Trouble Keeping Employees? Work on Manager Retention

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How do you recruit top talent and grow repeat guests? Retain your managers.

Operators are struggling to find talent—that’s not news. If you’re reading this, you’re likely well aware that finding great help isn’t easy.

And as an operator you may have discovered over the past year or two that that to remain competitive as an employer you’ve found yourself paying much more than minimum wage.

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We asked industry leaders to weigh in on what metrics they were tracking to ensure proper cash flow, increased profit margins, and operations setup for future growth.

Things are, to understate it, “difficult.”

According to restaurant industry insight and analysis firm TDn2K, large percentages of crucial roles are severely understaffed. When it comes to front-of-house hourly roles, 73 percent of restaurants are understaffed. That number soars to 98 percent for back-of-house hourly roles. The majority of restaurants, 57 percent, are also understaffed in regard to shift leader roles.

Operators are dealing with a turnover crisis.

Mary Hamill, V.P. of sales engineering for HotSchedules, recently pointed to two major Unites States economy milestones to understand this crisis. First, Wall Street collapsed in October 2008, resulting in 2.8 million jobs lost and 8 million Americans being unemployed. Second, Uber was born in March 2009.

The latter is important because it helped usher in and nurture the so-called “gig economy.” Today, more than 6 million Americans are working “gig” jobs. They set their own schedules, they pop in, they make their money, they move on. For some, no two weeks of work are the same. Millions of Americans may no longer be interested in more traditional employment, and that’s more than likely taking a toll on bars, restaurants and nightclubs, along with other industries.

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Hamill has revealed that you’ll see more than 58,000 general manager jobs available if you visit job site Indeed. This means that managers are leaving and, if those job postings are remaining up because the roles haven’t been filled, many restaurants are operating with fewer managers. The manager turnover rate for full-service restaurants is at 37 percent, and that number jumps to 44 percent for limited-service concepts.

The cost of manager turnover per worker? A staggering $14,000.

Looking into what’s expected of today’s bar and restaurant managers, it’s not entirely surprising that it’s difficult to hang on to them. Managers are making less on average yet expected to know and use 20 to 35 technology systems. Their jobs have become more complicated but compensation isn’t exactly keeping up with what’s expected of them.

Much of the focus on employee retention has centered on hourly roles. It’s possible that a better strategy is to focus on retaining managers and shift leaders. One of the top reasons cited by employment sites, data analysts and employers who conduct exit interviews is leadership. People quit managers, not jobs, some say.

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Another reason people quit jobs is feeling disconnected, disengaged. Hamill and HotSchedules define employee engagement as, “The level of an employee’s psychological investment in their organization.” If an employee doesn’t feel engaged, if they feel like they’re just punching in and running out the clock for a paycheck, how significant is their investment in your bar, nightclub or restaurant? What incentive do your top performers have to stay with you if they don’t feel heard, valued and as though you’re invested in their career?

Lack of engagement trickles down to your guests. People pick up on it when someone with whom they’re interacting seems unhappy or uninterested in their job. A disengaged employee, intentionally or not, convinces your guests to give up on you and give their business to your competitors.

HotSchedules has the following to share about engaged employees:

  • 70 percent are strong on customer service.
  • 78 percent would recommend their place of employment to others.
  • They boost sales by 24 percent.

We shouldn’t need data to understand why engaged employees are much more desirable than their disengaged counterparts, but there it is. When an employee is engaged with leadership, their team and the guests, they deliver guest service that generates revenue.

The people you select to lead your employees are employees themselves. It stands to reason, then, that you need to focus on keeping them engaged as well. Taking a page out of Hamill’s book, retaining management for two years per unit directly correlates to a restaurant’s success. Engaged managers are just like other engaged guests: they love their jobs, they want to make guests happy, and they love coming to work each day. Disengaged managers? They’re checked out and waiting for their next job.

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So, what can you do to ensure your managers and shift leaders are engaged and keeping the employees they oversee are engaged as well? Make it clear that management isn’t just there to issue orders and hover over employees, waiting to strike when a mistake is made. Show your managers that you’re interested in their careers, in turn creating a supportive culture that nurtures the careers of FoH and BoH employees.

Transparency, communication, recognition, and even polls and surveys can also build engagement. Today’s employee wants to know what’s going on. Some of the strongest operators share P&Ls with all employees, using them to create goals and rewarding the team when they’re achieved. Another excellent way to engage both management and employees is to give employees a voice. Ask them about their shifts, including what it’s like working with their managers. Share that feedback with management, recognizing the good and creating a plan to deal with the bad.

If you want to retain employees and repeat guests, retain your managers.

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