Restaurant Retention: 10 Best Ways to Retain Employees

4.5 million. That’s how many Americans voluntarily quit their jobs in November 2021! It’s a record-breaking number that’s a hard hit on industries that were already struggling with a national labor shortage amid the pandemic. Many managers are wondering how to retain employees, and for good reason.

Restaurant turnover rates were high even pre-pandemic. Of the 4.5 million workers who quit in November, 6.1% worked in the hospitality industry. 

So, in 2023, it’s time for you to face this problem head-on. And we want to help. That’s why, in this article, we’ll be looking at the best ways to retain employees by discussing: 

• Some of the top reasons why restaurant turnover rates are so high

• Ten employee retention plans to help you keep the employees you already have 

Let’s get right into it. 

Why is there a shortage of restaurant workers?

The economy is struggling, and yes, the folks who'd usually be serving up your favorite dishes do need jobs. So, what's up with all these "Help Wanted" signs and the revolving door of restaurant staff?

You might think it's a case of laziness or living off unemployment. No, it's more nuanced than that. Turns out, a lot of people are jumping ship for remote work, looking for better work-life balance and employee perks.

Here are some of the top reasons that restaurant turnover rates are so high:

Low wages and inadequate benefits

Low wages and inadequate benefits have long been a sticking point in the restaurant industry. Even pre-pandemic, there was a clamor for a $15/hour minimum wage, and that noise has only grown louder in the face of economic instability. And let's not even get started on the bare-bones benefits—many fast-food joints don't offer essentials like paid sick leave or health insurance.

Here's the kicker: while restaurant folks are fighting for basic healthcare and a living wage, other industries are rolling out the red carpet for top talent. We're talking competitive compensation, flexible schedules, and a whole menu of perks that make it hard for team members to resist jumping ship.

From LinkedIn to Forbes, studies are showing that effective employee retention strategies are not just about money; they're about employee engagement, professional development, and a healthy work-life balance.

So, it's no wonder employee turnover is high when new hires can find all these incentives in a new job elsewhere. With issues like these, it's not just about resignations; it's a full-blown attrition crisis.

Long working hours

Long working hours have become the norm in many eateries, especially with staffing levels at an all-time low. Restaurant workers are clocking in extra hours and pulling double shifts, sometimes out of necessity, other times because there's just no one else. Add to that the extra burden the pandemic went and placed on everyone—like caring for sick family members—and you've got a recipe for burnout.

But let's not forget, it's not just about the grind. The lack of work-life balance is a major red flag for top performers seeking new opportunities. Companies that get props on Gallup and LinkedIn offer not just good pay but also initiatives focused on employee well-being and flexible work options. It's a full package deal that prioritizes employee satisfaction and wellness.

Stressful work environment

The stressful environment in restaurants was further aggravated last year by public reactions to pandemic-related measures like mask mandates and social distancing. Instances of aggressive customers verbally or even physically assaulting workers were unfortunately not uncommon. Many employees understandably reached a breaking point, deciding that the job just wasn't worth it.

In contrast, last year saw human resource departments in other industries making strides in elevating employee morale and satisfaction. Mentorship initiatives, team-building activities, and recognition programs became standard practices to retain the best employees. These motivators not only improved the overall employee experience but also positively impacted employee retention rates.

Given the challenges of the past, it's hardly surprising that workers are departing restaurants for sectors where their well-being and teamwork are more highly valued.

Jobs in different industries

The allure of restaurant jobs has significantly waned, prompting workers to explore greener pastures in diverse fields like offices, education, and warehouses, among others. Last year alone, a staggering 15% of hourly workers made the leap to different industries, and another 33% are keen to follow suit.

The shift isn't merely about escaping the restaurant scene; it's also about seeking more fulfilling career paths. These alternative sectors often offer structured mentorship programs that help guide new hires and existing staff alike.

Moreover, there's a greater focus on upskilling, facilitated by constructive employee feedback. This creates an environment where workers can not only earn a paycheck but also grow professionally, thereby enriching their employment experience.

How to retain employees - 10 strategies

Given the complexities driving the restaurant labor shortage, doubling down on employee retention isn't just smart, it's essential. Effective retention strategies not only help you keep your current workforce but also make your establishment more attractive to prospective, high-quality employees.

So, let's dive into 10 actionable strategies to bolster employee retention in 2023:

1. Increase wages

Undoubtedly, higher wages are the top-of-mind desire for most workers at the moment. It's the most concrete way to signal to your team that you appreciate their efforts and want to retain them. While you may not be able to implement across-the-board raises immediately, targeted pay increases for your hardest-working employees can make a significant impact.

