Social media restaurant communities are littered with conversations revolving around one of the most costly and frustrating elements of the business: Employee Burnout. Every LinkedIn Group, Google+ Community and Facebook Page dedicated to the industry sees its share of questions and answers as to how to Make It Stop.
If you’ve ever worked for a restaurant, as a staff member, manager, or owner, you are familiar with the problems. Employee turnover is astronomically expensive and impacts customer service in a major way. The old adage that it’s more expensive to earn a new customer than to keep one also applies to your employees. This is one of the most crucial challenges QSRs face, yet the National Restaurant Association pegs the turnover rate in the restaurant and accommodations sector at nearly 63% in 2013.
But there are two different versions of this tale: restaurants who struggle to keep bodies in employ, and those who have people waiting to GET IN. What determines which one your restaurant is? First, let’s look at a few scenarios in the restaurant Industry:
This St. Louis restaurant chain gets a lot of attention for its record setting employee retention, and it deserves every bit of it. The numbers you will hear repeated:
- 80% of its 275 full time employees have been with the company for 10 years or more.
- They set a record of going an entire year without one employee leaving or being fired.
Obviously, Lion’s Choice is doing a lot right. Here are some of the benefits they offer full time employees:
- Medical and dental insurance.
- A401K program and match 50 percent
- Life insurance
- Family and medical leave
- Paid vacations.
Now, compare that to one of the incredibly popular Millennial darling, Chipotle, where employee turnover sits at the other end of the spectrum, with 80% turnover yearly. Complaints about working conditions and lack of training at the QSR abound online, particularly on Glassdoor. One complainant was so inspired he created a website to document both anonymous and ‘registered’ complaints about his former employer.
And Chipotle is not alone. McDonald’s has become legendary for its customer service and ‘friendliness’ complaints, and although the chain would not verify its exact employee turnover rate, it is fair to surmise that its part time workforce and high turnover is at least part of its customer service problem. And of course, with the QSR employee turnover rates as high as they are, it is clear that Chipotle and McDonald’s have a lot of company.
The primary difference between these Lion’s Choice and the other restaurant organizations so challenged with employee turnover? Of course Lion’s Choice is smaller than the other operations we’ve named, but it is also clear that Lion’s Choice employees feel a loyalty to their employer that is reciprocated. The comments on Glassdoor by employees from the other companies named shows that they feel their employers see them as expendable, and the turnstile will keep spinning.
Is it really that simple?
As the economy creeps toward a more stable situation, turnover will become even more of a headache as ‘disposable’ jobs are easier to come by. Anyone in the restaurant Industry understands that employee loyalty is more complicated than simply ‘hiring the right person.’ The list of issues include that, plus:
- Pay and benefits
- Accommodating work hours (since so many restaurant employees are students)
- Comprehensive training
- A positive work environment
If it was simple, would the vaulted Starbucks corporation have a turnover rate cited at 65% by Rossi Norman Dias in a case study (he also puts other QSRs at 150 – 400% turnover rate). In his case study, Dias names the culture of teamwork as a huge factor in employee morale and motivation. In the end, it all comes back to pscyhology the principles of positive reinforcement outlined in BF Skinner’s Operant Conditioning.
And of course Starbucks is famous for its culture and its benefits, recently adding tuition reimbursement to that list.
But how do you create loyalty if you don’t have the profit margins to provide all of the bells and whistles that Lion’s Choice and Strarbucks do?
Because Virtual Next works with clients within the QSR industry, and our business is mobile loyalty, we believe we ‘come at’ this problem from a unique perspective.
How would an internal loyalty program work?
The point of an employee loyalty program is of course to gain your workers’ dedication, but in doing so, you’ll have to prove your dedication to them. In order to consider how the program could work, let’s look at some of the greatest challenges QSR employees face:
- Low pay
- Lack of Proper Training
- Long and sometimes monotonous hours
- A negative or despondent culture
What if you had an internal, easy to manage loyalty program that tackled at least some of these issues? It could include some of the following:
Rewards for group performance: Many employees who leave a QSR job site the terrible work environment as a big issue; building teamwork builds employee morale all around.
Individual Rewards that could include:
- Extra Breaks
- Free Food
- An Earned Prime parking spot
- An accrual system that worked towards a bonus day off?
We understand that QSRs face some of the most challenging hiring and employee retention issues in any industry. We also realize that an internal loyalty program is not the magic elixir for all of your turnover issues. Creating proper training and an attractive culture is a colossal undertaking, but there are QSRs out there doing just that, and your employees would quickly jump ship to any one of them if they thought the grass would be greener. Creating an internal loyalty program that sets you apart can be a major part of what keeps them on your team.
This post originally ran on QSR Magazine.