It’s no secret that the food service industry has a high turnover rate. In fact, The food service industry’s quit rate increased from 6.5% to nearly 7.4% in one year, according to the Bureau of Labor Statistics September 2021-August 2022 data release.
But why do employees leave? How can you tell what your restaurant’s turnover rate is? What can you do to reduce your restaurant’s turnover rate? Read on to find out!
Restaurant Turnover Rate
Restaurant turnover rate measures the percentage of employees that have left an establishment within a given time frame. This metric can help identify areas where staff retention may need improvement or assess how well an organization provides its employees with job satisfaction and opportunities for advancement.
It is important to note that restaurant turnover rates differ from industry to industry; for example, fast food restaurants typically experience higher turnover rates than fine dining venues. Additionally, seasonal trends may also influence this metric. During peak times such as summer holidays, restaurateurs may need to hire new staff more often due to large numbers of patrons.
By monitoring their restaurant turnover rate over time, business owners can gain valuable insight into their recruitment and employee engagement strategies. This can enable them to make more informed decisions about retaining their staff and improving their overall operations.
How to Calculate your Restaurant Turnover Rate
The turnover rate of a restaurant is one of the most important metrics to track to accurately assess your business’s health and performance. Understanding how to calculate your restaurant turnover rate is essential, as it can give you valuable insight into employee engagement, satisfaction, and retention.
To calculate your restaurant turnover rate, you first need to know the following:
- How many employees have left over a given period (e.g., one year)
- Determine the average number of employees at full staff during that same period
Divide the number of employees who have left by the average number of employees at full staff and multiply this figure by 100. This will give you your restaurant turnover rate as a percentage
Number of employees who have left / Average number of employees at full staff x 100 = Turnover Rate
For example, if 10 employees left over the course of one year and your full staff was usually made up of 15 people, then your restaurant turnover rate would be 66.7% (10/15 x 100 = 66.7%).
It’s important to keep track of your restaurant turnover rate so that you can identify areas for improvement. If you notice that employee turnover is increasing, it may be a sign of issues with employee engagement or retention. Investigating these issues can help you create better working conditions and ensure that your team is motivated and committed to their work. With a lower turnover rate, you’ll have fewer training costs and improved restaurant customer service since there will be less disruption in staffing.
Monitoring changes in your restaurant’s turnover rate over time can also be useful for identifying trends in customer satisfaction or employee engagement. If there is an increase in turnover right after implementing a new initiative or policy, this may indicate that it isn’t effective. Additionally, decreasing turnover could mean that a particular strategy is working well and should be continued. Knowing how to calculate your restaurant turnover rate can give you the insight you need to make informed decisions about your business and keep it running smoothly.
Ways to Reduce Your Restaurant Turnover Rate
Restaurant turnover rate can be a major burden on your business. High turnover leads to higher training costs, reduced efficiency, and lower employee morale. Fortunately, there are several steps that you can take to reduce the turnover rate in your restaurant.
Here are some of them:
1. Improve Your Hiring Strategy
A key factor in reducing the turnover rate at your restaurant is having a well-thought-out and effective hiring strategy. This means taking the time to carefully recruit and interview the right candidates for each role rather than trying to fill positions quickly without due diligence.
When interviewing potential employees, ask questions that will give you an idea of their character, commitment level, and the likelihood of staying with the company long-term. Additionally, ensure you set clear expectations from day one regarding job roles and responsibilities so both parties know what they should expect from one another.
2. Recognize Top Employees
Acknowledging the hard work of your staff can go a long way in keeping them motivated and feeling valued. This could be done through special privileges or rewards for workers who demonstrate exceptional performance or reach certain goals.
Celebrating successes and achievements gives employees a sense of accomplishment and encourages them to continue performing well. For example, offering an employee of the month award with a bonus or reward tied to it or simply recognizing their hard work publicly can be meaningful recognition that keeps them engaged in their job. Additionally, providing recognition for a job well done effectively motivates staff members to stay with the company.
3. Understand Seasonal Turnover
Seasonality is an important factor to consider when examining turnover rates. For example, many restaurants experience higher turnover in the summer as student interns, and seasonal staff comes and goes.
By understanding the seasonal turnover’s peaks and valleys, you can more accurately predict trends and plan for those periods accordingly. This could mean offering flexible hours or additional compensation during the peak season to help retain employees.
On the flip side, budgeting for increased headcount or training costs in advance can also be beneficial if you expect a surge in hiring needs around certain times of the year.
4. Analyze Management
Take a close look at the management staff within your restaurant. Poor restaurant managers are often a primary contributing factor to high turnover rates, as employees can quickly become disillusioned with their roles and responsibilities if they feel they are not adequately supported.
Ensure managers respect employees, foster collaboration, provide clear direction, and demonstrate sound decision-making skills. Consider regular training sessions or workshops to help build better leadership skills among your management team.
Additionally, conduct employee surveys to gauge morale and feedback on the management style employed at your establishment. Taking note of any identified improvement areas can make all the difference in creating an optimal work environment.
5. Review Your Employee’s Work Schedule
Ensure that your employees are not overworked and are getting the breaks they need. Employees should be given fair treatment in terms of scheduling, pay, and hours. If you have employees who work irregular shifts or commute a great distance to come to work, be conscious of their unique needs.
A well-thought-out employee schedule allows them time for rest while leaving enough time slots open for customers. This helps create an environment where employees feel valued and respected, leading to higher job satisfaction rates and reduced turnover.
Additionally, it can help reduce potential burnout from too many hours worked in one week. Offering flexible scheduling options can also be beneficial as it gives team members more control over when they work and can foster a better work-life balance.
