Updated: Jun 21, 2020
Why do employees quit in the restaurant industry?
If you have been in this business for more than a day, you know that this is one of the toughest issues that we deal with and you already knew the problem at hand, it takes a long time to get somebody up to speed. We don't have enough people, especially in this field where applicants are not necessarily of good quality, and sooner or later they will quit.
To be honest, most restaurant employees just quit today, and two days later, they get another job somewhere else so this is a huge problem we have and the truth is, this problem will never go away. It has been forever and it may continue being there. In other words, this is an industry with a high rate of turn-over.
The reason we are talking about this is that if we do not fully understand why our people quit, you are going to get confused. Always remember this, do not take things personally. People quit. Some of the external factors that are not even in our control are the reasons why people resign sooner or later. You need to have a strategy to battle each of those reasons and gradually reduced the percentage of people who quit or increase how long they stay, their retention rate.
People quit constantly, this is a sad reality in the restaurant business. The following could explain the reasons why it is rampant in this industry:
1. External factors
- the first reason why people quit is external factors. You may have done everything to keep your people happy, however, there will always be a percentage of them who will resign due to external factors that are not even in our control. These external factors may include the following:
😩Low grades - we do hire a lot of high schoolers in our pizzeria and they over-commit because they don't know how to manage school and work at the same time. Some of them are going to over-commit because, for instance, they want a new phone or a car and so they would want to work 30 hours to save up more money. We know that it is almost impossible for them to keep up with their studies because 30 hours of work isn't a joke, but they would insist that they need more hours. They would work for those hours for a few weeks but their academic grades would gradually go down, and consequently, their parents would also pull them out of work. That happens often.
😩A shift in priorities - it happens that they are no longer interested in the restaurant. They are like "Oh, I want to go somewhere else.'' It is no longer a priority for them to work for your restaurant.
😩Personal reasons - a lot of them are going to leave and will say "because of personal reasons", and sometimes you will never find out what that means. Some of them have reasons like, parents are getting divorced or they are depressed, etc. It is the category of personal reasons you may never be able to identify and solve because it's "too personal".
😩They are relocating - they may be moving to somewhere else. This sadly happens to us frequently since we live in a military town and people need to relocate. Sometimes, we may have this team member who is really good and for whatever reason, their family is moving to another place they just quit and there's nothing you can do about that.
😩Graduation - whether it is from high school or from college if you do hire folks who are students, eventually they graduate. When this happens, it goes back to shifting priorities since they are no longer interested in working at a restaurant.
😩Health issues - it just happens that a team member may have a health issue and they can no longer work for you. And we all know that if someone's health is at risk, there's nothing we can do but to let that person go.
So what to do about these external factors?
Nothing! You can not do anything about it. It is going to happen at some point. However, the only thing that you can do is to conduct very frequent pulse meetings so you know they are quitting sooner or later and you can come up with a contingency plan. As a leader of an organization, you need to be checking people's pulse and you need to be smelling in the air if they are thinking about quitting or slightly getting disengaged.
You can discern by knowing your people, if you know your people, it is actually not difficult to do that. And you must be doing that so you can come up with a contingency plan, the time to hire somebody else. To replace a person isn't when they put in their resignation in two weeks, that is too late by then to do that and you are going to suffer, you are going to have a lot of stress so you always have that contingency plan and the time to replace somebody is before they leave because you are already anticipating, they are going to leave, and you are going to hire somebody to take that position, reduce that person's hours gradually and increase this person's hours, and things go seamless.
2. Poor compensation and benefits
- this is a very hard topic to talk about. Sadly, if you have a local restaurant, sometimes we are not able to compete with the "big guys" across the street and that's a fact. For instance, Walmart started hiring like a minimum of $9 an hour, now its minimum is $12 an hour. They don't have enough people and as the economy gets better and better, this is turning out to be a severe problem for small businesses like us. The Chick Fil A which is in our strip mall, they pay $12 per hour for their full time.
We, to be honest, are not able to pay people that much, we do for our managers and team leaders but we can't hire them at $12 right away. If you hire them at $12, you give them a raise over and over, and you know where we're going, right? However, there are tips for you to battle this problem that is going to allow you pay your people more because we need to pay our people fairly or you will be left with C players, those people who nobody is going to hire:
👊Be informed and research - you need to be well-informed, do your due diligence and research. You need to look up and go to, for instance, Snagajob.com and other different websites where people are looking for jobs, or whatever you have on your job postings, look up who else is offering a similar job or position to what you are offering and know how much they pay. It happens when you have a job posting and you don't get anybody to apply for it, so you need to get a hint, there must be a reason for that and you want to check on that, right? Maybe someone else is paying more for the same position, so at least be aware of that. If you are not aware and you are being ignorant, that is not good for your business.
