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Painted in Waterlogue

Compensation is not the only motivator, but it is pretty close to the top of the motivational food chain. Turnover of employees in restaurants of all types is much higher than the norm. Although there are many reasons for turnover, monetary needs seem to be a common factor.

“The overall annual turnover rate in restaurants and hotels was 62.6% in 2013, compared with 42.2% average in other industry sectors.”

The National Restaurant Association – Bruce Grindy- Economist, March 2014

Now, in all fairness, a portion of this attrition is due to the seasonal nature of the hospitality business and the need to have a steady flow of part-time, seasonal employees, yet we all know that there are many, full-time staff members who leave for better opportunities elsewhere.

What are most distressing about this data are the tangible and intangible costs associated with turnover. On the tangible side, it costs time and money going through the search, interview, orientation, and training period for new employees. The intangibles, however, are even more significant:

[]         Stress on the team dynamic

[]         Loss of product consistency

[]         Impact on the restaurant brand while they recover from staff attrition

What do great employees contribute to your restaurants success? How does a restaurant equate value to the intangible contributions?

Note the following partial list of intangibles that great employees bring to a restaurant:

[] Trust and dependability

[] Team esprit de corps

[] A passion for their work

[] A commitment to quality

[] A commitment to consistency

[] Unique talents

Although it is difficult to quantify the importance of these contributions, chefs and restaurateurs understand that they are significant. These contributions give a restaurant its personality and in turn, staying power.

Great restaurants do not appear simply because of location, a beautiful physical plant, or even a well-designed menu. Restaurants mature and become significant because of the people who work and contribute as team members. All of the aforementioned intangibles are the difference between a good and a great restaurant. The difference between a restaurant struggling to survive and one that is financially strong.

When valuable team members leave, the restaurant loses part of its soul, a part that is very difficult to recover.

Painted in WaterlogueSo, how do we recognize and reward these employees – a restaurants most important asset? Will higher rates of pay make a difference? Yes, in the short-term, a pay increase does help, however, the restaurant needs to build a program that encourages long-term loyalty among exceptional staff members. This leads to the concept of merit.

Merit rewards can be remarkable incentives if the restaurant builds a sense of ownership or “intrapreneurship” among employees. People remain loyal and enthused about employers that treat them as partners rather than just staff.

Here are some intrapreneur/partner ideas for great employee retention”

[] Set a program of employee contribution planning (goal setting). Require staff members to map out how they will help the business to grow, improve, control costs, and improve its brand, etc. in a year. Ask these same employees, at the end of the year or period to summarize how well they did with their goals. Depending on their level of success, reward them with an appropriate bonus.

[] Require your employees to self-evaluate at the end of each year, rather than simply rely on the supervisor’s assessment. You will find that most employees are harder on themselves than those who supervise them.

[] Share your success. If the restaurant does well, then bonus checks could follow. This helps to encourage everyone to be on top of his or her game, always.

[] Set up a company 401K and contribute even a small amount so that great employees can see your commitment to their future. (Restaurant people rarely plan for their future without a push from others)

[] Offer direct deposit to both staff checking accounts, but also credit unions for savings.

[] Offer some reimbursement for staff members who continue their education.

[] Cover the cost of staff membership in professional organizations.

With recent discussions about eliminating gratuities for service staff and increasing front-of-the-house base pay, it might be prudent to re-assess the entire compensation model and reward structure in restaurants.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

www.harvestamericaventures.com

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