A Complete Guide on How to Reduce the Employee Turnover Rate in Your Restaurant

A Complete Guide on How to Reduce the Employee Turnover Rate in Your Restaurant

 Restaurants are known to be notorious for having a high employee turnover rates. According to economists, the employee turnover rate in the restaurant sector was 62.6% compared to a 42.2% turnover rate in the overall private sector.  The employee turnover rate in the economy’s hospitality segment in 2015 rose to 72.1 percent, up from 66.7 percent in 2014, according to a recent Bureau of Labor Statistics report. This higher-than-average turnover rate could affect your restaurant’s bottom line. Happy employees help reduce turnover and decrease the need to waste time and money searching for new recruits. Find out how to keep your restaurant staff happy and motivated here.

Employee Turnover Rates vary for different sectors of the restaurant industry.  In fast food restaurants, where pay is low and work is mechanical, turnover tends to be relatively high.
Fine dining establishments often have a lower turnover rate because the work involves a greater investment in training and a higher level of skill so employers are more likely to pay higher wages and provide additional incentives such as health care benefits.

How to Reduce the Employee Turnover Rate of Your Restaurant

Follow the below-mentioned points and you will garner the knowledge on how to reduce the employee turnover rate of your restaurant.

1. Hire Right

That person who is “good enough” may not be the right person for your open position. Aim for the outstanding employee, and you will reap the rewards. Consider not only their qualifications and skills but envision how they will work with your existing team. Create a detailed Job Description that speaks clearly about the work the employee would have to do.

The best employees are those who are willing to do the work, have the ability to perform to your expectations and are manageable. Do you have a hiring process to find these candidates? Read in detail how to find the right employee for your restaurant to reduce the employee turnover.

Weed through the interview process with this list in mind and avoid making mistakes while hiring the right employee for your restaurant:-

  • Check the resume of the applicants. Be careful if they change jobs often. Changing jobs often might make you question their credibility and will leave you with doubts about whether the interviewee will be able to bring long term gain for your restaurant.
  • Check, and double-check their references. This means calling old supervisors, not just the ones they list. Pay attention and give thought to negative references.
  • During the interview, ask about their short and long term goals.

2. Train Well

Good training shows your employees that you believe in them. Provide a consistent orientation process and give your new hires all the information they will need. Coaching is an ongoing process that involves constructive and consistent feedback, as well as positive reinforcement.

When your employees feel knowledgeable about your restaurant, they will feel more confident in their new position. Give every new employee a job description, training manual, and handbook. The people you have hired want to work for a well-managed restaurant. Be professional in your training.

You will also have a more efficient work force when your employees are cross trained. When you teach new skills and bolster old ones, you will boost your restaurant employees’ confidence, making them feel more invested in their jobs and less likely to leave.

Lastly, provide on-going training for your employees. Provide them with new skills in areas such as food prep, customer service, and marketing. Such tactics help a lot in reducing the employee turnover rate of restaurants.

3. Be a Good Paymaster

One of the top five reasons employees leave their job is for a better paying position somewhere else. Stay competitive and keep the best talent by offering competitive wages to retain your employees. Even more, reward your excellent employees with a raise or with an award. Conduct regular performance reviews and offer raises at this time. Even small amounts can reduce the employee turnover rate of restaurants.

In the free marketplace, cash is king. An added benefit of increasing your employees’ pay is that it allows you to ask more of them — well-paid employees have an incentive to work harder and commit themselves to their job, while employees who are making relatively little won’t usually have the same level of dedication or loyalty. -Tushar Malkani, Executive chef and hospitality manager at Khar Gymkhana​

4. Treat Your Employees Well

Treat workers with respect, even if they perform lower level jobs such as washing dishes. No matter how much you pay, if you do not treat your employees in a proper and respectable manner you increase the chances of increasing the employee turnover rate for your restaurant. Provide good working conditions such as a well-ventilated kitchen and a proper area to relax between shifts and during breaks. Also, provide good quality food to your staff.

Your employees’ knowledge, skills, and behaviors are the reasons customers’ return, so treat them with the highest regard to reduce the attrition in your restaurant.

5. Give Incentives and Rewards

Recognize and reward your employees and you will see a definite decrease in your employee turnover rate. Also, consider giving a Longevity Bonus to reduce the attrition in your restaurant. If your employees work at your restaurant for more than a particular period of time, offer them a monetary reward.

Below we have listed some of the creative ways you can cultivate better relations with your employees which will help you to reduce employee turnover for your restaurants:

  • Monetary Reward- Start an employee of the month program. Begin a recognition program for employees that let them receive monetary rewards for good service. Corporate recognition could decrease the turnover rate for your restaurant.
  • Shift Choice- There might be a busy shift that everyone wants or perhaps they want a weekend off. Giving the occasional shift choice, as long as it makes sense for your business, will be a coveted prize that your employees will strive for.
  • The employee of the Month- This option may be perceived ‘old school’ but you would be surprised how far a small amount of recognition goes to bolster the operations of your restaurants. Post their picture in the break area and let them have the steak for their staff meal. Highlighting a member of your staff also makes for a great social media post!
  • Gift certificates for a hotel stay, Free oil changes, Day at the spa, Movie theater gift certificates, Gift card.

