How to Improve Employee Retention (and Why Customer Retention Depends on It)

Nobody’s happy when turnover rates spike.

A high turnover means money must be spent on sourcing and qualifying new staff members. The cost itself is one thing, but paying for something that you aren’t getting is another thing entirely, since a study from Deloitte revealed that it now takes an average of 52 days to successfully hire to fill an open position. For an industry with already high turnover rates and low levels of predictability, this could grind a restaurant’s productivity to a halt.

Voluntary turnover usually comes without warning, making it more difficult to find a replacement in this slim time frame. Not only that, but voluntary turnover can be detrimental to the morale of your remaining employees. In situations like this, it’s no surprise that restaurant owners are left wondering how to improve employee retention.

Why You Need to Improve Employee Retention

When restaurant operators experience low-notice turnover, they pay twofold.

First, operating while understaffed is costly and inefficient.

Second, your customers lose an opportunity to interact with an employee that’s familiar to them—their absence could be a red flag that leaves customers wondering what happened. Customer service is the foundation of the restaurant industry, and your staff are your brand ambassadors. Running a high-turnover restaurant makes it difficult to implement and maintain a customer service strategy dependant upon customer-employee rapport.

Recommended Reading: How to train your staff for better customer loyalty

It’s worth bearing in mind that when you have vacancies in your workforce that cause your staff has to work extra shifts or longer hours to compensate, the quality of your customer service may start to show signs of strain.

Effectively, a constantly changing workforce can keep the customer from forming a deeper relationship with your company. All it could take is a slightly lower price or a more convenient location for your customer to start frequenting a different restaurant.

By reinforcing your employee retention strategy, you can create the opportunity for the customer-employee bond to form and ultimately experience an increase in customer retention.

Why Customer Retention Depends on It

Your restaurant staff is responsible for making excellent first impressions with new customers and for nurturing those relationships over subsequent visits.

For most of your customers, the face of your company is the person they do business with—your staff. If your company is turnover-heavy in front-of-house positions, no matter how likable the new hires are, they will still need to start from square one when it comes to forming relationships and gaining the trust of your customers.

With so many options in today’s food market, your restaurant will face many new competitors each year—competitors that provide the same solution as you do, for the same price or lower. Such a high degree of market saturation is likely the cause of how a 5% increase in customer retention can increase overall profits between 25% and 95%.

It’s never been more important for restaurants to evaluate their customer satisfaction strategy and focus on how your staff can get customers to keep coming back. Unless you establish your business as a leader in your community, you’re at risk of blending in with the crowd.

4 Ways to Improve Employee Retention

Bottom line: if you work on improving your customer retention, customer retention will increase proportionately.

If you can identify the causes of turnover at your company and promote and focus on making employees happy, you will be able to reverse any turnover trend. The resulting employee retention will give your customers a better opportunity to bond with these employees, strengthening customer relationships and increasing customer retention.

Here are four ways to increase retention:

1. Hold Regular One-On-One Meetings.

Hold quick, 10-minute meetings to check in with your employees on a regular basis. Use this time to connect with your employee and learn about their experience at your restaurant.

2. Conduct Exit Interviews.

Learn why staff are leaving. Use this time to internalize their issues to better your restaurant.

3. Recognize Outstanding Service.

Take the time to celebrate staff achievements. Make announcements to all of your employees when you see something exemplary

4. Communicate Your Business Strategies.

Transparent leadership is key for involving your employees in decision making. Plus, sharing strategies in one-on-ones or during team meetings offers a great opportunity for staff to provide you with their feedback!

Recommended Reading: How To Improve Restaurant Management Communication

Many jobs within a restaurant will always remain a “means to an end.” Whether you’re receiving applications from teens looking for a summer job or post-graduates working part time while they take classes, few applicants will be looking to turn that position as a server into a career. With all this mind, there are steps you can take to establish a culture that supports long-term employment.

The first step, of course, is to solidify your employee retention strategy. Adopting an effective employee management system will do the majority of the heavy lifting for you. In fact, there are plenty of neat tech solutions at your disposal to accomplish that goal.

With the benefits of increased employee retention and better customer relationships, the link between staff retention and customer retention is undeniable. Today’s restaurateurs don’t need to settle for high turnover. All it takes to combat turnover is effort, as oftentimes, the solution is merely a conversation away.

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Will Harmon is a Marketing Associate at BlueCart. He’s a content enthusiast, a food appreciator, and a ping pong aficionado.