Here's a tip: consider involving mentors in the process of identifying which team members are truly excelling and deserving of a wage boost. This not only brings experienced perspectives into the decision but also emphasizes the importance of mentorship in your work culture.

Also, if you find yourself faced with a departing employee, utilize that opportunity to reassess the compensation structure and understand if wages were a factor in their decision to leave. This can offer invaluable insights for your retention strategies moving forward.

2. Offer better benefits

According to a 2019 survey, only 31% of restaurants offered health insurance to their employees. Offering insurance amid a global health crisis would definitely incentivize your workers to stay with you. 

But health insurance isn’t the only benefit that workers care about. You can also consider offering benefits like paid sick leave, stipends for child care, free meals, cash bonuses or education assistance programs. 

3. Show support for mental health

Workers in all industries are experiencing burnout right now. Your employees are no exception. So, acknowledge the stress they’re under.

Expose them to free or affordable mental health resources. Encourage breaks and transparency about what parts of the job are most mentally taxing. These things won’t erase the problems your employees face. But they will show them that you care. 

4. How to retain employees through flexible pay schedules

You’re now competing with the gig economy where workers can make and receive their money fast. To keep up, consider adopting technology like Tapcheck that allows employees to gain access to their earnings whenever they want. 

According to Tapcheck, giving your workers the option for on-demand pay can also lead to increased productivity, lower HR expenses and a boost in company profits.  

5. Create a safe workplace

In 2023, the emphasis has shifted from pandemic-specific measures to overall safety and well-being. Your employees need to feel safe and respected to continue working for you. Implement training programs that address conflict resolution and educate your team on how to manage difficult or unruly customers.

If difficult customers are a frequent issue, consider hiring a security guard or installing surveillance systems to add an extra layer of safety. Signage can also be used to remind customers of policies that protect both them and the staff, such as a zero-tolerance policy on harassment or violence. By taking these steps, you can create an environment that respects the dignity and safety of your employees.

6. Show appreciation

In challenging times within the service industry, showing genuine appreciation for your employees stands out as one of the best ways to retain employees. Knowing they are valued for their hard work can be the decisive factor that motivates staff to endure hardships and stay committed to their roles.

Publicly acknowledging your employees' contributions not only reinforces their significance to your organization but also serves as a morale booster for the entire team. While financial incentives like bonuses and raises are impactful, never underestimate the power of personalized gestures like a handwritten thank you card. These acts can often make a lasting impression, emphasizing that you genuinely care for and appreciate your team.

7. How to retain employees through strong company culture

Company culture plays an important role in keeping employees engaged at work. On top of that, a strong company culture can lead to increased productivity and overall job satisfaction. 

You can build a strong culture among workers by offering career development opportunities, regularly asking for feedback, and improving communication between management and staff. 

8. Reassess your onboarding process 

Your onboarding process can have a long-lasting impact on newly hired employees’ job performance and retention. In fact, according to one report, an efficient onboarding process can increase the retention rate by 82%.

So, after you’ve implemented the above strategies to retain your current employees, take time to also improve your onboarding process. Look for ways to ensure your workers achieve early success and feel confident in their roles. 

9. Improve your hiring process 

You won’t have to worry as much about new employees quitting if you’re clear on expectations and effectively assess cultural fit during the hiring process. Doing so will help you filter out applicants who don’t show potential to stay with you long-term.

But how can you achieve this? By being transparent about things like work responsibilities, compensation, and other benefits during the application and interview process. You should also make sure you’re asking restaurant interview questions that are relevant to your restaurant’s current working conditions. 

10. Identify the root causes during exit interviews 

When employees do quit, take advantage of the opportunity to find out the reasons why by strategically conducting exit interviews.

Of course, it may be too late to retain employees at this stage. But you can use the information you learn during these interviews to make relevant improvements for the employees that stay.

How to retain employees - final thoughts

Right now, there’s no way to know how long the restaurant labor shortage will last. But by proactively improving your retention strategies, you can reduce your turnover rate and avoid later being short-staffed. 

Try out the 10 tips we’ve shared in this post: 

1. Increase wages

2. Offer better benefits 

3. Show support for mental health

4. Offer flexible pay schedules 

5. Create a safe workplace 

6. Show appreciation

7. Strengthen the company culture 

8. Reassess your onboarding process

9. Improve your hiring process

10. Identify the root causes during exit interviews

And for more tips like these, be sure to also check out our recent posts on how to run a restaurant after the Covid-19 pandemic.