Preventing restaurant staff turnover is a time-consuming and costly process. That’s why it’s so important to hire employees that are a good fit for your business and put measures in place to ensure they want to stick around for the long haul.
What is the Restaurant Turnover Rate?
Based on data from our 10,000+ customer base, Upserve found the average restaurant turnover rate in 2019 to be 22% across the board. (Keep reading to see how this translates by region and job position.)
However, this number varies widely and drastically based on many other factors. In 2018, the National Restaurant Association calculated the restaurant turnover rate to be 74.9% annually, compared to 48.9% in the private sector. Meanwhile, a report from CNBC puts the annual turnover rate at 130-150% for fast-casual restaurants.
Facts About the Restaurant Turnover Rate
Employee turnover is a constant concern for any small business but in the restaurant industry, it can feel like a revolving door. Both front-of-house and back-of-house staff are key ingredients to delivering memorable hospitality. High restaurant employee turnover creates unwelcome distractions for owners and managers, neverending recruitment, the costs of training and ramping up employees, and a loss of institutional memory held by long-tenured employees.
Upserve’s data team pulled the numbers from our 10,000+ customer database and found some key factors that contribute to the restaurant staff turnover rate, including trends based on pay, positions, and location.
Turnover is Lowest in States with Higher Minimum Wage
This could be due to a number of reasons, but we think that the mandatory $11-12.00 an hour minimum wage for tipped workers in states like California and Washington and a rate of $10.75 in Oregon probably play a big role in why states with higher minimum wage have better restaurant turnover rates.
Only five states in the country do not have a mandatory minimum wage by law and they are all in the south – Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. States in this region that do implement a minimum wage tend to have the lowest in the country – states like Alabama, Georgia, and Kentucky, among others, require paying tipped workers just $2.13 per hour.
Front-of-house Staff is More Likely to Turnover
- Kitchen staff has a restaurant turnover rate of 18% and are less likely to leave, while folks in management roles have a restaurant turnover rate of 28% year-over-year and are more likely to move on.
- Front counter staff restaurant turnover rates were highest in the west – this was also the only category where the west had a noticeably higher restaurant turnover rate than the rest of the country.
- Restaurant turnover for management roles tended to hover around the national average in all regions but is much higher in the northeast.
8 Ways to Reduce Restaurant EmployeeTurnover
Restaurants are particularly affected by employee turnover for a variety of reasons, including a high number of student employees and bigger seasonal changes. Unfortunately, a high restaurant turnover rate can affect the ultimate success of your business. High restaurant turnover leads to management spending valuable time hiring and training staff members, and also a less experienced staff, which can affect quality and customer service.
Rather than accept this as a regular part of doing business, you can keep restaurant turnover rates down with these tips.
1. Consider Future-Proofing With A Higher Wage
Having to increase what you spend in payroll may seem daunting, but based on the restaurant turnover success they’ve seen of higher minimum wages in western states, it seems to be working in their favor. Restaurant turnover isn’t just a headache – it’s a major expense, and as we’re seeing here, high wages equal lower turnover – saving you time and money in the long run.
2. Create a Positive Workplace Culture
The unfortunate truth is that sometimes staff and management disagree. Other times, staff disagrees amongst themselves. When this conflict is not resolved, restaurant employees will turnover to avoid any issues.
Having a strong employee handbook and keeping your finger on the pulse of staff engagement as much as guest engagement will help you nip any conflicts in the bud and retain a harmonious and collaborative work environment.
3. Check-in With Your Employees
To avoid restaurant turnover, check-in regularly with your employees – especially your top performers – and make sure they are happy in their role. They may not feel comfortable coming to you with things that are bothering in the workplace but will be more likely to open up if you make the space for them. Find out what they love and don’t love about their role and try to make adjustments to make sure they are happy and thriving. A happy employee is less likely to churn, saving you the time, money, and headache of finding a replacement.
4. Plan Ahead for Seasonal Restaurant Turnover
Restaurant turnover is – and likely always will be – a major part of this industry. By planning ahead for seasons of high turnover you can get started on the hiring and training processes sooner, helping bridge the time gap between losing a team member and onboarding a new one.
5. Refine Your Hiring Strategy
Restaurant turnover isn’t all about employees leaving on their own accord. The ones you have to let go are part of the mix as well. The tried and true way to minimize the number of terminations you have to administer is to make sure the people you hire are a good fit in the first place.
Danny Meyer’s Union Station Hospitality Group is well-known for its exceptional service and as great places to work within the service industry. This isn’t just luck – Meyer has six “soft skills,” like empathy and work ethic, he and his management teams rely on when interviewing a new hire.
Taking these skills into account, Meyer and another former USHG executive implemented a 49/51 hiring method called the Hospitality Quotient, or HQ. Every person hired in the company should have the technical skills to do their job, the 49%, but their HQ makes up the other 51%. Hiring employees with a high HQ score is what really tips the scales in terms of company culture, and happy staff will always provide a better experience for customers.
6. Try to Source Internally
The employees you already have working for you are a great resource for finding new team members. If they love working for you, they’ll be likely to recommend your restaurant to their friends. Also, camaraderie among your staff is essential, and people want to work with other good people. To ensure a low restaurant turnover rate, think about even instituting an employee referral program to incentivize them to recommend good people.
7. Champion Professional Development
There’s hardly a clearer route to restaurant turnover than overqualified employees stuck in entry-level positions. Not only will they become bored and look for opportunities elsewhere, they’ll likely stop caring about the job while they’re still at it if they feel unappreciated.
Make paths to higher level jobs clear and attainable, but offer professional development at all levels by delivering clear and actionable feedback on job performance. Continue on the job training by keeping your staff informed on everything from the nuances of the newest beer the restaurant is offering to shifting industry trends and pointers on how to increase their tips.
8. Conduct Exit Interviews
When an employee has made a decision to leave, schedule an honest discussion before they leave to discuss their time with your company. Ask specific questions to get honest responses. This will help you see if there are any patterns existing, or any problems that need dealing with to prevent further turnover.
Ultimately, many of the causes of restaurant employee turnover are personal ones—a seasonal workforce, workplace conflicts—and are largely out of managers’ control regardless of the environment they foster. What is in their control, however, is investing in staff and restaurant operations to ensure that employees walking out doesn’t translate into a restaurant closing its doors.