No one is happy when turnover rates spike. For staffing, a high turnover means more money spent on sourcing, qualifying, and hiring new staff members. This cost is one thing, but paying for something that you aren’t getting is another entirely. According to a study from Deloitte, it now takes upwards of 52 days on average to fill an opening. For an industry with high turnover rates and low predictability, this could bring a restaurant’s productivity to a grinding halt.
Voluntary turnover usually comes without warning, making it more difficult to find a replacement in this slim time frame. Not only that, but voluntary turnover can be extremely detrimental to employee morale.
Restaurant operators pay twofold from the consequences of low-notice turnover. On one hand, being understaffed is costly and inefficient. On the other, your customers lose out on a familiar face, which is a big, bright, attention-demanding red flag. Customer service is the foundation of the restaurant industry. Running a high-turnover restaurant where employees come and go makes it difficult to implement an effective customer service strategy where the customer bonds with your staff. Additionally, if you have holes in your workforce and your staff has to work extra shifts/longer hours to compensate, the quality of your customer service may take a hit.
When the person who a customer does business with is changing every few weeks or months, it doesn’t allow for the customer to form a deeper business relationship with any of these company representatives. Effectively, this keeps the customer from forming a deeper relationship with your company. This means that all it takes is a slightly lower price or a more convenient drive for your customer to start frequenting a different restaurant.
By reinforcing your employee retention strategy, you can create the opportunity for the customer/employee bond to form and actually experience an increase in customer retention.
Factoring Turnover into Retention
Your restaurant staff is responsible for making excellent first impressions with new customers and nurturing that relationship over subsequent visits.
For most of your customers, the face of your company is the person who your customers do business with, your staff. If your company is turnover-inclined in front of house positions, no matter how likable these new representatives are, they will still need to start from square one with gaining the trust of your customers.
With so many options in today’s food market, your restaurant may face new competitors each year, who provide the same solution as you do, for the same price or lower. Such a high degree of market saturation is likely the cause of how a 5% increase in customer retention can increase overall profits between 25% and 95%.
It’s never been more important for restaurants to evaluate their customer satisfaction strategy and focus on how your staff can get customers to keep coming back. Unless you establish your business as a leader in your community, you are at risk at blending in with the crowd.
4 Tips for Increasing Retention
Bottom line: if you work on improving your customer retention, customer retention will increase proportionately. If you can identify some of the causes of turnover at your company and promote and focus on making employees happy, you will be able to reverse any turnover trend. This increased employee retention will give your customers a better opportunity to bond with these employees, strengthening customer relationships and increasing customer retention. Four tips for increasing employee retention are:
Communicate Business Strategies: Transparent leadership is key for involving your employees in decision making. Great time for feedback!
Conduct Exit Interviews: Learn why they are leaving. Use this time to internalize their issues to better your restaurant.
Recognize Outstanding Service: Feel free to go beyond a pat on the back. Make announcements to all of your employees when you see something exemplary.
Hold Monthly Employee One on One's: Field quick 10 minute meetings and check in with your employees once a month.
Many job positions within a restaurant will always remain a “means to an end.” Whether you’re receiving applications from teens looking for a summer job or post-graduates working part time while they take classes, few applicants will be looking to turn that position as a server into a career. All of this mind, there a many steps you can take to establishing a culture that supports long-term employment. The first step, of course, is to solidify your employee retention strategy. Building out an effective employee management system will do the majority of the heavy lifting for you. In fact, there are plenty of neat tech solutions at your disposal to accomplish that goal.
Between the benefits of increased employee retention and better customer relationships, the link between employee retention and customer retention is undeniable. Today’s restaurateurs don’t need to settle for high turnover. It’s up to them to go back to the drawing board and figure out how to create a better environment for their employees.