7 most effective restaurant employee retention strategies

Behind every successful restaurant business is a team of dedicated and passionate employees. In an industry known for its fast-paced environment and high turnover rates, retaining your valuable team members can feel like a challenge. Picture this: you invest time, resources, and training into your staff, only to see them walk out the door sooner than you'd like. It's a common conundrum, but one that can be avoided with the right strategies. In this blog post, we’ll break down tried-and-true employee retention strategies that will help you keep top talent on your team.

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What is employee retention?

Employee retention is a company's ability to keep its employees in their roles, reducing turnover—which is when people voluntarily or involuntarily leave their jobs. To gauge this, businesses use the employee or staff retention rate.

What is a staff retention rate?

A staff retention rate, also known as employee retention rate, is a metric used by businesses to measure the percentage of employees who remain with the company over a specified period of time. It’s an important indicator of how well your business is able to retain its employees and keep them from leaving for other opportunities. A high staff retention rate implies that your team will stick around for the long haul, while a low rate suggests frequent departures. This metric is crucial for small businesses. Every business aims for high retention to break the cycle of hiring and training, saving time and money.

How to calculate employee retention

1. Start with the number of employees you had at the beginning of a specific period (e.g., a year).
2. Subtract the number of employees who left (quit, were fired, retired) during that period.
3. Divide the result by the number of employees at the beginning. Multiply by 100 to get the percentage.

Formula: (Number of Employees at Start - Number of Employees Who Left) / Number of Employees at Start) x 100% This percentage tells you how well your business is retaining employees. Higher percentages are better, indicating good employee retention, while lower percentages may suggest you’ll need to improve retention efforts. It’s also important to learn how to calculate your employee turnover.

Why is employee retention at restaurants important?

Employee retention at restaurants is important for several reasons.

Food and service quality

When staff turnover is high, it can lead to inconsistency in food quality, service, and overall customer experience. Retaining employees helps maintain consistent standards, which is crucial for customer satisfaction.

Restaurant costs

Constantly hiring and training new employees can be expensive and time-consuming. By focusing on retaining your staff, you save money on recruitment, training, and onboarding.

Customer loyalty

Customers often return to restaurants where they receive good service from familiar faces. Retaining employees can build customer loyalty and repeat business.

Efficient operations

Employees who have been working at your restaurant for a long time tend to be more efficient and productive. They know the menu, kitchen, and procedures well, leading to smoother operations and shorter wait times for customers.

Positive workplace culture

High turnover can create a negative work environment. Retaining employees fosters a positive workplace culture, leading to happier and more motivated staff.

Restaurant reputation

A restaurant known for high turnover may have a bad reputation. On the other hand, restaurants with low turnover are often seen as more reliable and desirable places to dine.

Effective employee retention and engagement strategies

Retaining staff members has significant advantages for your restaurant, as it leads to cost savings, enhances your overall company culture, and elevates the experience for both your employees and your customers. Experiment with the employee retention strategies below in your restaurant, and be sure to track your progress and make necessary adaptations along the way. These strategies will show you how to improve employee engagement too.

1. Survey your employees

Employees crave the chance to be heard. Anonymous employee engagement surveys provide them with a safe space to express their thoughts openly, without fearing any negative consequences. By tapping into their insights, you can gain a clearer understanding of what needs to evolve within your restaurant to cultivate a more positive environment. Your existing team might just hold the key to boosting employee retention in your restaurant. Unveiling these insights is as easy as surveying them to gauge their job satisfaction and gather their suggestions for improvement. Sometimes, small changes can lead to significant boosts in happiness, but how will you know unless you ask? Remember, it's not only about surveying current employees. Creating a plan for exit interviews is equally crucial. This approach lets you uncover the reasons behind employees leaving, allowing you to tackle those issues head-on and create solutions that work.

2. Minimize burnout

Burnout, a state of emotional and physical exhaustion due to prolonged stress, is a long-standing issue in the restaurant industry. Safeguarding against burnout involves understanding how hard your staff is working and the toll it takes on their mental and physical health. To keep tabs on employee workload and establish feasible labor targets, assess the collective team effort required to meet specific goals, like boosting sales. If the workload exceeds reasonable limits, it's good to reevaluate your business model and make strategic changes.

Understand your team’s capacity

In essence, it boils down to being realistic about your team's capabilities. Prioritizing their well-being is important. You need to strike a balance between providing quality service to customers without overwhelming your staff. Considering the tiring nature of the restaurant industry, addressing burnout is crucial. Employees, fatigued by high stress levels and demanding customers, will start to look for alternative places to work. Implementing policies that fight burnout like paid time off, mental health days, and team activities, such as exercise classes can promote your team’s overall well-being.

3. Let your employees make their own schedule

The restaurant industry can be tough. Unpredictable hours and short shift notices can be particularly hard for parents and caregivers. To make things easier on your team, offering them the option to choose their shifts and planning their schedule well ahead of time can provide them with the opportunity to arrange their professional and personal commitments easily. Here's where the Homebase scheduling tool comes in as a smart employee retention strategy. By using Homebase, you can easily create schedules in advance. With Homebase, your schedule is online and always up to date for your team. You can adjust it on the fly, on the bus, or from just about anywhere. And then instantly share it. This way, you and your team members have a clear view of their shifts well in advance. Empowering your staff with this flexibility not only improves their work-life balance but also improves their overall job satisfaction, which can lead to better employee retention.

