2020 was a challenging year for restaurants. On the sales side, there have certainly been fluctuations in business as local public health restrictions changed and customer behavior shifted.
However, the COVID-19 pandemic has also presented new challenges for food and labor costs. For your labor cost in particular, hiring and retaining quality restaurant employees has gotten more complicated.
Although it may not be the first thing on your mind during a challenging year, focusing on employee retention can actually be an effective strategy for improving your restaurant’sfinancial health. A high turnover rate translates to a high turnover cost, impacting your team morale, operations, and your bottom line. (Use this employee turnover calculator to determine how much turnover is costing your restaurant business.)
So how can you improve your restaurant employee retention?
Pre-COVID retention strategies
Of course, there have always been strategies available for restaurant operators to improve their restaurant staff retention rate. Three of the most common strategies were to increase pay, add benefits, and offer specific career advancement opportunities.
However, put yourself in the shoes of a potential applicant for a minute, and think about these job boards. Every job posting likely looks about the same, from the wage to job description to benefits. Why does the applicant have any incentive to look at your restaurant group in particular?However, these common strategies are not available in the same way during the pandemic. Sales have decreased for operators, leaving less funds for wage or benefit increases. Forecasting has become more unpredictable, fueled by fluctuating restrictions and COVID cases. Restaurant labor costs have changed with new ordering channels and customer expectations. And with so much uncertainty, it is difficult to think about long-term growth opportunities for your team.
If you aren’t able to implement these strategies, there are other areas to examine to improve restaurant employee retention at your business during a pandemic.
Updated recruiting concepts for retention
Recruiting as a strategy is underused in the restaurant industry. Historically, a restaurant operator might just post a paid job ad on a paid jobs board.
Recruiting is different from hiring. Recruiting is proactively trying to find team members who are a good fit for your restaurant business. Leveraging this powerful tool can have a huge impact on your employee retention in the long-term. Here are the top-level concepts of recruiting to start considering.
Distinguish your restaurant group by making it clear what makes it different from other restaurant businesses. What’s your vision for your business? What makes it special? What is it like to work at one of your restaurants? Make sure you answer why the applicant should work for your restaurant group, bringing in aspects of your company culture and how it trickles down to all of your locations. Being able to articulate this distinction is key to every recruiting effort.
In the digital age, and even more so in the socially distant age, having a curated online presence for your recruiting is more important than ever. Before, potential employees could visit one of your restaurants to understand the atmosphere. Now, they are limited to only your online presence.
If you’ve put time into considering how to distinguish your restaurant business, use these insights to drive your social media presence. Your social media engagement cannot only grow your sales and fan base, but it can also help grow your reputation as an attractive place to work.
For your more targeted job postings, focus on leveraging what distinguishes your business as an employer in your descriptions. In addition, try to think outside the box and create specific postings on non-traditional job boards. For instance, if you are hiring a part-time, flexible role, are there local college or university job boards on which you could advertise?
Many of the more “traditional” restaurant employee referral programs weren’t always optimal. Usually, restaurants would use these types of programs when staffing levels were already dangerously low, which created morale issues with current employees.Finally, don’t forget the potential to attract applicants through your own website. A custom career page on your website can be an important tool, and yet it is often underutilized. You can use this page to make your case about what makes your restaurant business special. Featuring the page prominently on your website can show how you value your team members. It is also a space to celebrate current employees and showcase your business’ culture.
Engaging with your community can help you develop a reputation that pays long-term dividends. For instance, volunteering regularly with local organizations not only shows off your company culture, but it can also create more connections to potential applicants. Consider targeted volunteer work, such as teaching a guest class at a local culinary program. Like many recruiting efforts, growing your reputation within your local market can both boost sales and also help you attract better applicants.
Leverage employee referrals
Once you have updated the channels you use for publicizing job opportunities, consider looking at other fruitful ways to recruit employees. Your current long-term, loyal employees have already shown that they are a good fit for your organization. Leveraging referrals from these employees can be a powerful recruitment tool—if done well.
