While offering competitive wages is a key factor in improving employee retention rates, it’s not the only way to keep your restaurant staff committed. This article shares the best retention strategies along with estimated implementation timelines to help you plan effectively.
How To Increase Restaurant Employee Retention
Employee retention refers to an organization’s ability to retain a certain number of employees over a specific period. A high retention rate means that you provide a healthy work environment.
Keeping your restaurant’s retention rate high saves Restaurant Managers significant costs.
According to Edie Goldberg, Ph.D., a talent management expert with over 20 years of experience in workforce strategy, replacing an employee is significantly more expensive than retaining an existing one. In fact, according to him, the cost of turnover is approximately 33% to twice the employee’s annual salary, depending on the position’s seniority.
7 Ways To Improve Employee Retention Rate
| Strategy | Description | Estimated implementation timeline |
|---|---|---|
| Offer competitive benefits and pay | Provide salaries and benefits that are well above the average market rate and align with what employees generally desire based on data | 1-3 months |
| Offer better work-life balance | Promote a culture where managers encourage staff members to use their PTO and enjoy life outside of work | 1-2 months |
| Invest in manager and staff training | Encourage employee cross-training for staff members and enroll managers in soft skills programs to enhance their leadership and interpersonal abilities | 3-6 months |
| Promote existing employees for internal jobs | Prioritize advancement for current staff members before considering external hires | 2-4 months |
| Offer budgets for employee development programs | Invest in your employees by providing free access to certification programs and training that enhance their skills and career prospects | 1-3 months |
| Improve your onboarding process | Ensure that new hires receive proper support to help them quickly adjust to their roles | 1-2 months |
| Foster a supportive work environment | Enforce strict policies against harassment and equip employees with the skills needed to handle such circumstances | Ongoing |
Offer competitive benefits and pay
In a study conducted by the Pew Research Center, one of the top reasons cited by employees for leaving their jobs is low pay. You can easily mitigate this by offering competitive benefits and pay to enhance restaurant staff retention.
If you’re at a loss as to where to begin when looking into benefits to include in your offer, start with these top ten employee benefits deemed valuable according to a survey of 10,000 full-time workers in the U.S. and Europe:
- Company-sponsored pension
- Paid time off for mental health
- Healthcare cost reimbursement
- Flexible work hours
- Miscarriage leave
- Four-day work week
- “Summer Fridays” or the ability to leave early every Friday
- Private dental insurance
- Private health
- Family health insurance
These may not all be applicable to your business, so choose those that make the most sense and would work for your organization.
Meanwhile, when it comes to pay, you can start benchmarking your offer against the average salary for the position in your state and city, as these can significantly vary due to the cost of living. For example, Bakers in New York City earn $6,250 more per year than Bakers in Miami.
Once you know the average salary, compare it with how much your competitors offer. This will help you understand where your pay stands relative to similar restaurants.
Offer better work-life balance
Managers play an influential role in helping employees achieve work-life balance.
Employees’ choices, such as not using paid time off, are often influenced by how they think their decisions will be perceived by their managers.
To master how to retain staff, create a culture that actively encourages employees to build a life outside of work. Even if you offer paid time off, flexible work hours and “Summer Fridays”, if employees worry about how it will impact their careers, they will not truly feel supported.
Promote existing employees for internal jobs
One of the best ways to keep good employees is to offer opportunities for promotion. When a senior position opens up, consider looking at your current pool of employees and taking note of who’s been excelling and interested in moving up.
Promoting from within, rather than posting a job and hiring externally, motivates your team by giving them the chance to encounter new challenges, earn more money and advance to roles that align with their career goals. This sense of growth fosters loyalty and encourages them to go above and beyond to support your business.
For potential candidates, it demonstrates that your restaurant values employee development. This creates a positive impression, signaling that you do not treat employees as expendable but rather as important members of the team with the opportunity for long-term growth and success.
Invest in manager and staff training
According to a survey, seven out of ten employees would quit their jobs if they had a toxic manager.
Beyond hurting your retention rate, poor management also causes significant financial losses. SHRM’s report states that between 2019 and 2024, bad managers led to a total of $223 billion in turnover costs.
Hiring Managers face significant pressure when filling leadership positions as these roles shouldn’t be given solely based on skills, experience or age. Emotional intelligence is just as important. Leaders must understand that their role is to coach, not micromanage or boss people around.
Investing in manager training will help managers become better supports. Effective training programs can include topics such as effective communication, conflict resolution and performance management.
Similarly, restaurants should invest in cross-training their staff. Cross-training develops an employee’s skills and knowledge to perform other job functions aside from the ones they were hired to do.
Cross-training builds employees’ confidence, so they feel prepared to handle tasks when a colleague is on leave. It also gives them an understanding of their coworkers’ daily tasks, which fosters teamwork and improves overall productivity.
