Article

The Revolving Door: Avoiding Turnover in the Current Restaurant Labor Market

When COVID-19 had just begun to sweep across the country in February 2020,restaurants employed more than 15 million people, represented 10% of the workforce, and was the second-largest private employer in the U.S. More than 100,000 units permanently shuttered, according to the National Restaurant Association. And many others reduced their workforce as on-premises dining was curtailed.

You can always find people who need a job and are willing to work in your restaurant. That said, they need to be hired and trained, which costs money and time. In the best of times, high staff turnover went hand-in-hand with running a restaurant. It was expensive five years ago, and it is expensive now, particularly as you fight for margins and guest traffic.

Millions of restaurant workers found themselves out of work or seeking employment in other industries. According to the Bureau of Labor Statistics, one in four U.S. jobs lost during the pandemic have been in restaurants and bars. Sure, the Paycheck Protection Program (PPP) was designed to help operators continue to employ staff. The cruel irony of the initiative is you don't need as many staff if your restaurant isn't allowed to serve guests on-premises.

A lot of people in the restaurant business lost their jobs in 2020. And those who didn't are wondering if it is a safe and secure career path, particularly as the pandemic continues. If your business managed to weather the pandemic, you still need staff.

In fact, more than ever, you need quality reliable staff. The wiggle room for error has never been smaller. Many guests now cautiously take their seats at full-service concepts and will question why they missed dining out if the experience is less than optimal. Your delivery and take-away customers might not discover your mistakes until they are in their kitchen and your ability to fix the problems is limited.

People who need people are supposed to be the luckiest people in the world -- at least according to an old song made popular by Barbra Streisand. Well, if you run a restaurant, you need people, in spite of industry soothsayers predicting a brave new world in which robots replace, well, everyone. And you might not feel like the luckiest person in the world if you are facing a labor crunch and staff that are coming and going so quickly you wonder if you should install a revolving door. In this article, we look at ways to hang on to the best and brightest. Again, you need them more than ever.

For Love and Money

Restaurant work was never easy. But it can be fun. And it could be lucrative for those who like working around food and serving the public. Moreover, it was relatively safe and secure if you were employed by a popular, reputable concept.

As you well know, the business has changed. Employees have legitimate safety and job security concerns about restaurant work, even with the availability of promising vaccines. As an independent operator, you are competing with Amazon, Target and supermarket chains, which likely offer competitive, if not better, wages and benefits.

Even where restaurants were allowed to open for on-premises dining with limited seating, in most cases, safety protocols had been instituted, barriers erected, sanitation procedures added, seating capacity diminished, indoor seating forbidden altogether and -- possibly most damaging of all -- employees either afraid or unable to return to work. Others are unable to return to work because they have to stay home with young children who are distance-learning.

The pandemic "has created chaos for foodservice businesses, as many employees are fearful of workplace transmission as well as customer interaction," says Arlene Spiegel, a New York City-based restaurant consultant. "They are concerned if the workplace is health-compliant with safety, sanitation and personal protection equipment supplies."

Employees are also being asked to perform tasks outside the scope of their original duties, Spiegel adds, and simply may not want to. These include premises sanitation responsibilities and the kitchen and service cross-training required as delivery and takeout business is ramped up. Says Spiegel, "Employers have to go above and beyond normal communications to assure employees that the workplace is safe. They also need to be flexible with hours and compensation if need be."

Now pile these concerns on top of a less-than-optimal business culture.

Former restaurant employees might still enjoy working in the kitchen or serving guests more than restocking shelves. Cooks want to cook. Servers want to serve. But if they are returning to angry owners, stressed-out GMs, and a sullen food assembly line, that warehouse assistant job at Amazon starts looking better and better.

With the craziness of the pandemic and recent social unrest, in addition to the challenges of keeping your proverbial lights on, it isn't easy for you to "feel the love". No matter, say successful operators who stress owners and managers need to express appreciation and loyalty, especially now.

Not every employee will appreciate it. But it could win over those who truly enjoy restaurant work and are just looking for a reason to hang in there with you. And if few if any of your staff have loyalty during the pandemic, they likely didn't have much prior to the pandemic. It might warrant an overhaul of your culture and management, beginning with your GM who sets the tone for the operation.

