Cutting Expenses: The Battle Against Turnover, Part I


The cost of turnover for one new employee 
is said to be between $4000 and $14,000…  

The fact is, when you own or manage a restaurant or restaurant group, you have to wage war against turnover. In addition to what can be quantified, non-quantifiable costs need to be considered as well, such as changes in staff morale, relationships with regulars, and the trust you build in your employees. People come and go all the time; it’s part of the narrative, but there are things that we can do to reduce these costs and build a better team. 

Renowned restaurateur (and my former boss) Danny Meyer in his book "Setting the Table" discusses the skill-set of his employees. He says of the 100% of the person's job skills, 51% are emotional and 49% technical. The greater weight or worth of the emotional skills is due to the fact that you cannot teach them in the restaurant. You can't teach someone to be nice; to care about your guests in a genuine way, but you can teach them your recipes and how to open a bottle of wine. 

I share Mr. Meyer's philosophy not to suggest that you recruit and hire this way (although, I do happen to advocate for it). Rather, I share this with you because I want to suggest you think of your organization in the same way. You can’t teach your employees to trust each other, to know how best to work alongside one another, or to know how to behave with specific regulars. Those things come with time and have to be learned by experience, not through training.

So what's one trick to reduce the cost of turnover?

Your training program should be designed to easily promote from within

When you promote from within, you've already trained on the hard part. The promoted staff person already has learned your restaurant’s culture (51%) and presumably they are ready and eager to learn the 49% (the technical side) of their new position. With 51% of the training already accomplished, they are more than half way to being excellent in their next role! Of course, this is easier said than done.

From host to server, server to bartender, supervisor to manager, each rung of the ladder in your restaurant should have clear goals that help them get to the next. A training program that guides each staff person to his or her next role takes a fair amount of time and energy. However, when you examine the costs of not running a structured training program, perhaps it seems like something worth investing time into.

Whether you're a one-restaurant operation, you’re expanding to a second or third location, or you're at that mark of expanding into your fortieth or fiftieth store, a well-founded training program that guides each staff person towards what is next is the key to managing your growth and reducing turnover costs. 

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.


Additional Resources:

Check out this turnover cost calculator to figure out your restaurant's actual cost of hiring a new employee.

The Restaurant Opportunities Centers United and Dr. Rosemary Batt, Ph.D. Cornell University Industrial and Labor Relations School published a study in 2012 that examines in depth this particular subject.

If you haven't read Danny Meyer's "Setting the Table" you absolutely should.