Are You Paying Your Restaurant Managers Enough?

The War for Talent has been an all-consuming conversation for us over the past year of publishing the Daily Rail newsletter and SportsTV Guide. So many of you have reported real difficulties sourcing and retaining good people at every level of your organizations. In fact, we have heard from operators that, no matter what they pay, they can’t seem to find the great people they need to operate their businesses. While we appreciate the hyperbole of that sentiment, we believe that many of you are going about the process incorrectly.

Do you know what the appropriate salary for every position in your restaurant is?

If you don’t, then we suggest you download and review the Restaurant Industry Salary Report created by the folks at The Restaurant Zone. This study gives you average salary for most defined positions in your operation. The metrics are separated by state as well as delivering a national average. This is particularly valuable as you can compare your current offerings to the local average in your market. Sure you will need to account for things like urban vs. ex-urban locations and local competition for talent, but having a bench mark is great place to start.

Looking at the national average for a couple of key positions you can see why our industry is experiencing difficulties recruiting quality people. The average salary for an Assistant Manager is $32,458. Assuming a 50-hour work week and no additional overtime compensation, that works out to just $12.48/hour. That’s less than many servers and bartenders make in tips alone. While we don’t judge anyone’s business decisions, if your assistants make less than the hourlies they manage, then you’re likely to have problems retaining them.

The real challenge here is balancing your bottom line with the importance of having the best people on your staff, especially for line managers.

Here’s a good rule of thumb: If your managers make less than your service staff and work more hours, then you can be confident they will eventually tire of the disparity. While there are ways to mitigate this, in the end, it’s a reality you may have created.

Strategies for managing restaurant manager’s salaries

One strategy is to employ part-time managers. Imagine a structure with one GM and on full-time assistant. Then you can fill the additional management shifts with shift supervisors that you pay an hourly rate. These can be full-time people that work a different position when they aren’t running a shift. This way you can give them a break from serving all the time, build your bench strength and take the money you save and increase the wage you pay your full-time salaried managers.

Salary management is not the only issue you need to address when it comes to attracting and retaining the best management talent. However, it is a significant factor. By taking stock of what the local average is in your market, you can at least ensure you aren’t losing the best talent because you don’t pay enough. Conversely, if you are over-compensating, you can also adjust that to not waste resources where they aren’t needed.

Nothing can substitute for a great work environment, but a low salary can create for a poor working environment. We aren’t suggesting you raise your salaries unilaterally; just that you should be aware of what your competitors for talent are doing so you aren’t caught flat footed.

Remember, this is a War for Talent and you can’t win if you don’t fight.