The culture of the company is the single most important factor in attracting and keeping the best people … a culture of inclusiveness and respect, and one that provides growth opportunities, attracts and keeps employees happy.

Frank Mendoza, founding owner of El Sushi Loco, a Southern California Mexican sushi concept, has a people-first bias. He discovered his staff was so loyal when the pandemic hit, they agreed to come back at $13 an hour, the minimum wage in California, rather than the $18-$20 some were making pre-pandemic. Mendoza told the employees he'd increase salaries when the restaurant began to make money; in the meantime, he says he's been able to give employees bonuses based on prime cost savings.

Last November, Mendoza used PPP money for holiday bonuses of $100 each "just to give employees the hope they needed," says Mendoza. He's also offering no-interest loans of up to $1,500 to employees who are struggling to pay the rent and other bills. Mendoza sees generosity as push back to the despair caused by the pandemic.

"COVID-19 is taking things from us, so to counter that we need to give," says Mendoza. "Employees need leadership and hope," he says.

For Brooks Bassler, founding owner of Houston-based BB's Café, what has not changed in the wake of the pandemic is attention to staff training, particularly on takeout service best practices. The shift to off-premises services requires an optimal off-premises guest experience. Restaurant work is difficult under the best circumstances, and with big-box retailers and Amazon paying $15/hour or more for entry-level workers, keeping the best and brightest staff is a challenge for independent restaurateurs. Bassler tries to offset the increased demands on staff "with gratitude and positive recognition."

"The culture of the company is the single most important factor in attracting and keeping the best people," Spiegel explains. "A culture of inclusiveness and respect, and one that provides growth opportunities, attracts and keeps employees happy."

If you have loyal and reliable staff, when a position becomes available, the first place to look is inside. "Someone already employed in the organization may be capable of and agreeable to filling the spot. This is the best outcome, as all parties have proven themselves and are willing to commit to each other's success."

Employees need to buy into the company's vision and mission, adds Kountry Kitchen's Theresa Adams, "not a dumb mission like everyone else, but something that is special about what they are working toward. If employees know what you stand for and feel like they are a part of something special, it holds things together when things get tough."

As for you, the owner, if you don't know what makes your restaurant special to your guests, you won't be able to communicate it to your staff. And if your vision and mission doesn't include a clear statement of values, you might have a real problem. Particularly younger employees want to associate with an organization that has a larger purpose than simply providing a certain ambience, cuisine, and making money.

"Our priorities have gotten more honed in on integrity and commitment to our core values and mission," says New Jersey-based restaurateur Marilyn Schlossbach. "Every business has its own set of values, and we want to prioritize any new staff coming in on their commitment to ours. Our guests' needs will have shifted after COVID, and we need to be patient with each other as we try to navigate." Those needs include good cheer to help raise their spirits during a difficult time, value for their dining dollar, and a consistently good experience whether they dine in or take out.

Too often restaurateurs think in terms of a workforce and lose sight of the individuals who comprise it. If you treat your staff as warm bodies to fill positions, there is no reason they should feel like anything else but a fungible commodity.

"I think at some level there is a mindset that staff, some staff, is disposable," says Ken Schwartz, principal of Foodservice Design + Consulting in Tampa, Florida. Schwartz has found, "there will always be someone to fill a vacated position."

Says Schwartz, "This is a terrible perspective and approach to management. We are referring to people -- people who need the job. I think staff members should be celebrated, as each is a key element to the success of the operation."

Hire for Attitude

One of the glaring weakness of many independent operators, even in the best of times, is sloppy hiring. In fairness to busy restaurant owners and managers, when you need a new cook, dishwasher or server, you often don't have a great deal of time to find and select candidates. Unfortunately, poor hiring creates a vicious cycle of turnover. It warrants taking more care in hiring.

The adage hire for attitude and train for skill applies in the restaurant business, as much as any other business. Cutting turnover begins with "hiring the right fit," says Shanny Covey, owner and general manager of Robin's Restaurant in Cambria, California. "Pay attention to the red flags and don't dismiss them; they are probably right. Hire slow, fire fast."