👊Increase your prices - for local restaurants, it is recommended to periodically increase your prices at least every six months. You must have a system in place where you gradually raise your prices. You don't have enough money, then increase your prices, it can be a small percentage for all the items in your menu or a dollar amount for a specific dish. Every year, you need to increase your prices and one of the main reasons for this is for you to pay your people better.
👊Simplify operations - what does simplifying operations can do to compensate people more and how is that related to retention rate? Here's what happens when someone gets hired, for instance, in Chick Fil A or McDonald's, within a day, they already can handle their operations. If your operations are too complicated and if you will not incorporate some batching or some specific training in it and different things like that, it's going to take you a long time to train up people and get them up to speed.
There is this company called Container Store, one of their core values is this idea of 1=3. This company believes that one team member must be productive and be able to fulfill the duties of equal to 3 team members. It's better to have one A player that can replace 3 C players, and in return, pay that one A player twice as much as a regular employee. For instance, is it better for you to pay one person for $15 an hour than having 3 people that have $8 each but they are doing mediocre work? So you want to reward people who are specialized and great at what they do. This is something that I think we need to get good at. If you have simpler operations, it is going to be much easier for you to accomplish things, to have one person handle more tasks.
👊Invest in equipment and kitchen tools - for instance, in slicing vegetables, we used to slice vegetables with a knife, and have training for it like this is how you slice onions or bell peppers, and as our production go higher and higher as we grow our sales, we realized that this is taking so long. You simply do the Math, if it takes an hour a day for a team member to do this task, you can replace that task, and you know how much it is costing you per month for this task to get done, a team member hypothetically is making $10 an hour. So it's taking him one hour day, so 30 days a month, you are paying $300 monthly for this particular task to get done, right? When you look at this way and analyze, can I buy something for $300 that is going to reduce the amount of time that it takes for this task to get done in one hour or reduce it to 15 minutes? The answer is yes, and that is a good investment. That vegetable slicer that I am telling you, we bought it for $250 and that has been tremendously helpful.
Do the Math, and do your due diligence, if it's wiser to have more equipment, then be it. That is what obviously McDonald's has over you and me, they have automation and equipment that is replacing people. So they can do more with fewer people and having some equipment could be helpful.
👊Let go of C players - or instance, if you need to have 4 people closing at night, try doing the basic Math for this with your eyes closed. How long does it take for people to do closing? Let's say, for example, it takes 2 hours to close from 9-11 PM and you have 4 people for that shift. So 4 people, $10 an hour each, that's an average of $80 a night that you are paying for somebody to close the restaurant. Are you able to do that task with 3 people instead of 4? Can you get 3 fast people, and then pay them more?
This is why you need to let go of C players. You need to have conversations with your people you hire and say "If you can do this task within an hour and a half, I will be happy to give you a raise, otherwise I need someone else on the clock to do this and I won't be able to give you a raise". So letting go of C players and having more A-players is going to be remarkably helpful so you can pay them more because they do better.
👊Conduct pulse meetings very frequently - when you do this, ask specific questions to get specific answers. For example, if you simply ask them, are you happy working here? They maybe are just going to say yes and that means nothing. In fact, one of the things you might not even know why people quit is because what they tell you may not be the truth because sometimes, they don't even know why they no longer want to work for you.
One of the things that we do all the time is we ask questions that start with "On a scale of 1 to 10". For instance, "How happy are you with your hourly rate?" versus "On a scale of 1 to 10, how happy are you with your hourly rate?" the latter gives you more tangible information that you can work with and take to the next level.
It's good when they answer 7, 9 or 10. But what if someone gives a 5? It is actually great to get things open so you can ask further questions that can lead to another point like measuring their skills. People's skills are not like whether someone is fast or slow if it's not in a measurable way. For instance, Susan's current hourly rate is $10 and she's asking to be paid $12 like John. Then you explain to her that it takes John to stretch 8 16" pizza in a minute an half, his rate of speed is within the excellent scale that's why he is making $12 an hour, on the other hand, it takes her 3 minutes to do the same task.
We do time trials in our restaurant to measure the skills of our staff in terms of their speed. We also have competitions all the time with our people and we document their speed. Then when it comes to them saying, "Oh, I am not being paid fairly", we can be clear and say "Susan, I'll be happy to help you out in getting you to become faster so I can pay you like John, however, in the state where you at right now, I am not able to pay you more because your skills are not where it needs to be." This way, people can understand exactly what they need to do to get more money. So Susan now is not an A player like John, but my goal as a leader is to get her to become an A player.
