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Limiting Your Turnover: Happy Employees are Worth More

Any restaurant owner knows that a high turnover rate is expensive. From the costs of hiring and training new employees to funneling resources away from your operations in a still-lagging economy, the time and money required to counteract turnover rates is staggering. And there is no guarantee that the investment of hiring and training new employees will pay off, as annual turnover statistics demonstrate.
Restaurants need to look ahead and determine how best to attract top talent, and to keep them, whether the restaurant is quick-serve or fine dining. Thinking of your crew as expendable will effectively create an expendable staff, which is counterproductive to your competitive advantage. But happy employees are loyal employees. And there are more ways than one to produce happier employees.


Raising wages is the most basic attempt at developing employee loyalty, but there are several other, more important avenues. Creating employee incentive programs and professionalizing the industry so employees have upward mobility available to them within your organization are truly what generates a happier, more dedicated and reliable workforce.

To effectively compete in the restaurant labor market, providing prospective and entry-level employees with a clear path to advancement is a vital factor.  While a competitive wage will attract an applicant, the primary vehicle to retain these people is giving them the opportunity for long-term employment, stability, and career development.

For example, McDonald’s, the quick-serve industry’s largest employer, was notoriously known as a low-paying, dead-end job. But McDonald’s has aggressively sought to subvert this stigma through both marketing and offering its employees opportunities for growth. Now, 75 percent of its current store managers and half its franchisees started as store workers. Talk about loyalty!

In addition, several other large brands, including Chipotle and Panera, widely recognized as being leaders when it comes to maintaining a significantly low turnover rate, have this very thing in common: a culture that encourages employees to see themselves beginning a career, not merely a job. By providing training programs, career-path development, and a hip atmosphere, top talent is developing intense loyalty in the restaurant industry.


Another key factor in retaining employees and keeping them happy is creating incentive programs. Try using mystery shoppers, customer comments, attendance records, managers, and shift supervisors to collect information, and then use that information to construct weekly, monthly, and quarterly rewards programs. By structuring your incentive programs on small, recurring time increments, employee commitment and enthusiasm never lags. The amount spent on incentive programs must be gauged against your total payroll, restaurant budget, and overall profitability, but these incentive programs can pay off in spades. While bonuses and gift cards are still very popular forms of compensation, non-monetary incentives can also be strong motivators. Extra breaks, free meals, and choice of shift and priority scheduling are especially effective means of motivating team members. Your particular culture can help determine what is valuable in the eyes of your employees. Many restaurants have found that these kinds of incentive programs address more than just turnover issues, but can also positively affect customer service levels, attendance problems, personal issues, and productivity and performance.

Staffing your restaurant and keeping it staffed is one of the industry’s most difficult and time-consuming tasks, and a high turnover rate hits your bottom line in more ways than one. But investing in your employees’ happiness and job satisfaction can counteract that revolving door, leading to a long-term, mutually-beneficial relationship.

by:Eveleena Fults

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