Offer budgets for employee development programs
If you think that setting aside a budget for employee development programs is just an unnecessary expense, it might be worth reconsidering. 61% of U.S. workers say that opportunities for training are an important reason to stay in their jobs.
This strategy is particularly effective when retaining a Chef. With the food industry constantly changing, Chefs understand the value of free training programs to stay relevant.
Although the upfront cost of paying for these programs may seem high, the investment pays off in the long run as your restaurant staff stay longer and become more skilled and committed to your establishment.
Improve your onboarding process
This is one of the simplest yet most commonly overlooked aspects of improving staff retention.
Proper onboarding is important to make sure your new hire is equipped with the skills and knowledge needed to meet expectations.
When onboarding a new employee, start with a warm welcome. Introduce them to your team and assign a senior staff member to guide them through processes, best practices and things to avoid.
Give them enough time to adjust instead of overwhelming them with too much information at once. The goal is to help them feel confident and supported in performing their role effectively.
Foster a supportive work environment
According to a law firm, the service industry has one of the highest rates of sexual harassment.
Given the nature of the hospitality industry — focused on keeping customers happy — restaurant workers, especially those in establishments serving alcohol, are particularly vulnerable to harassment.
Employers must educate staff on how to properly handle rude customers, helping them feel confident in enforcing strict rules and knowing their safety is a top priority.
In addition, managers on duty must be well-trained to respond appropriately when employees report sensitive incidents.
Turnover in the Restaurant Industry
Employee turnover refers to the number of employees who leave an organization over a certain period. It’s the opposite of employee retention, which is the number of people who remain in the organization during that same period.
The turnover rate in the leisure and hospitality industry is consistently high at 79%, compared to other industries such as professional and business service at 57%, construction at 54% and trade, transportation and utilities at 49%.
The cost of a high turnover
The high turnover rate in the restaurant industry results from a combination of a demanding work environment, limited growth opportunities and poor management.
It’s important to keep track of your turnover rate because it helps you with budgeting.
If you know that you have a high turnover rate, you’ll be able to properly allocate a budget for recruitment, manage your time effectively and ensure that the remaining staff’s workload is manageable, as they may experience stress while you hire and train new employees.
How to compute employee turnover rate
Use the formula below to compute your restaurant’s turnover rate.
Turnover Rate = (Staff who quit ÷ Average number of staff) × 100
For example, if three restaurant staff members quit and you have 20 employees, your turnover rate would be:
Turnover Rate = (3÷20) x 100 = 15%
How to compute employee retention rate
Understanding how to compute employee retention helps you gauge the effectiveness of your retention strategies.
To calculate employee retention, use the formula below:
Retention Rate = (Employees remained / Number of employees hired) x 100
For example, if you hired 50 employees and by the end of the year, only 25 remained, your retention rate would be:
Retention Rate = (25÷50) x 100 = 50%
The general rule of thumb for a good retention rate is between 70% and 85%, but this can vary depending on factors such as the type of restaurant, location and size of the team.
Other Ways To Increase Restaurant Retention Rates
Aside from the tips mentioned above, here are other ways you can increase your retention rate.
Have clear job descriptions
Having a clear list of duties and responsibilities sets expectations on both sides. If job descriptions are unclear, employees may feel a loss of purpose, leading to burnout as they try to manage multiple tasks without feeling a sense of accomplishment.
Vague job descriptions also make it difficult to track employee performance, leaving managers without a solid basis to evaluate progress or award bonuses. Clear job descriptions are essential for maintaining accountability and recognizing employees’ contributions.
Hire the right candidates
A structured interview process helps identify candidates who are a good fit, reducing turnover. This process begins with creating interview questions that fairly assess both hard and soft skills, along with evaluating cultural fit. Research is crucial to ensure that the questions align with the specific needs of the role.
To save time, OysterLink offers interview guides that can streamline the hiring process and help you select the right candidates.
Manage employee workload
Management needs to be aware of the workload employees are carrying, as it can easily lead to burnout.
Managers should understand how hard or how many hours employees need to work to reach specific goals. There also needs to be some consistency in the workload.
For example, if a Server working in a restaurant knows they will have to serve eight tables per shift, they can come to work without anxiety about how many tables they will need to serve that day to meet the quota.
Providing a sense of consistency and stability can reduce anxiety, contributing to a more positive work environment.
Written by Rea Gierran
With a background in Communication Arts, Rea’s expertise lies in content marketing and copywriting. Her published works can be seen on online news websites such as Rappler and Adobo magazine. Outside of her work, Rea takes on the role of a “momager” for Shiro, a TikTok dogfluencer.
Reviewed by Stefan Petrov
With over 10 years of experience as a writer and editor, Stefan has worked in the automotive, IT, health and hospitality industries. Familiar with Google Search Console and other SEO tools like Ahrefs and Semrush, Stefan uses his experience to create content that’s visually appealing to the user but also ranks in the SERPs.
