Great staff is a critical element of success for every quick-service restaurant (QSR). However, the industry is renowned for its extremely high turnover rate. As of May 2024, the average employee turnover rate in the restaurant industry was 5.5%, compared to 3.4% across all sectors, according to the US Bureau of Labor Statistics.
In this article, we’ll examine this longstanding issue and explore some tactics QSR employers can use to attract and retain key talent.
How Did We Get Here?
The restaurant industry has faced multiple headwinds in recent years. After being forced to pause operations during the pandemic, many businesses reopened their doors only to find few applicants willing to fill their open positions.
By 2021, many restaurant owners were still struggling to fill cook, line cook, server, bartender, and manager positions. Today, years after pandemic lockdowns, restaurant workers still haven’t returned to the industry in the numbers that QSR owners hoped to see.
Calculating Your Restaurant’s Turnover Rate
Before planning how to reduce your QSR’s turnover rate, you need to understand your current levels.
To determine your turnover rate, divide the number of workers who have left your restaurant by the average number of workers it takes to staff it fully. Next, multiply the resulting number by 100 to get a percentage.
For example, let’s say you lost ten employees over the summer holiday season:
- Typically, your restaurant is fully staffed with 35 employees.
- 10 divided by 35 is 0.285
- 0.285 multiplied by 100 is 28.5%
This means your staff turnover over the period was almost a third.
Common Causes of High Turnover Rates in Restaurants
High turnover rates in the restaurant sector stem from several factors, including:
A Fleeting Workforce
The QSR industry employs many workers who are entering the job market for the first time and a fair number of part-time and seasonal workers. Consequently, job stability and employer loyalty are not their top priority.
QSR workers are all too aware of the talent shortage in the industry, and some have developed a “free agent” mentality. They know there’s always someone hiring, so if they’re not 100% satisfied with their job, they’ll apply elsewhere.
Low Compensation
The average hourly rate for fast food workers in the US is just $11.95. For many restaurant workers, pay is predominantly reliant on tips. This adds to the leap-frogging mentality among servers and bussers seeking more covers and/or higher check averages.
Whenever there are seasonal fluctuations, new restaurant openings, a reduction in restaurant sales, or scheduling difficulties, QSR staff often move to keep the best-paying positions.
Uncomfortable Working Conditions
Traditionally, QSR jobs are stressful and involve long hours, so people can quickly get burned out. In terms of the working environment, QSR workers:
- Are often exposed to very hot or very cold temperatures.
- Must often wear protective or safety attire, such as gloves.
- Are exposed to hazardous situations and contaminants.
- May be exposed to sounds and noise levels that are distracting and uncomfortable, such as a noisy restaurant.
- Often work within inches of other people, including customers and coworkers.
- Often deal with unpleasant, angry, or discourteous customers.
- Are often placed in conflict situations.
These uncomfortable working conditions can induce mental and physical stress, discouraging new talent from entering the industry.
Poor Treatment
Increasingly, those working in QSR feel under appreciated by guests. Worse, abuse in the restaurant industry is becoming a significant issue. Reports have highlighted that many restaurant workers experience various forms of abuse, including physical, psychological, and sexual harassment. And disturbingly, incidents of abuse inflicted by employers have increased.
It’s not always that people don’t want to work in the restaurant industry; it’s that they don’t want to work in environments where they’re treated disrespectfully.
Strategies to Reduce Restaurant Turnover Rates
Pay Attention to Pay
Offering your QSR workers low pay doesn’t save you money in the long run, because you’ll spend your savings on recruitment costs when your employees leave for higher-paying opportunities elsewhere.
Try researching what your competitors and similar local QSR operators are paying and ensure your offering is competitive with that. Remember, when it comes to attracting quality employees who will stay with you over the longer term, you always get what you pay for.
Look at Hours and Scheduling
If certain employees are overworked, they could burn out and leave. Make sure your people feel they can take a day or two off if they want to.
On the other hand, some employees leave because they’re stressed about not getting enough hours. Be sure there’s regular, bi-directional communication between you and your workers about their hourly needs and try to accommodate their wishes and preferences within reason.
Track Employee Performance
Tracking employee performance is another tool that allows QSR operators to build a stable, aligned team and reduce turnover.
For example, you could create a staff-tracking document that contains performance metrics for all team members. You can use this “living” document to monitor your employees’ behavior and progress, including aspects such as days worked, overall appearance, workplace attitude and demeanor, guest satisfaction ratings, and participation in training.
Regularly meet with each team member to discuss their performance, development goals, and career aspirations and address any necessary issues.
Be Flexible
Explore options for allowing workers to swap or sign up for unfilled work shifts. Systems like Payactiv Connect make it easy (yet safe) for employers to grant hourly workers access to their shift management system using their smartphones.
Payroll flexibility in the form of Earned Wage Access (EWA)1 allows workers to access wages they’ve already earned but not yet been paid. This particularly appeals to hourly employees who work from paycheck to paycheck and may find themselves short on cash if unexpected expenses arise.
Quick-service restaurant JAE found a solution from Payactiv to increase employee recruitment and retention. JAE’s employees get paid biweekly, but because they offer EWA through Payactiv, workers’ money can now be accessed whenever they need it.
Since implementing Payactiv, JAE has seen a significant increase in employee retention and estimates that about 50% of users stay longer.
Read the case study.
Conduct Exit Interviews
Wherever possible, sit down with workers who are leaving to understand why. Encourage them to be honest, so you know the true reasons they’re moving on.
By conducting these interviews, you’ll be able to spot trends over time. For example, if most of your employees are leaving because of low pay or a toxic work environment, that’s something you’ll want to consider changing.
Set the Table for Success
No restaurant will ever eliminate employee turnover, but with the proper steps, you can reduce your own rate over time.
If you’d like to accelerate your progress on the restaurant retention front, Payactiv could be just the solution you need.
We help your employees fully engage in work and life, improve financial wellness, increase employee satisfaction, and reduce turnover. Payactiv is the partner of choice for companies seeking to attract great people and help them participate fully in work and life. Our EWA solution and suite of flexible workforce rewards and benefits cost you nothing but deliver immense value to your employees.
Learn more about Payactiv’s Service, or book your demo now.
1Earned Wage Access requires employer participation. Employees can only access a portion of the wages they have earned to date.
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