10 Ways to Reduce Restaurant Employee Turnover

Great staffing is a critical element of any successful restaurant. However, the restaurant industry is also known for extremely high turnover rates — nearly 80%, on average, since 2013. Restaurant turnover stems from several factors, including employing many first-time, part-time, seasonal and student workers. Additionally, upward mobility for restaurant employees often occurs by taking positions at a new location. Because of the high cost of attrition, a well-defined people plan is key to reduce restaurant employee turnover.

What Is Restaurant Turnover?

Restaurant turnover is the rate at which employees leave their jobs and are replaced by new hires within a defined period of time, often a year. Turnover can be voluntary, such as when an employee quits for a new job opportunity, or involuntary, as in the case of layoffs or terminations. Regardless of the cause and the fact that high turnover is the norm in the restaurant industry, it can be costly to the business. After all, it requires significant time and resources to recruit, hire and train new employees. At the same time, lack of consistency can impact morale, productivity and customer service.

Key Takeaways

• High employee turnover is a significant challenge in the restaurant industry — one that leads to increased costs, decreased productivity and inconsistent customer service.
• Implementing strategic hiring practices, providing comprehensive training and offering competitive compensation and benefits are a few ways to increase retention.
• Empowering employees through open communication, recognition and rewards, and providing opportunities for career growth and development can increase job satisfaction and loyalty.
• Tools like human resource management solutions uncover valuable workforce insights that improve decision-making, contributing to reduced turnover and long-term success in the industry.

Understanding the Causes of Restaurant Employee Turnover

The restaurant industry’s workforce also tends to include a high proportion of students, part-time workers and seasonal employees who don’t view their jobs as long-term careers. These employees are more likely to leave their positions when their availability changes or when they find opportunities that better align with their career goals.

That said, in some ways high turnover can be considered a positive aspect of the industry: A constant flux can create frequent openings and opportunities. For workers seeking flexibility, variety and the ability to easily find work in new locations, the restaurant industry’s dynamic nature can be quite valuable.

Several factors contribute to the high employee turnover rates in the restaurant industry.

• Low wages and limited benefits: Many restaurant jobs offer low hourly pay — sometimes even less than minimum wage, with the expectation that tips will make up the difference. This can make it difficult for employees to make ends meet, especially during slow periods. It’s also uncommon for restaurants to offer healthcare or retirement benefits.
• Stressful working conditions: Restaurant work can be fast-paced, physically demanding and emotionally taxing, especially during busy shifts or when dealing with difficult customers. This high-pressure environment can lead to burnout and job dissatisfaction.
• Lack of work-life balance: Restaurant employees often work long hours, including evenings, weekends and holidays, making it hard to maintain a healthy work-life balance.
• Limited advancement opportunities: While there’s always the story of the dishwasher-turned-line-cook-turned-chef, some restaurant employees may see few opportunities for career growth or advancement.

The Importance of Maintaining Low Employee Turnover in Restaurants

High turnover can have a significant impact on a restaurant’s financial health. The costs associated with losing and replacing employees, including the time spent interviewing, hiring and training, plus loss in productivity due to a shortage in labor, can quickly add up. These costs can strain a restaurant’s budget and resources, hindering profitability and investment in growth.

High turnover rates can also negatively affect workplace culture and morale. Frequent employee departures disrupt team dynamics, put additional stress on remaining staff and make it difficult to foster the strong sense of teamwork so crucial to a restaurant’s success. This, in turn, can hinder customer service. New employees may not be as familiar with the menu, policies or customer preferences, potentially leading to inconsistencies in service quality that negatively impact customer loyalty.

On the other hand, prioritizing employee retention sets the backdrop for employing a more experienced staff who can adeptly handle busy shifts, provide informed recommendations to diners and even anticipate and resolve issues before they escalate — all of which contributes to a more cohesive work environment and superior dining experience.

Calculating and Interpreting Restaurant Employee Turnover Rates

Some say a business’s most valuable asset is its employees. Thus, employee turnover rate is a vital key performance indicator (KPI) for restaurants to track. The formula to calculate employee turnover is:

Employee turnover rate = (Number of employees who left in a period / Average number of employees in period) x 100

Let’s take it step by step:

1. First, determine the time period for which you want to calculate the turnover rate (e.g., monthly, quarterly, or annually).
2. Count the number of employees who left your restaurant, voluntarily and involuntarily, during that time period.
3. Calculate the average total number of employees during the same time period. Add the number of employees at the beginning of the period to the number of employees at the end of the period and divide by two.
4. Divide the number of employees who left by the average number of employees, and then multiply by 100 to express the turnover rate as a percentage.

