In the dynamic world of the restaurant industry, the key ingredients for success go beyond delectable dishes and impeccable service – they require a dedicated and skilled workforce. However, the ongoing labor shortage has made finding and retaining such talent a formidable challenge for restaurant operators.
Insights from Esplanda's Survey
Recently, Esplanda, a leading point-of-sale system for restaurants, conducted a comprehensive survey of 1,011 current restaurant employees between February 27, 2023, and March 19, 2023. The findings shed light on effective tactics to combat employee churn and enhance restaurant employee retention.
Key Findings: Understanding the Landscape
Annual Turnover Rate: The restaurant industry's annual turnover rate, currently at 73.9%, is on track for its lowest since 2017.
Motivations: 46% of restaurant employees are motivated by financial considerations, while 18% seek career development within the industry.
Churn Risk: Alarmingly, 30% of staff are at risk of leaving the industry within the next two years.
Top Pain Points: Employees considering churn cite poor hourly pay (47%), lack of recognition for hard work (44%), and unsatisfactory management (37%) as primary concerns.
Training Impact: The sweet spot for successful staff sentiment lies in two weeks or more of training, yet 74% of restaurant staff receive two weeks or less.
Current State of Staffing Shortage and Turnover
While there are positive signs, such as a turnover rate heading towards its lowest since 2017, challenges persist. The National Restaurant Association reports that, as of January 2024, the annual restaurant industry turnover rate is 79.6% over the past decade. This is an increase from the pre-pandemic average of 71.6%.
Understanding the dynamics is crucial. For those fully staffed, lower turnover can be beneficial. However, for struggling establishments, it means a limited talent pool. The challenges in hiring, retention, and labor cost control are echoed in research from 7Shifts.
Strategies to Reduce Turnover and Overcome Labor Shortage
Recognizing that turnover is inevitable, efforts should focus on two types: employees exiting the industry and those moving to another restaurant. Data suggests 30% plan to leave the industry within two years.
For those intending to stay, bad managers contribute significantly to churn. A staggering 45% of employees who left for another restaurant did so due to managerial issues. In comparison, inadequate pay accounted for 42% of departures.
Prioritizing Managerial Excellence
Given the substantial impact of managers on employee satisfaction and retention, hiring and retaining skilled managers is crucial. A solid manager can create a tolerable working environment, influencing staff members to stay longer.
Addressing pay concerns in an era of rising costs requires competitive wages. Minimum wage hikes across various states also influence wage discussions.
In conclusion, thriving in the current restaurant labor market requires a multifaceted approach. From addressing turnover with strategic hiring practices to prioritizing managerial excellence and competitive wages, operators can enhance employee retention and weather the challenges posed by the ongoing labor shortage.
