Keys to Employee Retention, Part 1: Salary
Over the next few weeks we’ll be doing a three part series discussing the importance of employee retention and how it can greatly improve your customer service, bottom line, and customer loyalty for your restaurant. And right now, with a shrinking workforce and abundance of job openings, employee retention is more important than ever.
The State of the Restaurant Industry (2022) report, conducted by the National Restaurant Association, has found that "78 percent of restaurant operators do not have enough employees to support customer demand, with the restaurant and accommodation sectors having more than 1 million unfilled jobs."
High employee turnover means more time interviewing, onboarding, training, and paperwork. When one employee leaves it could make others start considering it as well. Creating and maintaining a healthy environment is key. Good employee retention means the ability to develop relationships with your regulars, increase efficiency, and cultivate a fun and healthy environment. To develop strong retention strategies think back to your times as an employee. What things mattered to you? What made you frustrated? What do you wish your employer had made more of a priority? Employees want to feel valued, be fairly compensated for their work and be challenged. From Day One your retention strategy starts, the day of their first interview.
Today we will focus on salary and benefits, the number one driver for employees.
Be transparent in your pay system
Communicate with your employees on day one how your pay system works, what their compensation is and why, and opportunities for advancement. Helping them understand their paycheck leads to greater trust, and knowing that they can advance keeps them motivated. If their pay changes at any point, always give them ample notice so they aren’t surprised by a change in pay. Remember your employees depend on that paycheck to pay their expenses.
Offer clear opportunities for advancement
Employees need to feel that through hard work and time committed to the job they can advance through the company. Whether that means everyone starts as a dishwasher and moves up the ranks or there are clear stepping stones for moving up the pay ladder helps employees look ahead. Perhaps offering a pay raise once they reach a milestone, such as one year at the restaurant. Cumulative paid time off is also a good motivator- the more hours they work, the more paid time off they earn. Be sure you start them with some paid time off at the very beginning so they can still have days they can spend with family without taking a pay cut.
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Do you offer your employees health insurance? When they order food do they get a certain percentage off? Some restaurants offer “healthy” perks for going to the gym, develop a gift card sharing model with other local businesses to hand out to stellar employees at random, or make relationships with a local child care provider for your employees to take their kids. Being clear in the additional benefits of being an employee, besides just their paycheck, makes them feel even more valued.
Holidays and Overtime
Consider your policy on holidays and over time. Will you offer overtime pay or paid days off for holidays (if you are closed those days)? If you are open during holidays offering overtime pay for the employees who work those days is a great motivator. No one likes working during a holiday, so making it as beneficial as possible will help boost morale.
Staying honest and open about salary and benefits with your employees will keep them motivated, valued, and ready to work. Keep competitive in your market to keep your employees from going to work for your competitors. Constantly review your compensation and make sure it’s compatible with your sales and costs. And above all- value your employees like you wanted to be valued when you were in their shoes.