Restaurant News reported that, in 2014, the annual turnover rate for hourly restaurant employees hovered at 94%. By that count, only six out 100 employees stayed loyal to their employer for a year!
This staggering statistic points to a critical issue in the restaurant world: the myth of the disposable employee.
When restaurants don’t recognize the value of each worker as an individual, employee loyalty drops. A high turnover rate leads to poor performance, decreased productivity, low morale, and sky-high onboarding costs for employers.
To nurture employee loyalty, you need to shift the conversation toward the tangible benefits you offer your staff. How do you contribute to the lives of your team members? What makes you stand out as an employer?
These seven tips can help you to answer these questions, fostering long-term loyalty in your restaurant:
1. Train, Teach, and Coach Employees
The most effective managers are always training, teaching, and coaching their employees. Pal’s Sudden Service, a fast-food chain based in Tennessee, exhibits this approach to restaurant management and experiences unmatched loyalty among staff.
According to the Harvard Business Review, Pal’s runs on the idea that “even great people need constant opportunities for improvement.” The CEO Thomas Crosby explains, “ If you want people to succeed, you have to be willing to teach them.”
Managers spend 10% of their time training employees. In its 33 years of operation, the company has only seen seven general managers willingly leave the organization. Pal’s turnover rate for hourly workers is one-third of the industry average.
To channel Pal’s approach to employee management, prioritize professional growth, empowering employees with hands-on training and engaged managers.
2. Promote from Within
Internal promotions incentivize employees to stay at your restaurant rather than pursue opportunities elsewhere. With 90% of restaurant managers starting as hourly employees in the industry, there’s a lot of benefit to investing in high-potential talent.
Develop a clear promotion process that outlines the steps employees need to take to rise in the ranks. By creating attainable benchmarks, you give workers a sense of progress. Researchers associate these “small wins” with renewed motivation and happiness at work, two critical aspects of employee loyalty.
Implementing a promotional process can also lower costs associated with onboarding new employees since team members already know how the ins and outs of your restaurant.
3. Pay High Wages
Labor costs in the hospitality business eat up about 20% of restaurant revenue, making increased employee pay a major challenge for owners.
But boosting hourly rates can have a significant influence on loyalty, retention, productivity — all of which affect your bottom line. In part because of competition for labor, hourly wages grew for restaurant employees faster than in any other industry in 2014.
When Pi Pizzeria in St. Louis raised hourly pay for kitchen staff by 16.5%, they experienced palpable benefits. Employee Kevin Montgomery told the Wall Street Journal that, since the change, “Morale at the restaurant has gone way up…They say money can’t buy happiness, but in this case, it kind of did.” To bolster employee loyalty, ensure that you offer fair pay.
4. Expand Benefits
Even when hourly workers receive above-average pay, they still struggle to cover the costs of health care and to save for their retirement. Bar Marco, a restaurant in Pittsburgh, has taken the high road, offering all employees salaried positions that include health care from the date of hire.
Remarkably, the restaurant’s management has noticed increased profit margins since the change. Co-owner Bobby Fry credits employee cognizance with an boost in profits: “Our water bill was cut in half, our linen bill was cut in half, our liquor inventory was lean.”
Although offering benefits such as healthcare, profit sharing, and retirement plans all require upfront costs, they have the strongest impact on loyalty. A study from MetLife found that employees who are happy with their benefits report the highest rate of loyalty to their employer at 71%.
5. Limit Hours on the Job
Overworked employees quit because it’s their only way to take a break. After some time off, they pick up another gig at a different restaurant and get to back to work, only to start the process all over again.
This transient way of life is a detriment to restaurants and workers alike. In an industry that often asks employees to take on 60-hour weeks without overtime, limiting employees to 40 hours per week and ample vacation time can motivate employees to stay put.
Also, try to accommodate requests for preferred schedules. Unlike many other jobs, working in a kitchen or as a server requires difficult hours — when everyone else is asleep or relaxing with friends, your staff is on their feet. A digital scheduling system and flexible outlook can offset these challenges, ensuring that staff have the bandwidth to recover from long hours on the job.
6. Boost Employee Engagement
Employee engagement is one of the key determiners of staff loyalty and a restaurant’s success as a business. According to Gallup, engaged employees “work with passion and feel a profound connection to their company.” With these three practices, you can increase engagement in your restaurant.
Offer employees recognition.
Saying “thank you” is a small act with big consequences. A sense of appreciation connects employees to a common mission. One study even concluded that businesses with recognition programs report 14% higher employee engagement, productivity, and customer service.
Foster a positive culture and community.
People who report having friends at work are much more likely to stay in their current roles. Create a supportive work environment and encourage positive relationships between staff members. This peer-to-peer loyalty underscores employee engagement and high retention rates.
Make work meaningful.
A lot of restaurant owners focus on perks: family meals, discounted drinks, and big tips. But research shows that meaningful work surpasses even the alluring fringe benefits. To cultivate meaning on the job, managers need to emphasize the individual contributions that make their restaurant a success.
7. Accommodate Individual Needs
Excellent managers identify the priorities of employees early on and cater to their needs. Robert Allen Cobb at the University of Tennessee explains why restaurants should accommodate hourly workers from the get-go:
“Most importantly, during the interview process it is imperative to identify the applicant’s needs. If these needs are not met, it creates a foul work environment, and the individual will be more at risk to quit earlier. The data tend to argue that the more an employer can satisfy the intangible needs of its employees, the higher the employee morale will be, thus leading to longer and more productive tenure rates.”
By adapting to requests, and assisting employees to meet long-term goals, managers can expect unprecedented loyalty among their staff.
Employee loyalty doesn’t only foster commitment to a restaurant, it also contributes to performance and productivity. When employees love where they work, they’re committed to helping it thrive in every way.7 Proven Ways to Boost Employee Loyalty at Your Restaurant Rob Wormley