One of the biggest problems restaurants run into today – turnover. Forget the idea that Millennials are killing the restaurant industry, turnover is an absolute killer for restaurants.
Look at it this way. It costs $6,000 to recruit, hire and train a new staff member, and the average turnover rate at your typical restaurant is 100%. That means the average 25 staff restaurant costs restaurant operators $146,000, annually, because of turnover.
However, just a 25% annual turnover reduction saves $36,600. So it’s easy to see why restaurant owners and operators should want to reign in their staff turnover.
Easier said than done, of course. Here are some tips for lowering staff turnover at your restaurant.
Pay Your Staff Competitively
Insufficient pay is usually one of the biggest reasons why restaurant staff leave, especially for restaurants operating in high-cost living areas like San Francisco, New York and Boston. Many restaurants aren’t just paying their staff enough to live on.
Take San Fran, for example. California is moving to a $15/hr minimum wage, which comes out to $2,400 (pre-tax) if they’re working full-time. The average price for a studio apartment in the area is $2,120/month, according to RealFacts, leaving not a ton of cash for things like utilities, food, and other bills.
Tipping will help wait staff, but that still leaves your back of house staff in the lurks.
Restaurants in more reasonable-costing locations will have an easier time, of course, but insufficient or non-competitive pay are a big reason why restaurants lose staff.
Same goes for your management team. The average salary for an Assistant Manager is $32,458. When you take into account that they usually average 50 hours per week and no overtime pay, they’re making just $12.48/hr. That’s less than your servers and bartenders make on tips per hour, but with a lot of added stress.
Balancing staff compensation with your bottom line is never easy, and your business decisions are yours alone, but paying staff more might actually save you cash. Regardless, it’s good to keep up on the restaurant industry’s latest salary reports to see how you compare with your competitors.
Showing that you care about your staff’s career path and development is a great way of investing in your staff.
One way of doing this is with continued training and cross-training staff. Not only does cross-training create for a more engaged staff, but you’ll develop them as leaders who’ll want to stick around.
You can also send your staff to get certified in areas of their interest that will also benefit your business. Anything from traditional restaurant certs like ServSafe and sommelier/cicerone to non-industry specific training like Hootsuite and Google Adwords certification show that you want your staff to be the best they can be. As you level up your team, your restaurant will reap the benefits, too.
You can also post restaurant industry-related news and best practices tips from your favorite sites on the message board to keep your team informed on what’s happening around the industry.
Recognize Great Performance
Everyone wants their hard work and dedication to be appreciated – including your staff. Recognizing their performance is a great way of doing that. But it needs to go beyond the usual.
“I think recognizing great performance is more than just a thank you at the end of a shift,” said Andrew Jaffee, founder of The Rail Media and SportsTV Guide, during the Real Cost of Turnover webinar. “I required my managers to make note of at least one positive thing a staff person did. Every day [they’d] write in the log book something outstanding that a staff person did.”
Andrew would then go through the log and choose one or two excellent anecdotes to highlight with the staff. “I made a big deal about [the good things staff did],” he said. “[Operators] aren’t serving the guests so they need to serve their staff.”
It can be done in front of your entire team or privately on a handwritten note.
Treat Your Staff Like Family (The Kind You Like)
It costs you nothing to show your staff how much you appreciate them. But it can go a long way on relieving tensions and making your team feel welcomed.
It starts off with doing simple things like remembering your staff’s birthdays and giving them personal gifts (even a simple candy bar is nice).
Other ways you can show appreciation:
You can also take some tips from the Gamba family and their restaurant Gamba’s Ristorante. They say the key to their success has been treating staff like family. Growing up, their daughters called the manager “Uncle Joe.”
For Raumundo Garcia, operator of El Taco Real, the key has been to be less capitalistic with staff.
"Capitalism is a great economic engine model for making money, but that's all it does," he said. "It doesn't take into consideration anything else. What I've learned over the years is that my staff is an asset. It's part of what I have to make money with. I have to take care of it. I have to make sure it is happy. I have to make sure its needs are being met. It's like a piece of machinery, but it's a human being.
"The bottom line is you have to respect your staff. And care for them as if they were your family. That's really the secret."
What are you doing to keep staff turnover down? Let us know!