How Can the Restaurant Industry Reduce Employee Turnover?

September 2, 20168:19 am1070 views

As the restaurant industry struggles with record employee turnover, a small but growing minority of restaurants are reaping measurable benefits by offering employees educational opportunities, according to a new study from Penn Foster Inc., a for-purpose organization providing skills development training and credentials for today’s frontline workforce.

These benefits have positive long-term effects on both restaurants and employees, lowering costs of hiring, training and retaining employees and providing workers with greater earning potential.

The report, Restaurant Industry Report: Strategies for Reducing Turnover, researched and written by Penn Foster, confirms that restaurants, and in particular fast casual and casual dining chains, continue to struggle with finding and retaining talent-an issue that increases overall costs of operating restaurants, figuring into the current “battle for talent,” which incorporates hiring, training and retaining workers.

According to research from Nation’s Restaurant News, employee turnover reached a staggering 110% in Q4 2015, and more than 45% of quick service and casual dining restaurants said it costs between $500 and $2,500 to replace an employee when one leaves.

“The restaurant industry is a harbinger of many other types of industries in this country, and we’re excited that a number of restaurant chains, including Chipotle, Church’s Chicken and Starbucks, are leading the charge around employee education, development and retention,” said John Shrader, General Manager and Executive Vice President, Penn Foster.

“These forward-thinking restaurants are innovating in what we think is a huge opportunity to benefit their employees and themselves.”

The report also demonstrates a direct correlation between education and hourly employee turnover: hourly employees with the lowest educational attainment stay in their restaurant jobs the least amount of time.

See: Hospitality Industry Faces New Threats

Employees cite low compensation as the primary reason they leave their hourly positions, and almost half of employers said their restaurant requires hourly workers to have a high school diploma or GED in order to be considered for promotions. This catch-22 situation means lower-paid hourly workers will continue to cycle through the industry unless disruption occurs.

Fortunately, the restaurant industry is starting to lead this much-needed disruption: the study found restaurants are increasingly discovering that educational opportunities, personal development programs, and providing clear career paths are the key to retaining employees and decreasing overall operational costs.

Beyond the report, talent and organizational development expert Allessandria Polizzi recommends restaurants should consider three primary approaches to keeping employees engaged and committed to their jobs:

  • Provide access to educational programs: According to the study, there are fewer turnovers at restaurants with more educated employees. Starbucks and McDonald’s are taking the lead on providing this benefit to their teams.
  • Offer personal development courses: Most restaurants focus on the “hard skills” needed to perform specific job-related duties, but savvy employers see the long-term value in developing employees’ “soft skills” or “power skills.” These skills include communication and conflict resolution, which will make employees more effective in their current roles and better prepared for upward movement into management.
  • Create a career path for employees: The second most-cited reason why hourly restaurant employees leave their jobs is “limited career advancement opportunities.” By providing solid steps for motivated employees to continue to advance within their workplace, restaurants can retain workers longer and save money on hiring and training employees who are candidates for management.

Also read: AccorHotels Answers: Challenges to Women Leadership in the Hospitality Industry in APAC

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