It is also important to consider what do you base the rewards on. Think about positive customer comments or feedback cards, sales performance (do they consistently upsell?), comments from coworkers and their overall noticeable performance. You can use an intelligent Point of Sales software that helps you track the performance of your waiters.

6. Schedule Well

Do you have employees complaining about the long hours? Think about the size of your staff and the needs of your restaurant and your employees. Make sure they are working an appropriate number of hours. Making your restaurant staff over work will not bring about a considerable amount of profit for your restaurant, as the quality of their work will reduce substantially. To avoid such situations in your restaurant, you must rearrange your schedule to reduce the employee turnover rates.

7. Provide the Ladder for Growth

One of the major ways to reduce employee turnover is to provide the restaurant staff the opportunity to grow in their work. Do you have opportunities for advancement? Every employee should have this potential. Does your hostess want to become a server? Does your dishwasher want to be a line cook or line cook wants to move up to head cook? Capitalize on your employee’s strengths. 
Offer training programs for your employees. For example, Meatheads in Illinois paid for English classes for their non-English speaking employees who showed leadership potential. This small gesture enabled some of their dishwashers to climb the ladder to general manager positions. In turn, this kept their employee turnover rate below 30% – well below the national average.

8. Be a Dedicated Team Leader

What if your employees don’t really like each other? Handling conflict may be one of your toughest tasks as a restaurant owner. You must assume the role of a team leader to ensure your team cooperates and works well together despite any differences or conflicts.
Master the mediation tactics to increase your skills in times of need. These tactics include-

  • Identifying the source of the conflict.
  • Looking beyond the incident.
  • Requesting solutions.
  • Identify solutions both disputants can support.
  • Agreement

Nurture your employees. Coach them and provide constructive feedback and positive reinforcement.

9. Promote a Friendly Work-Environment

The work culture of your restaurant plays an important role in retaining your employees. Be wary of restaurant staff segregation, that is, the restaurant management versus the staff. Promote healthy communication by holding regular staff meetings with your entire staff.

restaurant staff's idea and their inputs in the operation of the said by Niwoon Pai


There is nothing like a little friendly competition to really get your team motivated and have some fun. Put a contest board in your break area and make sure you update it daily with the latest results to keep the team excited. Here are a few ideas that are easy to implement:

Use Sales Bingo

Make sure you use this innovative idea, print out a bingo card for each server and put different menu items in each box. Every time a server sells an item, they check off that box. The first server to get BINGO wins. This is best utilized for high margin or overstocked items.

As a restaurant owner, you can pair a member of the back of the house with a member of the front of the house. Now create a list of tasks or achievements that you can assign points to. (For example, Being on time 3 days in a row= + 5 points, Perfect side work for one week= +10 points, Forgetting to clock out = -3 points) The first team to reach 50 points wins the reward!

Online Reviews

You can very innovatively use the concept of online reviews to further encourage your employees to work better and reduce the employee turnover rate of your restaurant.

Give your team some business cards with their name on them. The card should say something like “My name is ______ I’m so glad you enjoyed your experience today. Give us a review on _________(website details) and mention my name.” The employee with the most positive reviews that month wins the reward. Very easily you can turn the online review challenge into an enticing opportunity for your team members to shine.

Use Your Employees’ Suggestions

Listen to and communicate with your restaurant staff for increased employee retention. You are busy at work, but make sure to take the time each week to ask questions and show you value your staff. Take their input and make small changes. Implement some of their suggestions, and they’ll have more “ownership” in your business and be less likely to leave thus improving your employee turnover rate.

10. Conduct Exit Interviews

Despite all your employee retention strategies, unfortunately, some of your employees may still leave. It is important to find out why. Have an exit interview when employees leave your restaurant. Asking for this feedback may uncover some changes you need to make to retain your staff. If an employee decides to leave the restaurant, sit down with her and discuss her reasons for leaving. Ask her feedback on ways to improve the conditions for workers. If you find the reason for high turnover rates, it helps pinpoint the changes you need to make to keep employees for longer periods of time.
If exit interviews indicate multiple conflicts with the same manager, speak to the manager to discuss ways to improve relationships with other staff members. If the manager does not seem to get along with others, you may want to consider replacing him.

 Exit interview helps to know the short comings of an organization towards its employees.- Murari Kumar, F&B Manager at Leisure Hotels Pvt Ltd.

11. Thank Your Restaurant Staff

Thank you. These two words are so easy to say, but in the fast-paced restaurant environment, these two little words are often forgotten. Employee turnover rate increases when employees are under-appreciated for all of their hard work.
Take the time to thank your employees, give them a pat on the back or an encouraging word. Remember, happy, appreciated and valued staffs are loyal and long-standing.
Often, lower wage employees can’t see how their performance makes a difference. Let each of them know how their contributions make the entire restaurant more successful.

We hope that this above article helps you to garner some knowledge about how you can reduce your employee turnover rate which will, in turn, help you bolster your restaurant’s profit! Try out these tips for employee retention and let us know how they worked out for you!  

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