One of the biggest challenges in the restaurant industry is employee retention. It’s something we’re hearing a lot about now during the current labor shortage. However, even during times of economic growth and prosperity, retaining employees is a big concern for restaurant owners.
Consider these numbers from the Bureau of Labor Statistics.
The annual separation (turnover) rate for accommodation and food services employees was 86.3 percent in 2021. However, even back in 2017, it was 72.4 percent. This demonstrates that turnover is a historic and ongoing problem in the restaurant industry.
One of the reasons for such high turnover could be because of the large number of teenagers and students who work at restaurants. Also, many restaurant jobs are seasonal, so turnover is part of the model. Regardless of the reason for turnover, these statistics demonstrate that retaining employees should be a top priority for restaurant owners.
In this article, we want to help you with 9 employee retention strategies to try in your restaurant or pizzeria. It’s part of our series about filling your restaurant with the best workers, so if you also need tips on attracting workers or hiring workers, check out the linked articles.
9 Employee Retention Strategies for Restaurants
Despite the high turnover rates in the restaurant industry, retaining employees in YOUR restaurant is, to a large extent, under your control. Here are some strategies that work to keep employees.
1. Start with Strong Onboarding
If you care about employee retention, you have to start on day one. A strong onboarding plan gives new workers a warm welcome and equips them with the knowledge they need to do their job effectively. This includes job-related skills and also the company culture and values. Training new employees in what they need to do, how to do it, and why will give them a solid foundation on which they can grow. For example, you can use call recordings to teach new employees best practices about taking orders over the phone or dealing with angry customers. It’s much easier to retain employees when they feel confident about their job and empowered to do the work.
2. Encourage Mentorship
In fact, don’t just encourage it; set it up and implement it! You can create mentors for all the different roles in your restaurant, and when a new hire comes in, give them time to talk with and shadow their mentor. Mentors are effective because new employees will often feel more comfortable asking questions and speaking with a peer as they learn the ropes.
3. Keep a Close Eye on Company Culture
According to one report, 62 percent of workers have experienced disrespect or emotional abuse from customers, and 49 percent have experienced emotional abuse from managers. It’s up to you to keep a close eye on what is happening in your restaurant, including responding to incidents like these and actively creating a positive company culture where employees want to come to work each day.
4. Survey Your Workers
Here’s an interesting idea: your current workers may hold the secret to better employee retention in your restaurant or pizzeria. You can unlock that insight by surveying them to understand job satisfaction and get their ideas on how you can improve. Simple changes may mean big improvements in happiness, and how do you know unless you ask? In addition to surveying current employees, also have a plan for conducting exit interviews to find out why employees are leaving so you can fix the problems.
5. Let Go of Toxic Employees
We’re talking about employee retention, yet telling you to let go of employees? While that sounds contradictory, we must remember that employee retention is just as much about removing bad employees as it is about keeping the good ones. Toxic employees can erode your company culture and may cause good employees to leave. If you have followed our tips regarding keeping a close eye on company culture and surveying your staff, you should be able to identify toxic employees before they do too much damage.
6. Improve Tips
Many restaurant and pizzeria staff count on tips as part of their pay, and we know that wages are a big factor when choosing a job. Although tipping may feel like it is out of your control (after all, it’s the customer who decides what to tip!), there are many things you can do. For example, technology can help, so make sure to allow credit card tipping and add a ‘suggested tip’ on your receipt or digital kiosk. You can also improve wait times and find ways to deliver better service and customer experience. There is very interesting research on the effect of things like offering mints at the end of the meal, wearing unique items with the uniform, repeating the order, and how a person introduces themselves. Check out this article for more details.
7. Reward Loyalty with Raises
Of course, when it comes to wages, you have direct control over how much you pay employees. Thus, one way to improve employee retention is to reward loyalty with pay that increases over time. While you can also give raises to reward great work, make sure to have a plan (and make it known to new hires!) for increasing pay based on certain milestones (such as 6 months or 1 year of working).
8. Employee Recognition
Recognition can go a long way in retaining employees. Everyone wants to be recognized for a job well done and to feel like they are a valuable part of the team. While you can create a formal program (and we’ll discuss that next!), you can also prioritize recognizing employees for good work (and training managers to do this as well). Recognition can be private (pulling them aside or giving them a handwritten note) or public (a shout-out on social media or a mention in your newsletter).
9. Employee Incentive Programs
Employee incentive programs include contests and challenges where employees compete for prizes, either individually or as a team. You can design the program around your unique goals. For example, maybe you want to sell more gift cards, promote a new product on the menu, or increase sign-ups for your loyalty program. A well-crafted incentive program is a win-win because it helps you reach your goals and increases employee engagement. This article will help you plan your program and give you creative ideas (like server bingo/poker, the positive review contest, and the “caught doing good” game).
Retaining Employees Is Up to You
With the current labor shortage, the difficulty finding new workers, and the historically high turnover rate in the restaurant industry, sometimes it may feel like employee retention is out of your control. However, this list shows several things you can do as a restaurant owner to retain employees and keep your best workers happy.
Retaining employees is in your best interest because it reduces costs, improves culture, and gives employees and customers alike a better experience at your restaurant. Try out some of these strategies today, and make sure to measure your progress and adjust as you go.
This article concludes our series on the labor shortage in the restaurant industry! Here’s a full list if you missed any installments along the way.
