Hiring Restaurant Employees: The CFO’s Role in Developing a Strategy

Restaurant staffing shortages across the industry are impacting operating hours, the customer experience, and your bottom line. Hiring restaurant employees and retaining them is no longer just an issue for the HR team. As the staffing shortage continues to negatively impact profitability, you as a CFO must play a critical role in your restaurant group’s hiring and retention strategy.

Investing in talent attraction and, perhaps more importantly, retention, has never been more essential. As CFO, you can play a key role in the corporate direction for hiring restaurant employees, retention and staffing investments.

Addressing the hiring crunch

The staffing crunch is due to several factors, ranging from many candidates changing careers during the pandemic to other factors like inadequate childcare infrastructure. On top of that, nearly every restaurant in the industry is hiring at the same time, competing for the same small labor pool, and giving workers more employment options than ever.

The hiring crunch is especially tough for back-of-house employees, such as line cooks and dishwashers, who historically have made lower wages than many front-of-house employees like servers.

Hiring restaurant staff

Why hiring restaurant employees is now a CFO concern

As CFO, restaurant staffing strategy may not have historically been part of your responsibilities. However, the restaurant staff shortage has now boosted labor to the top of the operational challenges list.

Without enough staff, restaurants may have to cut operating hours. If you can’t hire enough people to staff your restaurants, you may be forced to pay overtime, or cause a negative feedback loop of burnout and attrition in your current staff.

While you may not be part of the day-to-day execution of hiring and retaining employees, as CFO, you can play a critical role in developing a strategy to guide how to hire restaurant staff and retain employees once they’re hired. You are uniquely positioned to ensure your organization has the resources it needs to invest in talent through new initiatives and development opportunities.

In the short term, you have the power to direct investment in your team to prevent a labor shortage from negatively impacting operations. In addition, you can also invest in building the kind of staff model that can help boost operations, customer loyalty, and overall sales in the long term.

hiring restaurant employees

The high cost of employee turnover

The cost of turnover has an enormous impact on your financial health, consequently, your labor cost analysis must always factor in your employee turnover.

Turnover costs include the recruitment process, such as placing ads for job listings, as well as the hiring process, like a manager’s time to review applications, coordinate with candidates, and conduct interviews. Finally, there is also the cost of training new employees and a period of lost productivity as they learn their responsibilities.

Employee turnover also includes some non-quantifiable costs, such as the stress on your existing team to cover staff shortages, as well as the impact on employee morale when there is a team disruption.

The average cost of restaurant turnover in 2021 was $1,869 per hourly employee, $8,119 per manager and $14,689 per general manager, according to statistics from the National Restaurant Association.

As you decide where to invest in your labor, your high-level strategy should consider that it is much cheaper to retain existing employees than attract new ones. When it comes to turnover, optimizing your labor costs starts with a focus on retention.

(Check out Restaurant365’s free employee turnover calculator to determine how much turnover is costing your restaurant group.)

hiring restaurant employees

Why your strategy must focus on protecting margins and investing in people

The ideas of protecting margins, and investing in people, are not in opposition to one another. In the current economy and in general, investing in your people IS protecting your margins.

For many restaurant groups and businesses in general, there is an expectation that investments should show quick payoffs. However, implementing industry skills training, mentorship, and a healthy culture takes time and may not show immediate quantifiable return on investment. But over the long term, you can help make your labor strategy more resilient, no matter what the broader restaurant industry trends may look like.

Developing your staff talent is not a quick fix; it is an entire talent strategy. As CFO, you are in a unique role to direct these long-term investments and set priorities for this strategy.

Investing in hiring restaurant employees

Benefits and wages are undoubtedly important for employee retention but investing in your staff can set your organization apart from the competition. While it can be difficult to document the exact ROI for professional development, avoiding turnover can pay dividends for your restaurant business.

Develop a long-term employee strategy

Addressing long-term hiring challenges requires consistent effort and an intentional plan. While you may need to fill open roles immediately, that shouldn’t overshadow  devoting energy and resources into a hiring strategy that addresses larger issues like career pathing, work/life balance, and a healthy company culture.

Encourage restaurant management as a career choice

Your employees care deeply about what opportunities are available to them as part of your organization. Promoting from within can act as a hiring and retention strategy. Your applicants and employees should understand what career opportunities they can have by joining and staying with your company. For existing employees, they need to see it in practice and through your company communications and mentorship.  For hiring restaurant employees, you must position your job openings as career opportunities.

Focus on training and development

Your employees want to learn and grow as part of their careers. By showing you can provide coaching and training, you offer value as an employer that they may not find elsewhere.

For back-of-house employees training and development can function as a culinary school, deepening loyalty and retention. Additionally, formal and informal training in different areas of operations can help encourage growth and increase employee investment in your organization.

Attracting hourly employees during the hiring crisis

While you need to focus on an overall retention strategy, you may also need to attract new hourly employees to your restaurant. Here are a few areas in which to invest:

hiring restaurant employees

Offer competitive wages and perks

The wages and benefits that you offer should be competitive in the industry. Ensure that these details are listed in your job postings and communicated to all existing staff.

In addition, consider leveraging surveys and listening sessions with current employees to uncover needs that your benefits can address. If you can tailor your benefits to match employee stressors, such as childcare issues, tuition reimbursement, or healthcare, you can help your restaurant stand apart as a potential employer and encourage existing staff to stick around.

Leverage hiring bonuses and referral bonuses in hiring restaurant employees

In hiring restaurant employees, hiring bonuses, paid after six months of employment, may help new hires get through the initial transition period and become invested in the value of your organization. In addition, your current loyal employees can be a powerful recruitment tool by providing referrals that are paid out at certain specified new-hire anniversaries.

Hiring Restaurant Employees

Champion employee work-life balance

Ultimately, your organization may need to commit to addressing long-standing labor issues in the restaurant industry. For instance, advertising and offering a predictable schedule that still provides employees with the hours they need to make a living can attract steady, quality employees who’ll want to stay with your company.

Conclusion

Building innovative hiring and retention strategies helps to hire the right employees and encourages them to grow with your restaurant business. Developing strategies for hiring restaurant employees and retaining them is no longer just an HR issue. As CFO, it is incumbent upon you to lead the charge to minimize the impact that restaurant staff shortages and employee turnover have on your bottom line.

R365 HIRE makes it easy to attract, hire, and onboard the right employees for your restaurant group and is part of the Restaurant365 all-in-on restaurant management suite that incorporates a number of labor-related tools, including labor reporting,  payroll +HRscheduling, as well as restaurant-specific accountinginventory management, within one cloud-based platform.

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