Creativity to Reduce Churn
Restaurant work isn’t easy. It doesn’t matter what segment you play in, employee retention is a hot topic and one that is driving operators to think and act more creatively. While pay is always a leading factor, and getting more interesting as employers are proactively meeting and exceeding minimum wage requirements, employee benefits are quickly evolving to attract and retain workers.
A lot of turnover. 85% of restaurant employers reported half of their staff turning over annually on average, according to a recent Harri survey. There are more options for workers, and it is easy for them to find an alternative job that offers more than simply a paycheck. Plus, the competition for hourly employees spans outside the foodservice landscape as unemployment rates remain low.
WHY DOES IT MATTER?
Last week at the IFMA Marketing & Sales Conference, we learned that 3 of the 4 top operator concerns were around this topic, namely: minimum wage increases, cost of healthcare benefits, and high employee turnover. With a rapidly changing environment on many fronts – delivery, technology, increasing competition, government regulation – operators have a lot of moving pieces to manage to remain competitive. Without the right people, addressing these opportunities is nearly impossible. This all makes identifying a strategy to combat the retention challenge more important than ever.
HOW ARE OPERATORS RESPONDING?
Many are developing some pretty compelling incentives that align with their specific business challenges. The Blue Plate Restaurant Company offers a range of benefits for their employees based on a culture that understands that their staff is the front line in providing the brand experience for guests. In a recent conversation with Casey Saeger, HR Director for Blue Plate, she shared that they are kicking off a “Blue Plate Wellness Committee” that will bring together staff from different areas within the company to ideate on what really matters to its employees when it comes to benefits that extend beyond the “basics”. They already offer a competitive medical plan, meal discounts at all of their unique local restaurants and a 401K match up to 6%, which is pretty unheard of in the industry. Still, they know that the landscape is continually changing and listening to employees will help shape how to best retain them.
From a chain perspective, Chipotle has historically promoted 95% of its managers from within but turnover is making that more difficult in today’s environment. That, combined with an increased focus on customer experience at the store-level, leadership identified a new incentive that hits on both business objectives. They will award bonuses at the end of each quarter to employees whose stores meet their sales goals that are the equivalent of a week’s worth of pay. The expected result? 145% reduction in annual turnover rate and an improved guest-facing brand experience.
The topic of retention is both old and new – historically a challenge in the restaurant industry, the broader competitive set of employer options is forcing us to think about incentivizing employees differently. It still starts with business strategy and objectives – in order to design a retention program that makes sense for your business, it has to align with the goals and the culture of the organization.
“Restaurants Sweeten Pay and Perks to Find Scarce Workers.” Wall Street Journal. Haddon, Heather. July 21, 2019.
“IFMA Marketing and Sales Conference” IFMA. Chicago. August 2019.