3. The schedule
- this is something that employees wouldn't tell you directly. And here's what happens most of the time, they are going to come and tell you, "I want to work on Friday" or "I want to work Saturday all day", and they worked on their schedules for like three months and they realized that they don't have weekends, burned out and they just decide to quit. They are not able to tell that because we agreed in the beginning. That is why it is so important for you to conduct meetings constantly with your people where you check with them, "On a scale of 1 to 10, how happy are you with your hours?" The number of hours, the days and the times of the day that they work, you need to be gathering so much intel because they may have told you one thing but the circumstances have changed. You may not know about it and they would not proactively tell you that. Some of the problems with the schedule are:
👉Not enough hours
👉To many hours
👉Poor work-life balance
These are factors that vary week after week, their opinions about their hours, days and times may change and you as a good and smart leader would think of ways on how to increase retention.
To help you find a solution to this problem, you must have conversations with your people and ask the following questions:
👌On a scale of 1 to 10, how happy are you with the number of hours you get?
👌On a scale of 1 to 10, how happy are you with the days and hours of the week you work?
Some of them would be like "I'm not happy with the number of hours I worked because I'm not working enough hours", and you can tell them, "Well Susan, I understand that John is having more hours, it's because John knows both stations and you only know one. However, I would like to give you more hours if you can handle both so why don't you come on Saturday so you can learn this other stuff from this station, then I will be happy to give you more hours, how about that?" You need to understand these tangible things so you can get that information and take it to the next level.
4. The conflict with team members or managers
- you may never know about this if you don't ask specific questions, you will never get specific answers. They may not just get along with somebody, maybe that only happened once but they no longer would like to work with them because they are not that comfortable or there is awkwardness, you will never know if you don't ask direct questions. Or maybe they don't feel comfortable working with a manager and just choose to quit because everybody hates confrontation.
They don't get along or feel connected with a team member. How to battle this problem?
👌Establish trust by frequently having meaningful conversations with them. Open and active communication is the key to building trust with your team members, be honest and show support.
👌Ask questions like, "On a scale of 1 to 10, how happy are you with the team?"; "On a scale of 1 to 10, how happy are you with how your manager (NAME) treats you, coaches you, etc.?"
5. Career advancement
- this is one of the biggest reasons why people quit and if you own a local restaurant, you may not be able to offer the career advancement that Starbucks or Chick Fil A offers, right? They have the opportunity to grow and become a manager, maybe become a district manager or maybe move up and go to the headquarters of the company and you and I may not be able to offer that. Here's what happens:
👎They don't see a future in your restaurant
👎You have not created an image of the future opportunities available to them
Why they feel that there are no more opportunities is actually because they have stopped learning. Why? Because you and I stopped teaching, so they feel like there's nothing else to know about, they feel like they know everything. So what we need to do are as follows:
👍Teach them something new - conduct cross-training, if you have your kitchen staff or manager, you may want them to cross-train to learn some front skills, and the front learning kitchen, those are getting them out of their comfort zones and acquiring new knowledge.
👍Challenge them to learn new things - if they are bored and get complacent, challenge them to learn new things, and constantly up their game and beat their last best. For instance, teach them about finances, marketing, taxes, budgeting, legal issues, contracts, etc. Involve them with some of these things and you will be surprised because people actually love to learn these skills and they will have way more respect for you because they actually know what is it that you are doing when you go to your office and why is it that you are stressed so often.
👍Inspire them - share stories of your own failure and some of the things that you've learned along the way. You know that in the restaurant business, we commit several mistakes, share these to them so they can also learn from it.
👍Paint a picture of the future -I don't know what the future holds, of course, you don't. You just simply paint the vision you have. You need to be creating this promise of where we are going, you must have a vision as to what's the future like are you going to have multiple locations? Are you looking for a general manager who's going to take over the restaurant and you no longer need to be there because you want your freedom? People need to know what they are working towards.
👍Connect the dots how what they are learning today is building their character and resume - sometimes people are not able to see the connections between the task they are doing now and how it affects their future. And I have this conversation with our people very often, so I know what they want to become in the future like for instance there's the one who wants to be a doctor who is tasked to wash the dishes for hours on a Friday night, I connect the dots by saying "You are working with excellence and diligence and handling this hardship, this is preparing you for what you are going to do in the future." It's building their character, they can give their best, they are getting stronger, physically and mentally, they can stay focused and can handle stress well.
👍Read a book together and require an action plan every week - we as restaurant owners and our managers get together for an hour a week, we get a chapter of a book that we strategically have chosen to go over for them to be exposed to new topics and learn from it.