Cutting Expenses: The Battle Against Turnover, Part II


If for every time you hire a new employee you could save $100 you would, wouldn’t you? How about $200? As I shared in my post last week, the cost of turnover for one new employee is said to be between $4000 and $14,000. It stands to reason that if you would take action to save one or two hundred dollars, then you’d probably take action to save thousands of dollars, right?

I was a server. I had just landed a job as a member of the opening team of a highly anticipated restaurant opening in New York City working for one of the country’s most well regarded restaurateurs of our time. I was honored, nervous, and excited. Almost everyone on the team was a hospitality professional, carefully selected out of hundreds of candidates. There were a few who, while not interested in a career in the business, were just as passionate and excited to work at this restaurant as any of us "lifers". It would end up being one of the most important jobs I've ever taken and a invaluable experience.

Looking back, two things made this experience so impactful. The first was that each member of the opening team was personally invested in the success of our proprietor, in continuing to deliver on a brand promise and honoring his name. The second was that each of us had an interest in proving we were exceptional and were given the proper training in order to do so.

We competed against one another, in the friendliest of ways, to see who knew most about Nebbiolo and the region from which it was produced, who had the highest guest check average, who had the exciting description of a new dish… All of which was possible because we had the information we needed. It was an atmosphere in which we pushed each other to know more, and thus the restaurant was better. We nailed the opening, and everyone raved.

Fast-forward three years and I'd been promoted into a management position. We were still very busy, relevant, exciting, and people loved dining with us, because they felt taken care of while enjoying world-class food and wine. Though there was one problem: We had incredibly high staff turnover.

Overall, the impact of the revolving door of staff was relatively small on our guests. Regulars would comment on the new faces, some sharing they didn’t like when the new people did not know their usual table, wine, etc. However, the greater impact was operational. The turnover meant difficulties in managing the schedule and a lot of labor dollars wasted on overtime. It made it challenging to execute service because so many people were new and made mistakes or we were short staffed. It made it hard to recruit the “best” people because we needed bodies on the floor so badly. Morale was low. As a manager I was able to look at the big picture and ask, “What changed?” 

In the beginning, each staff person had the promise of achieving a greater goal. Each person had one of us had a personal goal of some sort. Professionally, we knew that working in that restaurant, for that company, would lead to an advancement. Personally or emotionally, there was a satisfaction that one was part of something meaningful, opening a restaurant in New York City for one of the most well-regarded and prominent restaurateurs of our time. No matter what, it was the promise of achieving a greater goal that brought the best of the best to that opening.

What promise do we offer to new employees?

This is the question you have to ask yourself when you are trying to reduce your turnover costs through training and recruitment. The key is to attract employees that want to contribute to your mission and know that doing so will provide them with advancement of some kind. A 2011 article in Harvard Business Review says it this way, “Employees who don’t understand the roles they play in company success are more likely to become disengaged” 

From a recruitment perspective, you want your potential employees to be engaged from the beginning. With all of the brilliant talent coming out of the nation’s culinary schools and hospitality management programs, you really have a lot to offer if you set it up for them. Take a look at the model used by many of the most prestigious fine dining restaurants. No matter what position you apply for, regardless of experience, you start from the beginning as a supporting member of the floor team.

And people do it! I've had colleagues and friends, decorated servers and sommeliers take lesser positions (both in prestige and pay) at fine-dining restaurants. Why? Because they know that doing so will lead them to great things. With a proper training program, you can attract the best potential employees with the promise that great things can happen when they work for you. This is especially true in cities with well-established or newly recognized restaurant scenes — from New York to San Fransisco; Portland, Oregon to Austin, Texas — people are more eager than ever to build a career in the hospitality industry.

In summary:

Having a structured training program reduces your costs because new employees get onto the floor faster, with better knowledge and skills to execute their work, which means happier guests and higher checks. Because you have this training program in place, you can now attract high-potential candidates to work for you. With a clear path to promotion, these employees not only will stay — reducing your turnover — but they will work hard for you. Further, promoting from within your ranks saves you valuable time in training because your employees are fully versed in your culture and mission. Regardless if you have one restaurant or you're growing a company, this model has proven time and again to be the best way to build your business.

For more information about this topic or if you have a specific question that you'd like for me to answer send me an email or leave a comment.