5 Reasons Restaurants Have High Turnover Rates

5 Reasons Restaurants Have High Turnover Rates

The restaurant industry, much like the retail industry, is notorious for high turnover rates. For some, it may seem like a revolving door when it comes to hiring new employees. The cost of regularly training new employees can add up overtime. Not to mention, it can be a real pain to have employees drop off the schedule at the last minute and just hope that other employees can pick up their shifts.

According to data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLTS) program, the overall turnover rate in the restaurants-and-accommodations sector was 66.3 percent in 2014, and it continues to rise as the years progress.

While these statistics still aren’t as startling as the over 80% turnover rate that resulted after the economic downturn of 2007, the fact of the matter is that any significantly high turnover rate can be harmful to a restaurant’s bottom line. There are many factors that play into restaurant turnover, and while some are based on economic causes, others may be based on employee satisfaction.

Here are 5 of the biggest reasons why the restaurant industry experiences higher turnover rates than others.

1. Transient Nature of the Workforce

For retail and restaurant industries in particular, there’s a certain mindset that goes with the occupation: the position is only temporary. In many instances, even management personnel use this notion to their advantage to build up their workforce during busy seasons. As such, the sheer transient nature of the industry means that employees will naturally come and go simply because it’s acceptable to do so.

2. Long Hours/Little Compensation

At the root of the restaurant industry may lie the problem, which is that many restaurant employees are expected to work long shifts but are not compensated enough to justify those hours. Sure, waiters and waitresses may be tipped well, but the majority of their compensation relies on the customer (who is not legally obligated to tip them). Little to no benefits combined with lower pay than other jobs results in disloyal employees. When employees don’t feel a sense of connection to their job, turnover rates surge.

3. Lack of Advancement

This problem isn’t limited to just the restaurant industry. Management and senior level positions are much harder to come by than lower-level positions, like hostesses, busboys, and waiters. Those who work in upper-level positions, like managers, directors, and owners, tend to make their jobs their career. The transient nature of the lower-level employees means that many don’t stick around long enough to advance in the ranks. This lack of advancement only compounds the high turnover rate even more.

4. Type of Restaurant

Indeed, different types of restaurants have different turnover rates, and the fast food industry ranks number 1 for the highest rates. As we move through casual dining and into fine dining, the turnover rates decrease dramatically, but the restaurant tends to be more reliant on the economic status of their patrons as well. Higher-paying patrons yield higher profits, and these profits tend to trickle down to employees (think: higher tips too). More pay gives employees more reason to stick around a little longer!

5. Poor Communication

This is another influencer that can be felt across all industries. For restaurants who work in fast-paced conditions, it can be much harder to enforce effective communication between upper-management and employees. Employees want to be heard and feel that their opinions matter to their supervisors. When employees feel appreciated, their loyalty to your restaurant only increases.

At the end of the day, you simply cannot control the conditions and perceptions surrounding the restaurant industry. Chances are, the industry will always have higher than average turnover rates, especially with lower-level employees. However, the most impactful thing you can do to lessen turnover rates is listen to your employees. Hear what they have to say. Work around their school and personal schedules. Ask them how they’re doing. Ask them if there’s anything they would change about their work conditions, and if there is, act on it (if necessary). Doing so will help repair the disconnect between employees and your restaurant.

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Alexis Hesseltine

Alexis Hesseltine

Marketing & Media Relations Coordinator at QSROnline.com
Alexis is the Marketing and Media Relations Coordinator at QSROnline. She’s responsible for content strategy, obtaining partnerships with industry leaders, and offering restaurateurs an excellent back-office system. Her passions are helping restaurants succeed and spending time with her French Bulldog, Winnie.
Alexis Hesseltine