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Why Employee Turnover is the Restaurant Industry’s Labor Crisis

Everyone in the restaurant industry is dealing with high employee turnover rates. Some may be facing this problem more than others, but no matter who you ask among restaurateurs, this is always at the top of the list.

So how bad is this problem, really?

First, let’s take a step back. Historically, we've never seen unemployment as low as it is today. Take a look at these unemployment statistics from the US Bureau of Labor:

  • 15% in 1933 (all time high)
  • 6.1% in 1970
  • 6.3% in 1980
  • 5.7% in 2000
  • 9.3% in 2010 (right after housing crisis)
  • 3.5% in 2019

Right now, the economy is doing great and unemployment is low, which of course is a wonderful thing. However, this poses some challenges in finding the right talent for your business. This is especially true in the food service industry, where turnover rates are already high. 

Everyone is hiring right now, and they’re all looking for people who have the right set of skills and are a good fit. What this means, with unemployment being so low, is that businesses are forced to hire people who either don’t have the right skill set or aren’t the best fit. Sometimes they work out and sometimes they don’t, but you can see how that factors into turnover rates. Businesses can’t afford to be picky right now when it comes to hiring people.

It’s easy to get stressed out about this as a business owner or restaurant owner. We’ve all seen restaurants that were forced to close because they couldn't retain enough staff. It’s even happening in big chains like McDonald’s and Panera that are introducing millions of dollars worth of kiosks to their stores.

Panera isn’t immune to the labor crisis. In fact, turnover is close to 100% in their restaurants every single year. They found that if they can keep an employee for 90 days, turnover rates start to drop.  So, they worked on putting a universal plan in place trying to keep employees for 90 days through investing time in training and technology. 

How Restaurants Can Protect Themselves

So, how can you mitigate the effect of turnover in your restaurant? 

One thing that’s vitally important is to focus on your general manager: hiring the right one and doing what it takes to retain them. The success of your restaurant has to start at the top. Remember,  it’s harder to replace a manager than someone at an entry-level position.

Another thing you can do is follow Panera’s example. Typically, if an employee lasts for the first 90 days then they will likely stay on for at least a year. So build a robust and comprehensive onboarding experience for new employees that trains them well and makes them realize how much they are valued. Have a clear, outlined process that shows them what’s expected of them in both the short and long-term. You’ll be amazed at what this will do for your restaurant in terms of employee retention and costs.

It’s important to look at the restaurant industry’s labor crisis as an opportunity to improve your processes and plan for the future. If you don’t, the restaurant across the street will.

 

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!

Reduce Employee Turnover

 

Everyone in the restaurant industry is dealing with high employee turnover rates.

Everyone in the restaurant industry is dealing with high employee turnover rates. Some may be facing this problem more than others
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