most loyal and talented team members. 

Keep an eye out for the issues below. But more importantly, come up with solutions as soon as the following problems arise:

  • Poor management from upper-level employees.
  • A lack of recognition and appreciation from managers. 
  • A lack of leadership qualities across the team.
  • Few or zero career growth opportunities
  • A lack of staff development resources.
  • Inadequate or below average salaries.
  • An imbalance between work and life.
  • Starting with inadequate training and onboarding processes.
  • A lack of communication across departments. 
  • Mundane work activities and responsibilities. 
  • Inflexible working conditions, especially with shifts. 
  • An unorganized working environment. 
  • A lack of conflict resolutions when issues arise. 

Learning how to manage these situations is vital to long-term employee retention. Plus, workforce management tactics nurture a more engaging culture. As your employees get accustomed to an improved workplace, employee turnover should decrease. Now, let's jump into helpful strategies specific to the restaurant space.

5 Strategies for Employee Retention In Restaurants 

Want to learn more about retaining employees within your food service business? These tips will help maintain your employee roster, reduce the cost of labor, and raise the restaurant profit margin. Read on for all the details:

1. Invest In Labor Saving Devices 

There are numerous digital solutions on the market that help employees better perform at work. They provide the staff the ability to put tasks like taking orders and managing inventory control. In turn, digital labor solutions can reduce manual labor, which is ideal for stress levels and productivity.

2. Cross Train Your Staff 

In the event that coworkers are absent, it might be the responsibility of someone else to cover their shift. Though it might seem counterintuitive to cross-train employees in order to retain them, it can help reduce work overload. Instead, employees will be efficient, regardless of what they’re tending to during their shift.

3. Flexible Scheduling 

Use restaurant HR software to schedule employee shifts accordingly. Similar to the reasons why you should cross-train, this will keep restaurant operations moving smoothly. Let’s face it, there is no need to schedule the entire wait staff to work when shifts are slow. Plus, going this route will save you a lot of money.

4. Create Opportunities for Advancement 

Many people resign from their jobs due to the inability to grow in their current position. With this said, create a hierarchy within your business so that current employees can level up. Your best bet will be to have a variety of managerial roles, as these are positions most workers strive for.

5. Employee Recognition and Rewards 

Always recognize stellar performance. When employees feel appreciated, they’re more likely to remain loyal. In fact, it’s the contrary that will cause team members to find employment elsewhere. So, it's vital to have a system in place to reward employees for moving the needle, achieving milestones, and more. 

Perks of Sustaining High Employee Retention Rates

Once you find ways to establish high employee retention rates, your business will reap many benefits. Below, you’ll find various perks of maintaining a stable team:

  • You'll always have a team when there's a labor shortage
  • There will be fewer hiring and training expenses. 
  • Lower absenteeism comes with high retention rates.
  • Better customer service, since everyone knows the brand. 
  • Improved teamwork due to solid relationships. 
  • A team of engaged and dedicated individuals. 
  • A major increase in productivity and efficiency. 
  • Knowledge retention and professional development 

As you can see, there are so many benefits of retaining employees. The best part? The longer you retain your team, the better the environment gets. 

Frequently Asked Questions About Employee Retention

High employee retention rates should be one of your top business goals. Need to learn more about it? Check out the FAQ section below for additional details:

What Is Employee Retention?

Employee retention is the rate at which employees stay with the same company. The higher the employee retention rate, the better.

Why Is Employee Retention Important?

Employee retention is important since it’s a sign that the business is productive and boasts a positive environment. If the environment is nice to be in and the benefits are great, people won't rush to leave. Typically, these are traits of a profitable business on the right track. Plus, the evolving talent of your employee roster is a sure way to improve operations over time.

What Is An Employee Retention Strategy?

An employee retention strategy is a game plan that aims to keep employees for a long period of time. So, this could look something like adding favorable benefits to their employment package. Or, it could involve adding extra training lessons to their calendars.

Why Is Employee Retention An Issue?

Employee retention is an issue since it’s difficult and expensive to recruit new employees. Depending on the company’s line of business, it can also be hard to replace people with the same level of talent, or better. Overall, it’s essential for saving money and keeping up with the competition. In fact, low employee retention rates can cause a downfall. 

What Are the Top Factors for Employee Retention?

The top six factors for employee retention are:

  1. People and culture 
  2. Work acknowledgement
  3. Meaningful benefits 
  4. Ongoing training 
  5. Workplace environment 
  6. Mission and values alignment
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Employee Retention Begins With a Happy Team

Strive to establish a proactive culture, a selection of competitive benefits, and a team of diverse roles. Then, a high retention rate should follow suit. As the business continues to evolve, you’ll begin to notice that a stable team keeps operations moving along smoothly.