6. Offer Development Opportunities
Giving employees the opportunity to develop and grow their skills is an essential factor in retaining top talent. The restaurant industry can be a great launching pad for many careers, but if you don’t offer employees development opportunities, they may feel stagnant or unappreciated.
Consider offering professional development classes, certifications, or even tuition reimbursement to show your staff that you value their growth and are invested in them. This could include basic customer service training, specific TCS food/food safety courses, or leadership programs.
Investing in your team will help make them feel more fulfilled and may even lead to better job performance, leading to higher overall satisfaction with their role. Not only will this reduce the turnover rate, but it will also benefit the quality of your workforce.
7. Check in With Your Employees Regularly
It is important to check in with your employees regularly, not only to gauge satisfaction with their job but also to provide feedback and guidance. Regular check-ins should include an open dialogue about the employee’s experience working at the restaurant, successes or challenges they face, opportunities for growth, and suggestions for improvement. This can help them feel supported and understood, leading to increased engagement and loyalty.
8. Offer Competitive/ Higher Wage
One way to keep your employees happy and reduce turnover is to offer higher wages than the competition or similar restaurants in your area. This will not only help attract more qualified job candidates but also help you retain current staff who may be tempted to leave if they find another position with better pay. To determine this, you should research what other restaurants offer for similar positions and ensure that your offers are competitive or even higher.
9. Revamp Your Onboarding Process
Onboarding is an essential part of your restaurant’s success. New employees will struggle to learn the ropes without proper onboarding and may quickly become overwhelmed or dissatisfied. Therefore, ensuring that your onboarding process is thorough, engaging, and clear is important.
Consider revamping your existing process if needed by including detailed job descriptions, a comprehensive training program, and an introduction to company culture. Additionally, explain expectations clearly so new hires know what they are expected to do immediately.
10. Improve Your Technology
Restaurant technology plays a vital role in helping reduce your restaurant’s turnover rate. Having outdated or difficult technology can be a serious barrier for employees and cause them to feel frustrated or overwhelmed. Investing in modern, user-friendly tools can significantly improve employee satisfaction and productivity. This could include investing in a new restaurant POS system or streamlining the customer ordering process with mobile apps. Additionally, providing training on the different software and hardware platforms used at your restaurant can help ensure that staff members have the confidence they need to use these tools effectively. Doing so will help create a workplace environment that is both efficient and enjoyable for everyone involved.
11. Conduct Exit Interviews
Conducting exit interviews is an effective way to understand why employees leave. It can provide invaluable insight into the causes of turnover, such as job dissatisfaction, lack of career growth opportunities, or inadequate training.
Exit interviews should be conducted with all departing employees to help identify possible solutions to reduce turnover in the future. Additionally, it’s important to note that former employees may be more willing to provide honest feedback during an exit interview than they would while still employed.
As such, employers should take advantage of this opportunity by asking specific questions about their experiences in the workplace and offering tangible solutions based on the answers received. Doing so will help ensure that any underlying issues are addressed properly before contributing to further turnover rates.
Frequently Asked Questions About Restaurant Turnover Rate
Restaurant turnover rates are a hot topic in the industry. Restaurants are constantly looking for ways to reduce their turnover rates, which can be costly and damaging to the business. Several factors contribute to the turnover rate, and it can take time to determine which ones have the most impact. In this FAQ section, we will explore some of the most common questions about restaurant turnover rates.
Is High Turnover a Good Thing?
No, high turnover is usually not beneficial for an organization. A high turnover rate can cause disruptions in productivity, increase costs associated with recruitment and training new employees, lead to decreased customer satisfaction if key people leave, and create a negative culture within the workplace.
Furthermore, high employee turnover can signal that something is wrong within the organization’s management structure or environment, which could have long-term implications on morale and overall performance.
What Are the Top 7 Reasons for Turnover?
The top seven reasons for turnover are a combination of personal, organizational, and economic factors, such as:
- Lack of career advancement opportunities
- Poor relationship with managers
- Unsatisfactory compensation packages
- Unclear job expectations
- Insufficient benefits packages
- Work-life balance issues
- Poor corporate culture
By understanding why people leave jobs and taking action to address those reasons, companies can create an environment that is more conducive to retaining high-quality talent. Doing so will help them increase overall productivity and stay ahead of the competition.
What Factors Affect Turnover Rate?
The turnover rate of any organization can be affected by several factors, including:
- employee morale
- job satisfaction
- compensation and benefits
- workplace culture
- management style
- other environmental conditions in the workplace
How Much Turnover Is Too Much?
When it comes to turnover in a restaurant, it can be difficult to determine what’s too much. A certain level of turnover is expected as people move on to other opportunities or circumstances change. However, if the turnover rate is too high, it could lead to decreased quality, staff burnout, and a lower overall customer experience.
When evaluating turnover, restaurant managers should consider the reasons why staff members are leaving. Are they moving on to other opportunities, or is something going wrong in the workplace? If people leave due to a toxic work environment, low pay, or lack of recognition and appreciation, then the problems need to be addressed before they lead to more turnover.
What Is Considered a Good Turnover Rate?
A good turnover rate is typically considered to be 10%. That means that for every 100 employees you have, 10 of them will leave, and new ones will come in. Having a higher turnover rate can indicate instability within the organization, while having a lower turnover rate may mean that your company is doing well at retaining its staff.
It’s important to track your turnover rate over time and use it as a benchmark for improving the employee experience. By understanding what causes employee turnover, you can take steps to reduce it and ensure that you maintain a healthy workforce.