Many of the more “traditional” restaurant employee referral programs weren’t always optimal. Usually, restaurants would use these types of programs when staffing levels were already dangerously low, which created morale issues with current employees.However, a more intentional approach to referrals can be extremely beneficial. First, start with communicating with your staff about why you are using this approach. Make it clear that you want to hire more employees like them, because you value their contributions. With this communication, your employees will better understand what you’re looking for and give referrals more weight.
In addition, implement a continual referral bonus. This should include an impactful amount, paid after a referred employee reaches an anniversary like three or six months. Make sure to individually celebrate the employee who made the referral with something like a separate check or a handwritten card.
Why is recruiting important?
Many restaurants fall into the trap of trying to attract every candidate possible for a role, However, your business is a unique environment, and you want to hire the kind of people who are a good fit. You actually don’t want every single person to apply.
Recruiting helps you ensure applicants filter themselves before you even have to. If you are clear on the kind of restaurant staff you need in your business, your recruiting practices can encourage applicants to self-filter if they’re not a good fit.And finally, recruiting with employee retention in mind can help grow a sense of belonging for your restaurant employees. When your applicants have the same values as your restaurant, they will feel like they have a sense of belonging and want to stay.
Hiring concepts for retention
After all of the work you put into recruiting, the next area to evaluate is your hiring strategies for retention. Your restauranthiring and onboarding process is a critical part of your retention. In some ways, hiring strategies should mirror great cooking, with a focus on selection and process to build cohesion.
First, focus on creating a strategy for your restaurant hiring that is standardized for all positions. Especially if you are a multi-unit restaurant, with many people involved in the hiring process, you want your team to be able to trust the system. If hiring for restaurants is standardized, you can better ensure your team will achieve more consistent results.
Prepare your managers for success by using smart tools. A restaurant hiring tool like HR software can process all applications and applicant progress in one place, replacing time-consuming paper or email applications. Many of these hiring tools also offer options to create custom interview resources that reflect your targeted recruiting practices.
In addition, if your managers are doing the hiring themselves, make sure to train them thoroughly on your company’s hiring process. You should be developing a cohesive process that communicates value to your applicants from the very beginning. Pay attention to manager feedback, and even consider implementing applicant or new hire interviews to receive their feedback as well.
Finally, ensure that your team practices transparency with your applicants. Honesty in the hiring process leads to appropriate expectations for both sides. For instance, using phrases like “Not everyone is going to be a fit here because…” or “I hope you like high volume because…” can reflect expectations about a role while maintaining a positive light.
Termination as a strategy for retention
You may hire restaurant employees who, when placed in your restaurant’s day-to-day environment, turn out to not actually be a good fit. If a restaurant hiring mistake does happen, how you react as an owner, operator, or manager can set the tone for your entire team.First, keep the following in mind to minimize the impact that a wrong hire has on your team:
- Avoid shaming and blaming; instead be solution oriented
- Avoid the sunk cost fallacy; instead think about future costs
- Avoid schedule justifications; instead find a definitive solution now
Although it can be difficult to face a termination, it is important to ask yourself, “what do you have to lose by procrastinating a needed fire?” The longer someone who isn’t a great fit on your team is around, the longer they can cause more damage to team dynamics or your labor optimization.
To be proactive about your termination strategy, consider implementing the following practices:
- Build termination into your training and review process
- Build employee fit assessments into first 90 days of employment lifecycle
- Use write ups if employee continues poor behavior/performance
- Make a quick termination if there is no other option
In your hiring strategies, be realistic that some hiring mistakes will happen. However, how you react determines how that mistake will affect your restaurant employee retention as a whole.
The COVID-19 pandemic has created a tough labor market. Fluctuations in business are changing labor calculations, and general disruption of the labor market is affecting the labor pool. However, you can always make the best of the situation by focusing on employee retention first. With the right restaurant employee retention strategies in place, you are better positioned to face all other challenges.
R365 Payroll + HR makes it easy for you to hire, onboard, pay, and support your workforce, and is integrated with the Restaurant365 all-in-one, restaurant specific platform that also includes restaurant accounting, restaurant operations, inventory management and scheduling. Request a free demo today.