For example, let’s say a restaurant had a total of 50 employees at the beginning of the year and a total of 60 employees at the end of the year. The average number of employees would be 55 (50 + 60 / 2). During the course of the year, 20 employees quit. The restaurant’s turnover rate would be 36% (20 / 55 x 100).

Interpreting the results is straightforward: A higher percentage indicates a higher turnover rate, while a lower percentage indicates a lower turnover rate. In the example above, a 36% annual turnover rate means that a little more than a third of the restaurant’s workforce left during the year. By comparing turnover rates across different time periods or to industry benchmarks, restaurants can gauge the effectiveness of their employee retention efforts and identify areas for improvement.

10 Strategies for Enhancing Workplace Culture and Reducing Turnover

Reducing restaurant employee turnover starts with developing a strong workplace culture that values and supports its staff. A good people strategy consists of several key elements, including strategic recruitment, the development of quality managers, competitive compensation, promotion of work-life balance, opportunities for growth and development, and the tracking of employee performance.

1. Implement Strategic Recruitment Practices

Effective employee retention begins with hiring the right people. Strategic recruitment practices make it easier for a restaurant to identify which candidates are most likely to thrive in the work environment and stay with the company long-term. To improve your hiring process and attract top talent, consider the following strategies.

• Develop clear and comprehensive job descriptions that accurately reflect the responsibilities, qualifications and expectations for each role. Applicants should thoroughly understand what the job entails; the idea is for them to be able to self-select based on their perceived fit for the position.
• Use multiple recruitment channels, such as online job boards, social media, employee referrals and local culinary schools or training programs. Casting a wide net can help you reach a diverse pool of qualified candidates.
• Consider incorporating trial shifts into the hiring process. Trial shifts give candidates firsthand experience in the restaurant to see whether it’s a good fit for them, while managers have an opportunity to assess candidates' skills, work ethic and team fit in a real-world setting.
• Prioritize candidates with a demonstrated passion for the food service industry and a genuine interest in growing with your restaurant. Employees who view their roles as a long-term career opportunity are more likely to remain committed to their positions.

2. Develop Highly Committed Managers

A manager’s level of engagement and commitment to their job and team has a direct impact on team dynamics and turnover rate. In fact, 86% of U.S. employees said empathetic leadership boosts morale, according to the 2023 Ernst & Young “Empathy in Business Survey.” So how do you find the right managers and ensure their dedication to your restaurant’s mission and your employees?

• Find managers with the right talent through a targeted and selective application process. Be on the lookout for individuals with past management experience or people with innate leadership qualities.
• Institute ongoing management training and development programs to give managers the skills necessary to build and manage a successful team.
• Tap into a manager’s strengths to help them engage with their team in the most effective way. This helps build a capable, empowered organization.

3. Offer Competitive Compensation and Benefits

Competitive compensation is often a four-letter word to owners and operators. What many fail to realize is how taking care of your line-level employees (who, by the way, do the most important work) will impact every area of your finances — from top-line sales to bottom-line profit. Ivey Business Journal conducted a six-year study of companies that invested in the “bottom of their ladders” and the impacts those investments made on their productivity, retention and financials. Costco, for example, provided employees with above-average wages and a clear career advancement roadmap. In turn, it experienced record growth, same-store sales, customer satisfaction and reduced employee turnover and inventory shrinkage. Here are a few compensation best practices.

• Document your restaurant’s approved high and low starting wages by job, as well as approved raise rates. This helps prevent anyone from being under- or overpaid.
• Monitor the Bureau of Labor Statistics’s average hourly rates by job, and use it as a guideline when deciding on what to pay.
• Benchmark against other local restaurants to see what pay, benefits and perks they offer to their employees, and use the competitive intelligence to your advantage.

4. Boost Team Engagement

Employee engagement is a significant factor in turnover rate. Highly engaged employees stay longer at their jobs, which reduces business costs and creates a smoother experience for both staff and guests.

There are many ways to engage with line-level employees to build a valued and motivated workforce.

• Create a “Raving Employees” committee, chaired by a line-level employee representative from each department, focused on identifying opportunities to boost employee morale and engagement throughout the restaurant.
• Implement a trainee mentorship program, in which trainees are assigned mentors to make sure they succeed in their first 90 days. Mentors should be model employees who are tenured and have a great rapport with the management team.
• Practice empathy. Be genuine when you ask what’s going on in an employee’s life. Be a champion of your people. A restaurant is a stressful place to work; fostering a caring environment will make it a place where employees flock to, not run away from.
• Get involved in your community. Host fundraisers (opens in new tab), sponsor sports teams and participate in outdoor cleanups. Create a committee for community engagement and appoint an employee to be its brand ambassador. You’ll be amazed at how this impacts your team, not just your community.
• Encourage staff feedback, hold managers responsible for addressing what they learn and conduct daily huddles, quarterly staff meetings (food tasting should always be a part of these) and exit interviews. These policies promote open communication and lead to a better understanding of staff desires and concerns.
• Develop an employee incentive program that rewards outstanding performance, teamwork and commitment to customer service. Rewards could come in the forms of bonuses, gift cards, extra time off, public recognition — whatever makes sense for your restaurant and employee preferences. Acknowledging and rewarding employees who go above and beyond demonstrates that their contributions are valued, potentially encouraging others to follow their example.