Employers should ask about potential hires' career plans and both short- and long-term goals. The leadership team must develop a list of candidate criteria based on competence, temperament, work history, references and shared values. The applicant should be interviewed several times, by different department representatives, and provide feedback, according to Spiegel.

Theresa Adams, who along with her husband Mike, purchased the Kountry Kitchen in Ramona, California in August of 2010, use the initial interview to get personal with their people. "We ask about family, their hobbies, what their history in jobs has been, what their most difficult manager was, worst job, etc. We try to get a feel for who they are and what to expect when they come to work."

Of course, you need to be careful not to ask questions that might be perceived as discriminatory, such as family planning details that might suggest you would avoid hiring a woman who hopes to have children in the near future, which suggests discrimination based on the prospect of pregnancy.

Once a candidate is hired, the best way to ensure success may be with a robust on-boarding process that includes providing a mentor, scheduled training, and listening closely to the person's needs and suggestions, says Spiegel. "A 30- day probation period written in the employment agreement will provide an opportunity for a backdoor if it doesn't work out." Very often it will be as clear to the employee as it is to management when the job is not a good fit.

All businesses should have a try-out or probationary period, says Schwartz. "It indicates to the new hire that this is only temporary until they prove themselves worthy. I think this is a terrific incentive."

Four Categories of Employees

Workers who tend to stay with employers fit into four general groups, categorized by their motives and the length of time they remain with you. While sweeping generalizations are risky, you might find this approach valuable to attempt to categorize your staff into one of these groups to predict their commitment to, and career longevity with, your restaurant, and what you can do to foster it.

Some of your staff might change categories with time, but the advantage to this mindset is being realistic about what you have to work with and what kind of team you would like to assemble and keep in the long run.

Wanderers. These are people who traditionally come and go. They are transients with short-term goals, usually financial, and they will work only as long as necessary to get the money for their next step. You are most likely to see them in hourly positions because foodservice positions are particularly attractive to this group. Wanderers may be high school or college students, military personnel, housewives or moonlighters with a mission. They may be good workers, but they are not actively looking for a foodservice career. If you hire them, expect to lose them when their immediate needs have been met.

Fillers. These are workers who are basically unhappy but stay anyway. These folks don't make waves, have lost inter-est in advancement, and produce just enough to keep from getting fired. They have essentially retired on the job. In a depressed economy, more managers are likely to fall into this category. They are dissatisfied with what they are doing and are searching around for something better, but stay with you because they see few other options at the moment.

Achievers. These are the people who enjoy the job and work for the challenge, not the money. These workers are motivated by the opportunity to grow. They get restless and leave when their personal and professional development stagnates. Achievers will demand your best efforts and can make a valuable contribution to your operation for as long as you can keep them interested.

Keepers. These workers stay because they like their work and consider themselves a part of the company. If you treat them right, they will brighten your day, make your guests happy, and build your bottom line. Solid, successful organizations are built from keepers.

The long-term success of your company will certainly be built on the achievers and the keepers, some of whom can slide into the category of fillers if you get complacent and start taking your business for granted. Wanderers fill in the gaps, take up the seasonal slack, and bring some new perspectives to the operation.

At any given time, your organization will have people in all these categories. It will help your composure to have an idea of who is who. While you must be careful of stereo- typing, having some understanding of the motives of each person on your staff can be helpful.

For example, you would not typically expect wanderers to show much commitment to long-term projects. To enlist their support, you must show them how the success of the project will benefit them in their future pursuits outside the company. Fillers are unlikely to be interested in any sort of change or challenge. When you know who has retired on the job, you should not waste time getting upset at their lack of response and start to gently move them out of the organization.

Be sure to keep challenging the achievers by giving them new projects and responsibilities. The keepers just need your sincere appreciation and an increasing role in the decision-making process.

"I Don't Know What's Wrong with These Kids Today…"

Leave that attitude at home. You need to appreciate and respect cultural and generational differences among employees. We live in a diverse society. Consider restaurateurs who exclaim their delight over foreign-born first-generation U.S. citizen employees who demonstrate impeccable work ethics as they try to become economically established. In the same breath, the same operators will complain about teens and 20-somethings who don't seem to take rules seriously, including showing up on time. And then they will complain about the older employee who seems to be resistant to learning how to do things a new way, right after they complain how their wonderful hard-working first-generation employee created a major headache due to a breakdown in communication-based on a language barrier.

