Fighting staff turnover in a service business

It's rarely been harder to keep hold of staff – particularly when you're working in food and hospitality. So, how can you build a company that your employees stay in?
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Plenty of sectors have experienced high staff turnover since the pandemic began, but food and drink and hospitality businesses have been more affected than most. Employees, very much aware that demand for their labor is high and with an altered attitude to what they expect out of a job, simply aren't going to stick around if their pay and working conditions don't meet their expectations. 

No matter what sector you're in, keeping hold of valuable members of staff should always be a priority. And while pay rises all round might be a little fanciful, there's plenty you can do proactively to make retention a core part of your business. Here we dig into some of those things – both big and small – that you as an employer can do to minimize the chances of staff members looking elsewhere.

1 million. The number of Americans that quit leisure and hospitality jobs in November – a record high. The sector's quit rate (6.4%) more than doubled the national average (3%), according to the Bureau of Labor Statistics.

13.5%. The average US hourly earnings increase for the sector's workers in 2021 (inflation was 6.8%), says the Bureau of Labor Statistics.

71%. The proportion of hospitality businesses in the UK that increased staff pay in the past year (by up to 12% in some roles), according to recruitment site

What you can do 

Roberta Matuson is author of Evergreen Talent: A Guide to Hiring and Cultivating a Sustainable Workforce, while Joanna Howes is a leadership coach who specializes in teaching managers how to motivate their team. Here, they give their top tips on how to retain employees.


Reframe how you think about higher wages. 

‘Paying for the best people means hiring less people, because the best are more efficient, do better work and can handle more responsibility,’ says Roberta. Given the resources required to hire and train new employees, consider increasing certain high-performing and efficient staff members' wages instead of looking for less experienced replacements who will accept lower wages. Roberta adds, ‘Don’t wait until someone threatens to leave before offering them a raise. Recognizing high performers sends a message to the rest of your team.’  

Think of other avenues for compensation. 

For example, employee stock ownership programs can be a fantastic way to emotionally connect your team with the success of your business. In the US, Pulley is a good starting point if you're looking to give your team a slice of the pie. For UK companies, Vestd is a good share scheme platform. Giving out bonuses to current employees, increasing wages and offering to pay towards tuition or childcare costs are other good ways of recognizing and retaining your team members.


Keep promoting training opportunities.

‘It's a really important part of career development. Listen to staff and find out what they're interested in learning about. If it's relevant, set a training budget per person. But it can be as simple as buying them a book,’ says Joanna.

Openly discuss career progression, from the interview stage.

‘Then have regular one-to-one sessions with employees to discuss their development and promotion opportunities. Try completing a stay interview, where you ask people the same questions you would ask in an exit interview but before they've quit,’ says Roberta.

‘Create targets for your staff to aim for…

…and reward them for hitting them. This goes beyond key requirements, like food safety and hygiene. This can be the number of covers they do in a week or the speed of their service. Then use these targets to create a culture of individual recognition,’ says Joanna. Do this on a weekly, monthly or quarterly basis. She adds: ‘You need to constantly ask yourself, what can I do as a leader to make sure that my people are being recognized?’


Survey your team to see how their goals are being met.

‘Focus on topics like career progression and job satisfaction. Be transparent with them about what you're doing, in order to build trust,’ says Joanna. If you want to formalize the process, SurveyMonkey has plenty of tools to help you build your own employee engagement survey.

‘Take the time to connect with your team… 

…not just when they've done something wrong. That means, if you're a founder, go out of your way to speak with every member of the team at least once a week,’ says Roberta.  

Reinforce positive workplace culture. 

‘Organize sessions where team members share their “win of the week” in a relaxed setting, or have employee of the month awards,’ says Joanna.

Three interesting approaches 

1. Turning contractors to full-time staff to shareholders: RNS Meals

Cost constraints meant healthy meal-kit delivery service RNS Meals couldn't hire full-time chefs when the business started in 2017. ‘Hiring students and part-time contractors meant there wasn't much security for the business if chefs wanted to leave,’ says founder Simmy Dhillon

‘However, as we grew, we were able to offer some of our contractors more work and, as a result, they joined our team full time.’ RNS Meals currently has 10 full-time chefs on its books, all of whom were previously temps, alongside 20 contractors – giving them the flexibility to adjust for periods of high demand. The next step of its retention strategy is a share equity program for the team, which Simmy plans to roll out in 2022. ‘I took advice from other founders who've done it, as well as from our accountant. It's been stressful and a lot of work, but it's a great initiative,’ he says. ‘My advice would be to always make sure you've got a good accountant, as it's not always that clear what you need to do.’

2. Fixing staff pay inequity: Santa Fe BK

This Mexican restaurant in Brooklyn, founded in 2021 and famous for its green chile breakfast burritos, is trying to tackle a common issue in the US: pay inequity between front- and back-of-house staff. Santa Fe BK has decided that front-of-house staff will continue to earn $12 per hour plus tips, while back-of-house workers, like dishwashers, will receive $18 per hour plus a ‘surge bonus’: a percentage of the restaurant's sales during their shift (set initially at 8%). That way, the busier they are, the more money staff make – whether they're directly dealing with customers or not.

3. Fixing staff pay inequity part 2: Mamaleh's Delicatessen

This Jewish deli in Cambridge, Massachusetts, pays its wait staff, bakers and sandwich makers $17 per hour as a minimum. On top of that, the company has introduced a 20% admin fee to each bill, which is then evenly distributed to the restaurant's employees (excluding the owners). With this model, employees are projected to make an additional $3 to $5 per hour. And with the service fee shared between front- and back-of-house staff, any wage gap between tipped and non-tipped positions is minimized.

This article was first published in Courier issue 46, April/May 2022. To purchase the issue or become a subscriber, head to our webshop.

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