5. Cultivate a Supportive Work Environment

Employees who feel valued, respected and supported are more likely to experience higher job satisfaction and engagement, which can contribute to reduced turnover and improved overall performance. To cultivate a supportive culture in your restaurant, consider implementing the following strategies.

• Encourage open communication and active listening. Regularly check in with employees to discuss their concerns, ideas and aspirations. Create a safe space where they feel comfortable sharing their thoughts and experiences without fear of judgment or retribution.
• Provide ongoing training and development opportunities to employees. Invest in their professional growth by offering workshops, seminars and mentorship programs that help them acquire new skills. For example, if wine is a major focus of the restaurant, consider hosting monthly wine tastings for employees. This can enhance their knowledge and improve their ability to make informed recommendations to customers — while being a fun, social event.
• Prioritize employee well-being by offering healthy staff meals, providing ergonomic equipment, scheduling regular breaks and organizing stress management workshops tailored to the high-pressure kitchen and service environments.
• Lead by example. As a manager or owner, set the tone for a supportive work environment by treating your employees with respect, empathy and kindness. Model the behaviors and attitudes you want to see in your team, and consistently demonstrate your commitment to their success.

6. Promote Work-Life Balance

Employees who feel that their personal lives are valued and respected are more likely to experience job satisfaction and remain committed to their employer. But how do you promote work-life balance in an industry known for its long, demanding shifts?

• Offer flexible scheduling options, such as allowing employees to swap shifts or request time off for important personal events.
• Encourage employees to take breaks and prioritize self-care. Ensure that your staff has adequate time to rest, recharge and attend to their personal needs during their shifts, be it for bathroom breaks, ample time to eat or short periods to stretch and clear their minds.
• Though historically rare compared to other industries, consider providing paid time off, including vacation days and sick leave, to give employees time away from work without worrying about losing income or facing penalties.
• Be understanding and accommodating when employees face personal challenges or emergencies. Work with them to find solutions that balance their personal needs with the restaurant’s operational requirements.

7. Offer Career Advancement and Professional Development

The restaurant industry attracts a diverse workforce, including many individuals who value the flexibility and transient nature of the work. But for employees who are looking to build a long-term career in the industry, offering career advancement and professional development opportunities can be a powerful way to reduce turnover and retain top talent.

• Create clear career paths and progression plans for each role within your restaurant. Be sure employees know and understand how they can advance to higher positions.
• Offer regular performance reviews and feedback sessions to help employees identify their strengths, areas for improvement and career goals.
• Provide cross-training opportunities that allow employees to learn new skills and gain experience in different areas of the restaurant.
• When jobs open, consider existing employees who have demonstrated strong performance and potential before recruiting outside of the restaurant.
• Encourage employees to attend external training programs and workshops or earn certifications that align with their career goals and the needs of the restaurant, and provide financial support when possible. Perhaps sponsor a promising sous chef to attend a specialized culinary course on advanced pastry techniques, for instance.

8. Deliver Comprehensive Training Programs

No manager can expect employees to stick around if they’re not set up for success. Effective training helps new hires feel confident in their roles and understand the restaurant’s standards and expectations. A comprehensive training program for new employees often includes the following elements.

• A structured onboarding process that introduces new hires to the restaurant’s culture, values and policies.
• A detailed training manual that covers all aspects of the new employee’s role, including job responsibilities, standard operating procedures and safety guidelines. Manuals must be easy to understand, incorporating visual aids, such as diagrams or photos.
• A dedicated trainer or mentor assigned to each new employee. This person should be an experienced staff member who can provide guidance, answer questions and offer support throughout the training process.
• A mix of training methods, such as classroom-style instruction, hands-on practice and shadowing experienced staff members. Variety helps cater to different learning styles.
• Open communication and a safe environment for new employees to ask questions and seek guidance. Make sure they know who to approach for help and that they feel comfortable doing so.

9. Monitor and Improve Employee Performance

Tracking staff performance is another critical tool that allows managers to build a stable, aligned team and reduce turnover. Develop a system that works for your particular restaurant type.

• Create a staff-tracking document that contains performance metrics on all members of your front-of-house (FOH) and back-of-house (BOH) staff. This living document can track employee behavior and progress, covering items such as days worked, overall appearance, workplace behavior, guest satisfaction ratings, training and opportunities for promotions.
• Develop an internal rating system for employees based on KPIs like per-person average (PPA), the number of guests served per-hour and server error per guest.
• Regularly meet with employees to discuss their development, future employment goals and any problem areas.