4. Prioritize employee appreciation

Let's face it, we all thrive on hearing it: "Good job!" These two words can truly brighten our day. Yet, we've come to understand that words alone don't always suffice; actions speak louder. Demonstrating that you value employee happiness is essential, and there's a ton of ways to do it. Kicking off with thank-you cards is a solid start. But going a step further, public acknowledgments on your team's messaging app can do wonders. With Homebase’s shout out feature, your team can give each other shout outs for a job well done.

Employee appreciation events

Employee appreciation events celebrate the collective hard work your team puts in throughout the year. Incorporate fun games, great food, and lighthearted awards for a successful event that your team looks forward to all year. To keep the impact, incorporate appreciation within your company culture. Never underestimate its power. Make a habit of showcasing appreciation every single day. This is just one of many tips to create a better company culture. Extra tip: Consider launching a recognition and rewards initiative. Inject an element of playfulness into your appreciation strategy with enticing perks like event tickets, gift cards, movie passes, or an extra day off. Such a rewards system can be established even within a small team and a modest budget.

5. Work on improving company culture

Developing a positive restaurant company culture requires various strategies: enhancing team communication, granting autonomy, and improving benefits. But simpler steps can uplift morale too. Think team outings, volunteering, or pre-shift family meals. These create bonds, boosting commitment to each other and your restaurant's success. Does your company culture align with employees' interests, strengths, beliefs, and well-being? Fostering a culture valuing diversity, equity, and inclusion resonates with Gen Z, who've faced intense political times. Prioritizing employee health through wellness plans showcases care. Providing a serene breakroom acknowledges their efforts and offers a space to unwind. Facilitating feedback channels demonstrates a culture of openness. Reflect: how does your company culture show employees they're valued here?

6. Increase compensation

Improving the atmosphere at work can help keep employees from leaving their jobs, but it's essential to understand that pay and benefits are the main reasons why people look for new jobs. Increasing salaries can make a big difference in reducing employee turnover. Take a look at how you pay your employees and identify those who consistently do an excellent job. Are they getting paid what they deserve? Giving them raises before they ask for it can really help in keeping them from leaving, as employees often think about leaving if they think they're not paid enough. When you're working with a tight budget and can't increase salaries much, think about other ways to make your employees happy. Can you offer them perks like big discounts, partnerships with nearby businesses, free meals, or extra paid time off? Even if you believe you can't afford it, remember that it costs around $6,000 on average to find and train a new employee. It's often wiser to invest that money in keeping your current team happy and motivated.

7. Improve productivity with time tracking tools

Boosting how much work your employees get done helps them stay focused on their jobs and feel more connected to your company. To make your employees more productive, you first need to keep track of their work hours accurately. It's tough to improve something if you don't know how it's going. A time clock app can be a big help. It lets your staff record their work hours precisely. They can see how long it takes to complete tasks, which helps them manage their time better. It can also show if some tasks take longer than expected or if certain employees need extra help to stay on track. Time tracking software like Homebase goes a step further. It sends reminders to employees when it's time for breaks, helping them stay on top of their work and manage their time well. This makes them more efficient, so they can get more done in less time, and it helps you keep labor costs under control. Homebase also includes tools to prevent cheating on work hours, keep track of timesheets, and handle payroll processing. It makes sure everyone gets paid accurately, and you can manage everything related to time and work effectively.

Employee retention in restaurants is easy with Homebase

In today's tough job market, the struggle to find new workers is real. Plus, keeping employees can be hard in the restaurant world. Holding onto your team is a smart move because it cuts costs, makes your workplace better, and gives your staff and customers a better experience at your restaurant. Give these employee retention strategies a try, and remember to keep track of how they're working and adjust as needed. You've got the idea of keeping employees, know how much turnover costs, understand how to get your employees engaged, and have some strategies to try out. Now, put it all into action. Don't stress about it too much; take it step by step. Once you start using your plan to keep employees, you'll see good results for your team and your restaurant too.

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Frequently Asked Questions about employee engagement and retention

What is employee retention?

Employee retention means keeping your employees happy and motivated so they stay in their jobs instead of leaving.

Why is employee retention important for restaurants?

Employee retention is vital for restaurants because it keeps food and service quality consistent, saves money on hiring and training, builds customer loyalty, and makes operations smoother.

How do you calculate employee retention?

To calculate employee retention, you count how many employees you have at the start, subtract those who left during a specific time, and divide by the initial number. Multiply by 100 to get the percentage.

What are some strategies to improve employee retention in restaurants?

Strategies include surveys to listen to employees, preventing burnout, letting employees make schedules, showing appreciation, enhancing company culture, increasing compensation, and using time tracking tools.

Why should restaurants use Homebase for employee retention?

Homebase offers tools to create schedules, prevent time fraud, and manage payroll. It helps restaurants save money, improve efficiency, and keep employees happy and engaged.