None of your staff is perfect. But they are your staff.

Bear in mind, younger employees lack experience and might require life skill coaching their parents didn't have interest or time to teach. Hard-working first-generation employees might need coaching on cultural norms in the restaurant, including interacting with team members. There may also be language barriers.

Mindful communication and patience are the gold standard for successful management today. They will help you foster enthusiasm of reliable workers and encourage inexperienced workers to become more disciplined by making every staff member feel like a member of the team. "Just do as I say" management breeds mechanistic performance at best -- and resentment at worst.

No doubt, you need rules and standards, and you need to be clear that certain rules are critical for you to remain in business. You might have to explain why they are important and how it can hurt the business if they are not followed.

Staff also needs to know the consequences of not following rules. Your regular staff meetings are a good place to do this. Don't assume any of your staff understand the importance of your rules, ranging from showing up on time to sexual harassment policy, even if you shake your head wondering how someone might not be able to appreciate why it creates problems when they arrive at work 15 minutes late. Again, the probationary period after hiring will make it easier for you to part ways with employees who just don't "get it".

Bob McCafferty and his wife Jodi own the North Country Brewing Company in Slippery Rock, as well as the North Country Brew Pub and the Harmony Inn in Harmony, Pennsylvania. North Country maintains a strict call-off policy, with each employee responsible for finding his own shift replacement with at least two hours' notice that they won't be available. Thus far it has been followed "pretty well," says McCafferty. "Not that it is a good strategy, but we do have more part-time people employed than ever before so that we have a call base."

A sense of personal ownership in the success of the business breeds accountability. A sure way to form lasting bonds with employees is to treat them like leaders, says Schlossbach. "Whatever their role is, it creates a bond of ownership and a passion to succeed," she continues, adding, "Be honest and upfront and consistent in your communication; empower them to be part of the solutions."

Managing turnover also means being "honest in what you know and what you don't," says Schlossbach, noting "the restaurant business landscape can change weekly in the wake of the pandemic, and this is frustrating to your team." She advises, "Let them know information as it unfolds, and keep them in the loop on ever-changing local, state, and federal guidelines so they know you have their best interest at heart." Particularly younger workers value management honesty and transparency.

And don't forget that many employees are likely under tremendous stress in this environment -- just as you are. We all need to pay bills. As the pandemic rages, most of us are concerned about our own health or the health of family and friends.

Kountry Kitchen's Adams says she appreciates most of her crew does not work enough hours to suit them. "Everyone is fearful of losing their jobs with the (California Governor Gavin) Newsom shutdown. People are not getting enough hours to make ends meet, so they look for other opportunities."

Your staff might be juggling more than one job or child-care responsibilities with the schools shut down for classroom attendance. Says Adams, "We constantly have to try and encourage them." Offering them some flexibility might win loyalty, as they cannot be assured other employers will be as understanding.

Five Steps to Better Retention

Restaurant consultant Rudy Miick, principal of The Miick Companies in Boulder, Colorado, calls turnover "absolutely an outcome-driven by poor management and poor leadership, which are symptoms of loose/poorly-defined culture -- which creates loose/poorly defined brand execution."

It's a problem he has been successful in solving. "Our clients, regardless of segment, location or check average, are consistently running 78% to 82% retention -- no BS," says Miick. "There's no excuse for having 95% turnover. Period. Leaders, managers and companies bring this on themselves with inconsistent behaviors."

Miick identifies five key steps in reducing turnover, all of which support a number of the ideas already covered in this article:

1. Define the cultural norms, purpose and values of the company upfront in ads and storytelling prior to hiring.
2. From initial contact with job candidates through the interview, whether the process is online or in person, you should model your business's commitments to its culture and expected behavior. In other words, "walk the walk".
3. From employee orientation through the training process, again, "walk the walk". Otherwise, the values you profess to be so important to your business will seem like nothing more than "lip service".
4. From training through the work shifts themselves feedback should be "constant and based on data rather than compliments and criticism."
5. Catch staff doing things right. "Coach to the positive instead of finding fault, meaning instead of 'Don't do that,' try 'Here's what I need you to do.'"

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