6 strategies to improve employee retention at your restaurant6 strategies to improve employee retention at your restaurant

Jim Sullivan is a popular keynote speaker at leadership, franchisee and GM conferences worldwide. This article does not necessarily reflect the opinions of the editors or management of Nation’s Restaurant News.

“No one wakes up in the morning to go to work with the hope that someone will manage us. We wake up in the morning and go to work with the hope that someone will lead us.”
— Bob Chapman, chairman and CEO, Barry-Wehmiller

Today’s foodservice industry is characterized by an oversupply of restaurants and an undersupply of customers, an oversupply of capacity and an undersupply of profits, an oversupply of jobs and an undersupply of talent. And, if you haven’t figured it out yet, the inability to find, develop and retain performers is at the heart of most of your challenges. The so-called labor crisis (which is really a retention crisis) affects every operational process and procedure, from sales and purchasing to training, catering, leadership and marketing.  

Here are six smart strategies to apply to your retention toolkit:

1. Do the math. Consider the impact that employee churn has on your bottom line. Let’s say your restaurant employs 20 team members and annual turnover is 100 percent (the industry average is 114 percent). Let’s also assume that it takes $2,000 per person to source, recruit, hire and train someone to replace each person that left. That’s a $40,000 annual hard cost. This means you have to generate $400,000 in gross sales (at a 10-percent profit) to pay that $40,000 annual turnover cost. So you’re probably working until the end of February each year just to pay your turnover costs. Reducing churn by even 10 percent annually means stronger people, performance and profits.

2. Align, then refine. I recently delivered the keynote address at a restaurant chain’s GM conference. Before I spoke, the CEO presented what he called “Four Focus Pillars of 2018.” The third was labeled “Adequate Staffing.” Wait, what? If that’s the standard, what more than “adequate patronage” can result? I think a better focus is: “Fully Staffed with Low Drama, High Value Players.” Put a premium on finding and developing employees who can connect with customers, align to your culture and have an aversion to creating conflict. “Hire cheerleaders and teach them to be team members,” says HR guru Robert Half. 

3. Clarify standards. Ask, “How well do I want this job done?” not, “What position do I have open?” To build a stronger team, you first build a stronger recruiting process. Stick to standards. You’ll have problem employees for as long as you continue to hire and tolerate them. Don’t get so absorbed in the what that you lose sight of the why behind it.

4. eNPS. Nearly everyone reading this column is probably familiar with the Net Promoter Score (NPS), a metric that measures customer satisfaction by measuring guest response to a simple question: “On a scale of one to 10, how likely are you to return and recommend our business to a friend?” This two-pronged metric is something I’ve long championed in this column: ROC (Return of Customer). If employee retention is your end goal, then employee engagement is the starting block. Why not borrow a tactic from Google and measure Employee Net Promoter Scores as well? The formula goes like this: eNPS = % promoters - % detractors. Survey team members annually to calculate their eNPS. Using a similar 10-point scale, you can pose questions like, "I would recommend my workplace/our company to others." Employees with 9 ratings are generally considered promoters, while those with ratings ranging from 0-6 are labeled detractors, and 7-8 as passive.

5. Know your tripwires. We never communicate enough, and we usually communicate way less than we think we do. Knowing what you stand for — and don’t stand for — is integral to retaining high-performers. Are you clear on your non-negotiables? How do you communicate them? And what are the consequences and corrections if those standards are compromised?

Ever heard the story of Van Halen and the brown M&Ms? In 1982, at the height of the band’s popularity, they had a very complicated and lengthy tour rider (the contract by which concert promoters booked touring acts). Among hundreds of other items related to stage design, sound, wiring and lighting, the contract plainly stated that their dressing room was to contain a one-pound bowl of M&M’s Peanut candies, with the stipulation that all of the brown M&M’s be removed from the bowl. On a few different occasions during their 1982 U.S. tour, the band arrived in the dressing room pre-concert and, spotting brown M&M’s in the bowl, refused to go onstage. 

This story is often cited as an example of a rock band’s massive egos, childishness and excess commonplace in tour riders. But the fact is, the brown M&M’s represented a real threat to both the band and the audience’s health, safety and well-being during the show itself. Their stage gear traveled in nine semi-trailers, triple the amount of the typical A-list touring band of the time. The band performed on a multi-tiered stage chockablock-full of timed pyrotechnics, lighting, flames and confetti cannons. The weight of the stage equipment, lights and timing of those pyrotechnics involved complicated stage bracing, electrical wiring and safety checks that were critical to a dynamic — and safe — show. The specification to remove the brown M&M’s from the bowl was not listed in the section on dressing room or catering requirements. It was buried deep in the details of the wiring and stage bracing section of the tour rider.

The band had learned that the easiest way to determine the concert promoter’s compliance with details was to insert the brown M&M’s demand into the wiring specs section. The dressing room candy bowl became their visual tripwire for safety, providing instant visual confirmation of compliance or negligence. If they saw brown M&M’s in the bowl, they immediately ordered a line-check of the entire production that could result in lengthy delays or even cancelling the show. What appeared to be boorish behavior turned out to be assurance that safety standards had been applied and that the details of a contract had been thoroughly vetted and complied with. Promoters soon learned to sweat the small stuff.

Whenever you walk past a problem in your restaurant, you’ve approved it. Standards compromised soon become the status quo.

6. No train, no gain. You know what’s stupid? By failing to invest our time in developing the team members we have, we end up investing twice as much time recruiting strangers to replace them. A wise man once said, “If you don’t spend all your time training, you will spend all your time training.” How true that is. Focus on developing your C and B players into A players and make that process as important as food safety is in your restaurant. Your goal is not merely to help people learn; that is a tactic. It is to help people do. Consistently applied knowledge in the workplace allows you to start playing the game at a level where the competition doesn’t even know there is a game.

“Team member and manager retention has moved from an opportunity to a necessity for restaurants,” says Will Charbonnet, Jr., president of Philadelphia Fresh Foods LLC, a Qdoba Mexican Eats franchisee in the Philadelphia area. “Team member turnover is not just the largest hidden expense, but the acceptance of the revolving door keeps a restaurant mired in mediocrity. The retention of high-performing team members and leaders is essential to enabling restaurants to move from meeting basic needs to building real culture and impressing every guest. Guest standards will continue to increase, and retention is the only way to build cohesive teams that will continually exceed guest expectations and our sales goals. It is impossible to cultivate excellence if we plant a new crop every few weeks.”

When it comes to employee retention, your circumstances may not be negotiable, but your decision-making is. So don’t forget that results, not “effort,” get rewarded in the real world. Do the things that count instead of just counting the things you do.

Jim Sullivan delivers keynote speeches and workshops at leadership conferences around the globe. You can get more information at Sullivision.com, along with his training catalog. Sullivan is the author of two bestselling books: “Multiunit Leadership” and “Fundamentals,” available at Amazon. Follow him on LinkedIn, YouTube and Twitter @Sullivision.