The restaurant turnover rate is one of the most important statistics you’ll ever calculate for your business. The simple calculation shows you the percentage of staff that will leave in a single year. Staff changes have enormous ramifications for business, from impacting customer/business relations to costing more in hiring processes.
When staff go, you understandably get shaken as a business. Hiring new staff can be lengthy, and all these stages cost your business. Plus, staff leaving abruptly can leave you in the lurch. Training new staff takes up valuable time and temporarily decreases your service quality. And we all know how unforgiving the restaurant industry can be.
Keeping as low a turnover rate as possible is really important. No matter how good your table management skills or inventory management are, you need happy staff. There are many ways to reduce employee turnover rates, starting with building awareness.
In this guide, we will look at all the factors that impact employee turnover rates in the restaurant industry. You’ll leave with an understanding of turnover time, how to reduce turnover, and average stats in the industry this year. With the correct information under your belt, you can seriously minimize staffing changes - boosting your business success and stability.
What Is Restaurant Turnover Rate?
We briefly covered what restaurant turnover rate is, but let’s clarify. The restaurant turnover rate is the number of employees leaving your workforce in a given period. This calculation is made on past data and usually over an annual period. Staff can ‘leave your workforce’ by quitting of their own accord or by being fired.
However, what the employee turnover rates often show are difficult working conditions. If you calculate your turnover rate higher than the national average, reflect on that and take action.
You use urnover rates in all sorts of industries across the board. You can use turnover rates in corporate jobs and physical work - the army has a notoriously high new recruit turnover. Calculating employee turnover rates is particularly important in naturally high-turnover rate industries - we’ll cover this more in the section below.
So while calculating turnover rate isn’t specific to the restaurant industry, it is a more widely practiced part.
Calculating your employee turnover rates correctly and paying attention to results can be a valuable tool. Unhappy workers can demand pay benefits and kick up a (usually justified) fuss. Or they can ‘silent quit,’ giving up on your business without vocalizing their unhappiness.
Keeping tabs on your turnover rate can help reduce these silent quitters and maintain a more stable workforce. And you can rechannel the more vocal unhappiness, fixing work conditions faster before you lose staff.
As you can see, turnover rates in the restaurant industry are vital to manage and calculate. If you want stable businesses with high profits, you need solid foundations from happy long-term staff.
Turnover Rate in Restaurant Industry Success: Why Does It Matter?
Why does the turnover rate in restaurant industry success matter? What part does it actually play? Well, the restaurant turnover rate entirely dictates the stability of your business. Picture a nice straight road versus a bumpy road with crater-like potholes and many blind bends. Which road do you think your car will go further on without damage?
A lower employee turnover rate makes your business journey easier, letting you achieve more. You can concentrate on going further - not dealing with potholes like weekly hiring sessions. Having a low turnover rate improves house operations.
Hiring new staff is costly. It costs to hire, and it costs to drop your optimal productivity during training periods. Hiring staff drains resources unnecessarily - be it detracting from time spent doing something like marketing or costing. If you can avoid these extra time and financial expenses, you can focus on growing your business. And everyone wants the chance to focus on making their business successful.
Furthermore, if your staff leave without warning, you risk not having anyone to cover shifts. This highly stressful scrambling for cover causes overworking existing staff - further decreasing their job satisfaction and risking losing them. It could also mean that you end up working their hours.
Neither of these options is sustainable or conducive to a successful long-term business plan.
Lowering your turnover rate in the restaurant industry is crucial in minimizing havoc and sticky situations. You will have fewer costs to factor in and a smoother ride to success. If you want to focus on achieving business goals, take action and pay attention to the turnover rate. Employee turnover rates really do matter.
What Is the Average Restaurant Turnover Rate?
There is a simple answer to the question of the average restaurant turnover rate and a complex one. The simple answer is around 75%. This means that the average restaurant loses 75% of its staff in a single year. Wow. As you are probably thinking, this is a ridiculously high statistic. And quite daunting for anyone starting out in the restaurant industry. A 75% turnover rate is a considerable amount of your staff to replace in a year’s turnover time.
As a second kicker, the average retention rate of managers in the restaurant industry is just 25%. This means a decent chunk of lost staff will likely be management - who take much longer to train and replace. A pretty dreary statistic, right? It’s easy to see why ‘80% of restaurants fail within the first five years of opening’.
The rehiring process is relentless. Frankly, we can understand the high burnout rates. It takes excellent HR and management skills to navigate turnover without displacing stress onto other employees or yourself.
So now that negative bit is out of the way, what is a reasonable turnover rate in the restaurant industry? As a general rule, anything less than 50% is good. This means that almost 50% of your staff have chosen to stay with you for a time period of a year. Even if they leave after this year, this is still an excellent turnover time.
