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Dodging the Big Quit—Strategies to Answer the Employee Turnover Rate in the Restaurant Industry

Feb 22, 2022

Dodging the Big Quit—Strategies to Answer the Employee Turnover Rate in the Restaurant Industry

Just under a million people left their jobs in the food and beverage industry in November 2021, a figure that represents approximately 7% of the total workforce. While there is a significant number of workers leaving the industry, the silver lining to this employee turnover rate in the restaurant industry is just over a million workers were hired in food and beverage in December, indicating a lot of the movement in the labor market is “churn,” or workers leaving one job for another with better pay, benefits, or conditions—not necessarily abandonment of the industry.

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So, with the rising average employee turnover rate in the restaurant industry, considering these trends in employee needs will help you keep your best people and attract new workers in a tumultuous job market.

High turnover in the restaurant industry starts at pay, but that’s not where it stops

The number one reason at the top of the list for why workers look for new employment or leave the restaurant industry is pay. In fact, many job seekers are saying they do not even consider applying for job openings if they’re not sure what the pay will be. As such, pay transparency on job postings can help make sure you are getting more engaged candidates in the door.

However, pay is only part of the answer in figuring out how to keep and attract employees in what is still a strongly worker-led job market. Here are the employment trends and innovative solutions employers are using to find stability in the current job market.

The increase, expansion, and diversification of compensation

In response to waning applications, 84% of restaurants reported raising wages over the course of the pandemic, with the Bureau of Labor Statistics reporting the average wage among hospitality workers has seen a 13% increase from just a year ago. But employers are not letting an hourly wage be the only incentive they offer in their efforts to attract employees.

With such a worker-focused market, job seekers are looking at both instant gratification and the long game. ZipRecruiter has reported 12% of restaurant jobs are now advertising signing bonuses, an increase of 10 ppts from pre-pandemic levels. Further, many restaurants are now offering retention bonuses at one or two months in to help retain employees immediately after hire. The long-term focus has expanded as well, with popular brands laying out fast tracks to advancement that lead to management positions and significantly increased salaries for new hires and current restaurant staff.

Restaurant work has historically been focused on the short term, but now, without a solid vision of a beneficial future in place, many employees are leaving for opportunities that pay better or have a more defined career path. Employers must quickly engage with workers to figure out what they need now and where they want to go in order to keep and attract top talent.

Expansion of benefit and perk packages

Pay plays a big role, but it’s just one piece of the puzzle when it comes to employee benefits. With job seekers looking for fulfillment, a feeling of being valued, and incentives for hard work, employers in the restaurant business are getting more creative and generous with benefits and perks to attract employees.

The proliferation of benefits has exploded in a post-Big Quit environment. Benefits traditionally available in other industries have seen greater penetration into the restaurant industry—40% of employers have added paid sick leave for the first time and more than 20% added paid vacation—and other standard offerings, like medical benefits, have become expected even for part-time staff members.

In addition to what are seen as standard benefits in many professional environments, employees also appreciate perks that make them feel invested in the business, valued, and like they’re part of the team. One McDonald’s franchise owner has given high-quality branded swag to team members and expanded their employee meal policy to include a weekly allowance for taking food home to their families. In addition, workers who are diagnosed with COVID-19 have gotten groceries delivered to their homes, and restaurant traffic has been throttled based on staffing, focusing exclusively on drive-thru when staffing levels are low.

At the end of the day, pay might be the main reason workers move jobs in the restaurant sector, but just offing higher rates of pay won’t necessarily keep them happy. Restaurant owners need to engage with employees to make sure the benefits offered are matching expectations, and perks are worthwhile and effective at boosting morale and developing a positive workplace culture. The wide variety of restaurants in operation and the unique, team-based nature of restaurant work means there are many ways to develop community and support.

Restaurants shift to career-focused support

With restaurant workers looking to be taken more seriously in their careers, employers are getting both creative and expansive in ways to create a supportive work environment as they do so.

Brinker International, which owns Chili’s and Maggiano’s, has indicated—in addition to pay-based incentives—they are experimenting with programs to support employees by partially underwriting child care services and GED and associate degree programs, even for part-time workers. McDonald’s has done similarly, adding millions of dollars to their employee opportunity program, offering assistance with GED courses, college courses, academic advising courses, and English as a second language courses.

Options like this help communicate to employees they are seen as more than where they are right now in their careers and work to build loyalty as restaurant employees grow their careers as professionals. With little time or resources to waste in getting these programs up-to-speed, it’s essential to engage with restaurant employees to get feedback on innovative benefit packages to be sure they’re meeting employees’ needs.

The importance of flexibility and stability in scheduling

In times of adversity, fostering a feeling of control and predictability can make a significant difference in lowering workplace stress. While the restaurant industry has always been well-known for its scheduling volatility, predictability and self-determination are now playing a large role in attracting workers. Restaurant operators must now be ready to adjust for employee needs, whether it’s for flexibility or a set schedule.

Restaurant employers now must also compete with the gig economy, where employees can be their own boss and set schedules completely on their own. Taking steps to make it easier to switch and trade schedules—and making the shift lengths appealing to both an audience that wants to pick up a quick two-hour shift or someone who wants to pick up a double—can be key to attracting and retaining a workforce with diverse scheduling needs.

While many workplaces have tended toward remote work in the last two years, that’s obviously not possible in the restaurant industry. However, it is helpful to remember employees don’t necessarily need an elaborate benefits package in all instances. At a fundamental level, employees want to work in safe conditions that provide predictable schedule opportunities, consistent hours, and the ability to spend time on their own while prioritizing their quality of life.

Innovative solutions to meet employee needs

Workers in the restaurant industry can have needs unique to their situation. For example, research has shown meeting one of these needs in particular led to a 50% reduction in turnover and positions being filled 52% faster than those not actively meting this employee need. What is it?

Daily pay.

Companies like Jimmy John’s and Manna Inc. are working with new service providers that meet a once-hidden need of employees to be granted access to their compensation from tips, mileage reimbursement, and wages on the same day. This option has not only brought employees back to companies they left for other employers offering faster pay turnaround, but it also helps employees break the cycle of needing payday loans or being subject to overdraft fees.

With the cost-of-living expenses rising, increasing the pay cadence from bi-weekly to weekly or even daily can help employees that may not be able to wait between pay periods.

Reducing the average employee turnover rate is possible—if you listen to and act on employee feedback

Whether you call it The Great Resignation or The Big Quit, a high average employee turnover rate in the restaurant and food service industry is leading to significant and lasting changes. Moving forward, the most successful employers will be those who can identify what employees want and can best meet those needs, sometimes in completely innovative ways. Only by listening to what employees want will restaurants be able to emerge from the pandemic with a stronger, happier workforce—primed for growth.

What are you doing to find all the transformative ways to get feedback from employees and meet their needs without raising overhead?

See how prioritizing your employee engagement efforts can help counteract the employee turnover rate in the restaurant industry, provide ROI, and lead to improved customer satisfaction with our best practice guide, Why customer-centric organizations prioritize the employee experience.