Restaurant Turnover and Recruitment Challenges are Here to Stay!

I have been in the hospitality recruitment business for 30 years (and will now stop counting!) and every year I hear that hospitality recruiting agencies will no longer be needed. The goal has always been for restaurants to find their own staff and as Staffing Partner to my clients we help with that goal. But the stark reality that restaurant turnover and recruitment challenges are here to stay!

The best restaurateurs know that it takes more than a good restaurant menu to bring guests in the door. Every year, new restaurant industry trends shape and reshape the industry, and staying ahead of those trends is the difference between a restaurant that succeeds and one of the many that fail every year.

My clients all focus on guest enthusiasm, profit and success but the biggest challenge restaurant owners face today is staff turnover. The loss of an employee at your restaurant is more than just a change in your staff – it’s all of these things.

Cost: In time and money for hiring a new employee (e.g. advertisements, your time, the time of staff that you may use for interviewing, etc.)
Shift Changes: Without proper notice, the loss of an employee can be disastrous to your shift scheduling
Training: Exposure to your restaurant and its operations is essential to on boarding a new employee. The cost of this is both time and money.
Customer Experience: Ramping up a new employee takes time and that can sometimes mean a dip in the customer experience in your restaurant while new employees get up to speed.
The Loss of Additional Staff: when you lose an employee you generally will not be able to operate without that shift being covered – which means other employees are working doubles. There needs to be a sense of urgency to replace that employee before other staff members tire of working doubles and start looking for a new job themselves.

When looking at that list, think about the cost involved, in dollars and cents. My research shows that, on average, the cost of hiring an hourly employee (such as a restaurant employee) can be as much as $3,500. In the restaurant industry, that’s an investment that walks out the door nearly 50% of the time.

With all of that in mind, it’s more important than ever to understand the staffing trends in the restaurant industry – it may be your ticket to overcoming the challenges!

1. Labor Challenges Are Emerging (Again)

The economy is on the rise, unemployment rates are going down – and restaurants are having more trouble recruiting and retaining their employees. For the 15th year in 2014, restaurant employment growth outpaced overall employment growth in the private sector. A gap between open positions and available candidates is the consequence. In other words, you’ll need more staff and the candidates simply won’t exist. According to the NRA, “Recruitment and retention of employees continue to strengthen as a top challenge for restaurant operators in 2017. As the economy keeps improving and employment levels rise, there is more competition for qualified employees to fill vacant restaurant positions.”

2. Employee Turnover Is Rising

Recruitment is not the only challenge restaurant owners face as a result of the improving economy. When jobs were more scarce, people were less likely to leave their existing jobs. Now, an improved economy means employees are more likely to leave (and leaving existing jobs faster for new opportunities). Coupled with the fact that restaurant turnover is always higher than the overall private sector and you have a recipe for disaster.

“Currently, four in 10 restaurant employees are aged 16-24, however, the number of job seekers in that age group is shrinking.”

While servers and kitchen staff were among the lowest turnover rates (28%), that remains a troubling churn rate for most restaurants in a tight labor market.”

Some other data-driven insights from the report you’ll want to hear about:

Weekly turnover rates increased from July to September on a weekly basis.
An employee’s position in the restaurant is a greater signal of turnover risk than region.
Pay rates were highest in the West and lowest in the South, and that gap is likely to increase in 2018.
Base pay rate has little impact on turnover.

Bottom line: Good help is hard to find, even harder to keep. You need to discover ways to source top talent. Many companies are turning to Hospitality Recruitment Agencies to make proactive calls to source candidates not found on the internet. They also generally offer a free replacement guarantee which helps you control your hiring costs.

3. The Labor Pool Is Shrinking (And Aging)

As if turnover and labor challenges are not enough, a shrinking and aging labor pool is going to make hiring much different. Currently, four in 10 restaurant employees are aged 16-24, however, the number of people in that age group who are looking for jobs in the industry is shrinking. This prime age group is participating less, which means restaurateurs will have to look elsewhere… like to the aging population and workforce. This means a change in how you hire, and how you create a position culture in your restaurant staff.

Bottom line: employee turnover is on the rise, and it doesn’t look as if it will decrease anytime soon – which means there will be changes in hiring restaurant staff from all aspects. How you respond will make or break you.

Solve Your Recruitment Challenges