Remember, lots of hospitality workers want temporary contracts anyway. For example, the majority of university students search for hospitality work. For this demographic of employees, time attendance is an important consideration. Some employees may return to uni and work during the holidays. These time periods of non-employment don’t count as quitting.
How To Calculate Restaurant Turnover Rate
Okay, now you know more about employee turnover rates, how do you do the calculations? This is how to calculate the restaurant turnover rate for your business. We’ll run over the simple steps to get your turnover rate.
- Choose a time period. First, choose a time period. This can be anything from a month to a year, but restaurants typically calculate annually.
- Add up your total number of employees in that time period. Add up the total number of employees you had in the time period of your choice. If you are working out your total staff turnover, include everyone - from pot wash to the front of the house. While if you’re just calculating the turnover rate in one role, like the front of the house, total up specific groups.
- Add up your number of employees who left in that time period. Next, add up the employees that left in this same time period. This can be due to quitting or firing.
- Divide the number of employees who left by the total number of employees. Divide the number of employees left by the total number of employees in that period. Your answer will be a decimal number - for instance, 0.56 or 0.72.
- Times the result by 100 to get the percentage turnover rate
To get your final answer and percentage turnover rate, multiply your decimal number by 100. For example, 0.56 turns to 56%, and 0.72 turns to 72%.
The lower your turnover rate percentage, the better. As you know, reasonable employee turnover rates are around 50%. However, the average turnover rate in the restaurant industry is approximately 75%. Don’t beat yourself up if you score higher on the scale, but definitely look into lowering your rate. Improving your score will improve your business success.
How To Keep a Low Restaurant Turnover Rate, 2023
Regarding employee turnover rates, being proactive is the best way forward. Taking proactive action can help reduce your turnover rate before it begins seriously impacting your business. You can avoid burning yourself out by reducing the turnover rate and protecting workplace culture. Ready to make a change? These are the best ways to keep a low restaurant turnover rate in 2023.
1. Analyze the Meaning Behind Turnover Rates
The first step is to analyze the meaning behind your restaurant turnover rate. You need to calculate and then pay attention to your turnover rate. To do this, track the major events during the turnover time period. Were you particularly understaffed at this time? Were shifts pushed onto other employees, causing burnout? Did you have many events that meant back-to-back late nights and unsociable hours? Did you have to cancel shifts in quiet periods? These are all critical questions to ask yourself.
House OperationsAnd while reflection is key, sometimes it pays to get the answer straight from the horse’s mouth. Hold leaving interviews with staff where possible, ideally with a neutral figure like HR. This will help you establish the leading cause of your staff turnover rate straight from the individuals. You can calculate your turnover rate in minutes, but the analysis should take hours.
2. Have a Compensation and Benefits Program
Generally, the leading causes of restaurant turnover rate are a high-pressure environment, unhealthy staff relations, and burnout. The best way to overcome this is by offering compensation and incentive programs. Recognize your staff’s hard work and success and offer rewards to keep motivation high.
Don’t make your staff demand pay benefits themselves. You can also incorporate extra paid leave into reducing burnout. For example, someone working three days late back-to-back gets a day’s paid leave.
Other ideas include getting great tips, free meals on shift, and having regular, fun training sessions. If you get a new product in, run a tasting session. If you serve wines, ensure your staff can taste wine with a sommelier. Reward and provide opportunities to build confidence and feelings of achievement.
3. Be Careful in Your Hiring Process
Be careful when hiring. You need to ensure you get the right person for the job - not having to fire them weeks later. Or have them quit when the job and company culture don’t fit their expectations. It is worth taking your time instead of repeating it again in a month or two.
And most of all, take your time with your hiring process by always having adequate staff numbers. Keeping track of temporary contracts and open communication about staff satisfaction levels will help.
Simple Steps To Improve Your Restaurant Turnover Rate
The most simple steps you can take to lower and improve your restaurant turnover rate starts with staff communication. If you can invest in HR, then do. And if you can’t invest in a formal HR, we suggest hosting regular staff feedback sessions and check-ins. The best way to keep your staff is to help them feel heard and respected.
Above all, reduce staff burnout risks at all costs. You can do this by encouraging paid leave-taking and enforcing breaks between shifts. During hiring, don’t be afraid to directly address whether someone is also looking for a temporary contract. Let them know that temporary contracts are fine and keep communication open so you can hire again soon. Communication is the most simple step to reducing employee turnover rates.
Do you want some extra help with calculating your restaurant turnover rate? At Beambox, we are always happy to assist you with managing and improving your business. As experts in WiFi marketing and restaurants, we can aid you in your journey to business success.
Beambox offers the best all-in-one WiFi marketing platform. We utilize a multi-approach to connect, attract, and keep customers. Start your Beambox free trial today, and let us help you manage your restaurant turnover rate.
Get Started With Free WiFi Marketing
Beambox helps businesses like yours grow with data capture, marketing automation and reputation management.
Sign up for 30 days free