How to reduce restaurant turnover rate

A high restaurant turnover rate isn’t just frustrating for restaurant owners and managers. It’s also expensive. Cornell’s Center for Hospitality Research estimates that the average cost of turnover averages around $5,864 per front-of-house employee. Of course, this varies depending on the type of restaurant you run and the level of experience for each employee.

Fortunately, there are ways to get on top of your employee turnover rate and stop it from becoming a bigger problem. Here’s how to get a handle on your turnover rate and boost restaurant employee retention. 

How to calculate restaurant turnover rate

Before you can tackle the problem, you should know what you’re dealing with. Start by calculating your specific turnover rate by following these steps. 

1. Determine the following information

• How many employees you had at the beginning of the month
• How many employees you had at the end of the month
• Total number of employees who left during that month

2. Calculate your average number of employees

Use this formula to find the average number of employees:

Avg. # of employees = (number of employees at the beginning of the month + number of employees at the end of the month)/2

3. Calculate your turnover rate

• Divide the number of employees who left during the month by the average number of employees 
• Multiply that answer by 100 to get your turnover rate percentage 

Annual turnover = (number of employees who left/average number of employees)*100

You can calculate turnover for any time period, but most restaurants look at their turnover rate by month or year. 

Diagnose the problem

Over time, tracking your restaurant turnover rate can help you understand why your employees might be leaving regularly. Look for patterns to help diagnose potential issues at your restaurant. Does your turnover rate spike during the holidays? Is there a specific role that’s always open? It may be that you need to bring on additional seasonal help or provide training for certain roles. 

As you dive deeper into your restaurant turnover, you may also find that there’s nothing specifically wrong with your restaurant. Staff turnover in the hospitality industry is common. Rather than trying to reinvent the wheel when it comes to hiring, look at other aspects of your operations that can alleviate stress for your staff. 

For instance, reducing your menu size and simplifying menu options can make it easier for your team—and save money. When your front-of-house staff has fewer dishes to remember, they can make fewer mistakes and focus on getting the customer experience right. And, your kitchen can lower food waste and streamline inventory management.

How to reduce turnover in restaurants: 4 tips

Simplifying your menu is just one small intervention that can help improve the employee experience. These other tactics can help you lower your restaurant turnover rate and keep great employees around. 

1. Set a fair tipping policy

Some studies suggest that Americans are worse tippers after the pandemic than before. That’s bad news for your team. Consider stepping up to cover the gap by revisiting your tipping policies to ensure they meet the needs of today’s workers. There are a few ways you could update your tipping policy:

• Split tips either by hours worked, via a points system, or based on a percentage. 
• Raise the base pay rate and/or eliminate tips altogether.
• Keep as much of the profit–and tips–in-house as possible with a system like Clover Online Ordering.
• Make it simple for guests to tip on credit card payments with Tip on Tablet/Tip on Screen and Tip on Paper. 

Before you make any changes to your tipping policy, make sure you get your employees’ input. Your employees can be a great source of ideas for how to weather the loss of tips, and it’s important that they have a say in your restaurant’s operations.

2. Offer upskill training

One way to retain restaurant employees is to show you’re invested in their success. For new hires, that means offering onboarding and training to make sure they’re confident on the floor. For existing employees, provide opportunities to upskill into management positions or a more specialized role within the industry. For instance, a fine dining establishment might consider sponsoring an entry-level sommelier course for servers with six months’ tenure. 

Ultimately, offering more job skills training could help create the sense that you have your employees’ backs and they’re embarking on a career–not just a job.

3. Create a family atmosphere 

Front-of-house roles are often just as stressful as working in the kitchen. Make sure your team feels recognized and appreciated–and try to foster a team atmosphere. Bring everyone together for family-style meals before shifts or after-hours. Be generous with positive feedback, so your employees feel supported. Recognition can be as simple as giving someone a pre-shift shout-out or creating a more formal employee-of-the-month program. 

4. Provide the resources to maximize performance

Finally, make sure your team is set up to succeed with the tools they need to serve customers expertly. 

Help your host stay on top of the lunch rush by using the Clover POS floor plan feature to manage guest orders and ticket times by table. 

Help your servers shine by creating menu items, categories, and revenue classes that help them accurately place orders and increase check sizes. 

And, help your bartenders stay organized with a bar POS that simplifies operations and improves the guest experience.

Clover’s restaurant POS systems are stacked with features and capabilities designed to make life easier for you and your team. With Clover, your staff can take orders–and payments–anywhere on the floor, manage online orders, accept all major payment types, and cater to guest modifications in just a few taps. 

Talk to a Clover Business Consultant today to learn more.

Editorial Team

Full Service Restaurants (FSR), Quick Service Restaurants (QSR), Run your business, Staffing

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