Looking for ways to find and keep employees? NRA leaders offer insights
Restaurant operators who are finding it harder to attract and retain good employees aren't imagining things. The demographics of the American workforce are changing in ways that make it particularly difficult for the restaurant industry to find and keep good help. The improving economy isn't making it any easier.
|Rob Gifford notes the population of younger workers will continue to decline.|
The number of restaurant industry jobs is projected to grow from 14.7 million in 2017 to 16.3 million in 2027, said Rob Gifford, executive vice president of the National Restaurant Association Educational Foundation, who discussed the issue during a panel at May's NRA show in Chicago. Every year, there are 600,000 positions that need to be filled – both new positions and openings caused by turnover.
Restaurant operators often feel helpless when it comes to filling those positions, said Gifford, who mentioned that a recent NRA survey found that labor issues top restaurateurs' list of concerns.
"We know that labor challenges now are intense in the industry," Gifford said during his session about attracting and retaining talent in a challenging environment. "Staffing is the biggest barrier right now to your success."
The nation's age demographics aren't helping matters for restaurants. Where the restaurant industry has historically relied on people 16-to-24 years of age to fill positions, that segment will decline by 2.8 million in 10 years.
"There's a demographic trough of younger workers," Gifford said. "You're competing for fewer young people than previously existed."
Given this reality, the only options are to recruit more from other age groups or be more successful recruiting younger employees.
To attract younger employees, it's important to recognize what motivates them to select an employer. Younger people are less motivated by salary than by the employer's commitment to training and development, Gifford said. Training and development opportunities are the leading motivators for younger employees.
"It conveys your interest in them and their futures," Gifford said. "They are hungry for training and development, and are often looking for it on their own."
When employees leave their jobs, it is usually on account of what they perceive as insufficient employer investment in these areas as opposed to financial compensation.
The cost of worker turnover
Employers should also consider the cost of employee turnover, according to Gifford, who said there was a direct correlation between employee turnover and sales. Companies with lower turnover than their competitors had 0.8 percent higher traffic whereas those with higher turnover than competitors had 1.4 percent lower traffic, according to one study.
Breaking it down by segment
Comparing different restaurant segments, quick serve restaurants had the highest turnover for both hourly employees and managers in 2016 – 150 percent and 55 percent respectively – while upscale casual and fine dining had the lowest turnover – 89 percent for hourly employees and 32 percent for upscale casual and fine dining. Fast casual and family dining had 119 percent turnover for hourly workers and 41 percent for managers, while casual dining establishments had 114 percent turnover for hourly employees and 33 percent for managers.
Gifford also provided numbers that gave hard costs to turnover. Replacing an hourly worker costs $2,004 on average, for example, while replacing a manager costs $13,523. This translates to $130,000 per year for a restaurant with 50 hourly employees.
Finding and keeping employees
The restaurant industry could do a better job of informing the public about how important it is to the economy. One out of every three jobs are in the industry, Gifford said, and 36 positions within the category pay an annual salary of $45,000 or more.
Too many people view a job in a restaurant as a temporary career move, he said. To attract better quality employees, the industry needs to find more workers who are looking for long-term employment.
Chip Romp, NRA senior director of training and quality, talked about the importance of having an "ambassador" to go out and find good employees. Employers should go to other retail establishments and look for the people on the "front lines" – the first ones to interact with customers.
Employees can help, too
Employee referral bonuses are also important, Romp said. He suggested rewarding an employee $50 for bringing in a new employee and another $250 after 90 days.
Don't wait for the referrals to contact you, Romp said. Go out and visit them in person.
He also said restaurants should hold "grand celebrations" to honor employee performance in some way. These events should involve the entire staff.
Most restaurants invest in promoting their food to customers but fail to invest in rewarding employees, he said.
As for retention, employee orientations are an important first step, according to Sara Anderson, NRA director of workforce development.
The orientation is the opportunity to describe the company culture and explain what is expected of the employee and why.
Hourly employees should be given four hours of introductory job training, she said.
"It has to be continuous and it has to go on," she said.
And don't forget the people who give the training. Management is responsible for training the trainers, Anderson said. As with hourly employees, the trainers should be formally recognized for their performance as leaders.
"Invest in the people that are training your staff," she said.
Culver's is a great example of a brand who understands training, Anderson said. The chain hosts ongoing training and special events to formally recognize employee performance.
Elliot Maras Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.