10. Conduct Exit Interviews

Departing employees may have limited time to participate in exit interviews, or they may be hesitant to provide candid feedback. But creating a safe, comfortable and efficient way for them to share their experiences can yield insights into your restaurant’s work environment that make it possible to improve the workplace and reduce turnover.

• Develop a standardized exit interview questionnaire that covers key aspects of the employee’s experience, such as job satisfaction, relationships with co-workers and managers, training and development opportunities, and reasons for leaving.
• Conduct exit interviews in person to allow for a more personal, in-depth conversation. If that’s not feasible, consider a video or a phone call rather than strictly relying on written surveys; real-time chats can lead to useful follow up questions and conversations.
• Analyze the data collected from exit interviews to identify common themes, patterns and areas for improvement. Look for trends related to specific roles, shifts or management practices that may be contributing to turnover in your restaurant.
• Act on feedback received by implementing changes and improvements to your restaurant’s policies, practices, and work environment.

Build A Restaurant Where People Want to Work

Restaurant employee turnover is a constant. But great restaurant teams can reduce employee turnover by developing an environment where people want to work. It begins with the proper selection and development of engaged leadership. Good managers help inspire and empower employees, finding opportunities to help staff feel valued. Strategic hiring practices, such as thorough interviews, pre-employment assessments and trial shifts, can help restaurant managers spot the candidates who are most likely to thrive in the restaurant’s environment. Once candidates are hired, it’s important to track staff performance, identifying and solving any staffing issues as they arise.

Competitive compensation and benefits, work-life balance and opportunities for career advancement and professional development also play key roles in enhancing employee satisfaction and reducing turnover. Regularly recognizing and rewarding employee contributions, soliciting and acting on staff feedback, and involving team members in decision-making processes can boost engagement and create a sense of ownership and pride in the workplace.

Discover How NetSuite Can Help Reduce Employee Turnover

SuitePeople, NetSuite’s human resources management (HRMS) solution, plays a vital role in helping restaurants reduce employee turnover and improve overall workforce management. By integrating HR, payroll and employee management into a single, unified platform, SuitePeople helps restaurant owners and managers enhance employee experiences and make data-driven decisions that support retention efforts. For example, the solution makes it possible to garner valuable insights into workforce trends and identify patterns related to turnover, performance and employee satisfaction — all in real time. And, with smart analytical tools and customizable reports, restaurant leaders can make more informed decisions about compensation, benefits and training programs to best support employee needs.

SuitePeople also empowers restaurants to automate and simplify time-consuming HR tasks, like onboarding and performance management, freeing up time for managers to focus on building strong relationships with their teams. The platform’s self-service capabilities also empower employees to manage their own information, request time off and access pay stubs, fostering a sense of ownership and engagement.

High turnover may feel like an inherent part of the fast-paced, high-pressure restaurant industry. But prioritizing staff’s well-being, growth and job satisfaction can go a long way toward retention. Implementing strategies like effective hiring practices, comprehensive training programs, competitive compensation and cultivating a supportive work environment can help you build a team of dedicated professionals invested in the restaurant’s long-term success. And by creating a restaurant where people want to work, you not only develop a positive, engaging atmosphere that shines through in every customer interaction, but you also reduce the costs and disruptions of high turnover.

Restaurant Turnover FAQs

How do you calculate turnover rate for a restaurant?

To calculate your restaurant’s turnover rate, divide the number of employees who left during a specific period by the average total number of employees during that same period, then multiply by 100 to express the result as a percentage. For example, if in a given year 10 employees left and your average number of employees was 50, your turnover rate would be 20% (10 / 50 x 100).

What is the industry average for turnover rate in restaurants?

Restaurant industry turnover rates are typically high, often exceeding 70% annually. However, exact figures can vary depending on factors such as location, restaurant type and economic conditions.

Why is turnover in the restaurant industry so high?

Various factors contribute to high turnover in the restaurant industry, including low wages and limited benefits; long hours; fast-paced, high-stress working conditions; and a transient workforce that often includes students, part-time employees and seasonal workers.

Which restaurants have the highest turnover rate?

Turnover rates can vary widely among different types of restaurants. Fast-food and quick-service establishments often experience higher turnover compared to full-service, high caliber restaurants.

What is a good table turnover rate for a restaurant?

Table turnover rate refers to the number of times a table is occupied and vacated during a specific period, typically during a shift or over the course of a day. A good table turnover rate depends on factors such as the type of restaurant, the average check size and how much seating is available. Full-service restaurants tend to have fewer turns than a quick-service establishment.