October 24, 2018

How big is the employee turnover problem in the restaurant industry?

By Ryan Ashton

Categories: Retention, Trends

By Ryan Ashton


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Empty tables might sound like a restaurant’s biggest nightmare. But any seasoned hospitality pro knows that a revolving door of employees is an even greater problem.

The constant need to recruit and train individuals for the same positions multiple times a year is challenging, costly and a major morale killer.

It’s true that every industry faces employee turnover. SHRM recently reported that the annual overall turnover rate was about 19% in 2016. But the restaurant industry faces its own set of unique setbacks that make turnover a bigger challenge.

Just how big? Let’s take a look at the numbers.

  • The National Restaurant Association reported 61% employee turnover across the entire restaurant industry in 2016. That number went up to 73% in 2017.  
  • Statistics show employee turnover is twice as high among restaurant frontline workers. That’s over 100% turnover.
  • In the fast-food industry, the turnover rate is close to 150%.
  • 65% of service industry employees quit within their first year.


Younger Employees, Higher Turnover

Because of its seasonality and high volume of part-time work, the restaurant industry typically attracts a younger workforce comprised primarily of millennials and Gen Zers.


According to the National Restaurant Association, the restaurant industry is the economy’s largest employer of teenagers (Gen Z). In fact, one-third of all working teens in the U.S. are employed in restaurants. This is a major contributor to employee turnover for a few reasons:

  • Many of these 1.6 million teen restaurant employees are getting their first job experience and are likely to move on quickly
  • 27% of food and drink employees go to school, which often means work is not necessarily their first priority


The Younger Workforce Is Declining

A new study published by National Restaurant News suggests a widening gap between new jobs and a declining young workforce.


“In the next 10 years, we’re going to create 1.6 million additional restaurant jobs in this industry,” said Rob Gifford, NRAEF executive vice president. “And yet, the population we are dependent upon to fill those jobs historically will decline by 1.3 million. If you think the fight for talent is difficult now – it is going to get even a lot worse.”


Today’s Employees Are More Dissatisfied

  • The hospitality industry has the highest reported dissatisfaction rate across all industries
  • 31% of hotel, food and hospitality employees are unhappy at work
  • 70% of those unhappy employees have considered quitting
  • Among the top reasons for dissatisfaction included low salary, lack of recognition, lack of benefits and lack of growth potential


Employee Turnover Is Expensive

A study done by Cornell University’s Center For Hospitality Research found staff turnover could cost as much as $5,684 per employee.

  • The average full-service restaurant could spend up to $146,600 annually on turnover alone
  • Productivity loss accounts for 52% of staff turnover costs


Tackling the Turnover Epidemic

Over the last several years, high employee turnover has continued to be the achilles heel of the service industry. But it doesn’t have to stay that way.

Understanding why employees leave is the first step in crafting a solution. What’s next? Doubling down on training, growth opportunities and attractive benefits that speak to what today’s service industry employees need most: convenience, compassion and flexibility. After all, investing in your employees is the best way to ensure they’ll invest back in you and your business.

Here are a few posts to help you get started:

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