Have you ever heard the cliche saying, “What gets measured gets done”?
As cliche as it is, it stands true. Especially in the restaurant business! If you aren’t tracking results, metrics, and KPIs, then how can you track the success of your business? And if you’re not measuring them against the average, how do you know where you stand?
At a quick service restaurant, the average cost of replacing a line worker costs about $1,700. And as you can imagine, it gets even higher when you’re talking team leaders or a general manager!
Comparing Turnover Rates
If you want to compute your turnover rate for the year, take the total number of employees that leave divided by your average number of employees and multiply it by a hundred. There are more complex ways to do it, but that’s the most basic way to do it.
Retention rates for a general manager in the restaurant industry is about 25%.
The ideal retention rate for regular employees is about 108%.
Do these numbers surprise you? Of course, this is an average; some restaurants are struggling to keep anyone on the payroll whereas others boast extraordinary numbers. Panera, for example, is seeing an impressive 130% retention. Ultimately, the rates are going to depend on the restaurant, the position, the type of service they provide, and many other factors.
In the end, it may not be overly important to compare your turnover rates to other restaurants, other than to get a quick snapshot of where you stand. And of course, even if your rates are better than the average doesn’t mean that you can stop and rest on your laurels.
Understanding Why People Leave
What we recommend to understand your turnover rate is to understand why people leave. Break it down by percentage. You’re always going to have people leave because their family moved, they’re back in school, or other seasonal things.
However, maybe you have a trend of people leaving because of inadequate compensation, a problem with the assistant manager, or store policies, then you have meaningful data. If you’re able to break it down and say to yourself, “74% of turnover last year was because people didn’t like the assistant manager, then I need to resolve that ASAP.”
Lowering your turnover rate during the first 90 days is absolutely critical to long-term employee retention. Studies show that about 30% of employees leave their restaurant jobs during the first 90 days. However, if you can keep them past that point then you’re more than likely going to retain them for at least a year.
Are you struggling with employee turnover? You're not alone! That's why we put together a FREE resource just for you, 6 Ways to Decrease Employee Turnover at Your Restaurant! Check it out!