How to Calculate your Restaurant Turnover Rate

Restaurants have the highest industry-wide turnover. Experienced restaurant owners recognize the value of monitoring their turnover rate. Not only does it give the restaurant industry a terrible reputation, but it also has an impact on every aspect of your company.

Therefore, if your restaurant can retain workers at a higher rate than competitors in the industry, you’re already in an advantageous position. 

Your major goal should be to maintain your workers since doing so will have a positive influence on your budget, guests’ experiences, and workplace culture. 

How do you estimate your turnover rate, then? This guidebook will address all you need to know, along with some proactive techniques to lower turnover in your business, to help you bring your turnover rate to the level it needs to be.

What Is Restaurant Turnover?

Let’s first define what the restaurant turnover rate entails before moving on. 

An estimate of turnover is the number of employees who leave a company during a predefined timeframe, either by resigning or being dismissed. 

Restaurants often experience a greater turnover rate than other sectors, although it varies by venue type. The large percentage of seasonal employees and students employed in the sector is another factor that contributes to a high turnover rate. 

As many might know, staff retention is a challenging task. Some restaurants are fortunate to have a committed team of workers who stick around for much longer than a year. Others appear to rotate the staff every week.

Why Is Restaurant Turnover Troublesome?

For several reasons, turnover is troublesome in the restaurant sector.

The Cost Of Restaurant Turnover Is High: 

Every stage of the recruiting process has a price tag, including productivity loss, posting a job, reviewing applicants, conducting interviews, onboarding, and training. 

Restaurants spend valuable resources on hiring new staff members who are likely to leave soon. After all, the typical employment period for restaurant staff is only 56 days!

If your business loses twelve workers in a year, you will have to spend a lot of money hiring new staff. Instead of merely keeping the firm viable, the money may be used to fund growth-oriented projects.

Restaurant Turnover Lowers Organizational Productivity:

Restaurant businesses have challenges as a result of the high turnover rate in the sector, which costs them cash and negatively affects culture and productivity. 

Employees lack a feeling of belonging when they are unable to form a community due to transiency. High levels of employee engagement at work result in employees who go above and beyond what is required of them and who genuinely increase income.

The Working Environment Suffers As A Result Of Restaurant Turnover:

Staff who are frequently moving about won’t feel obligated to get to know their coworkers. However, studies suggest that fostering a feeling of belonging in the workplace produces greater results.

Why Should Restaurant Owners Know Their Employee Turnover Rate?

As a restaurant owner, you must certainly be aware of how turnover impacts the sector, but are you also aware of how it affects your particular establishment? 

How does your business stack up against the alarmingly high restaurant turnover rate? Knowing your restaurant’s turnover rate will help you battle it more effectively. How? You may use your present rate as a baseline to assess your turnover over time if you are aware of it.

Say you compute your turnover rate and discover it to be 50%. You don’t take any proactive measures to combat turnover because this figure appears to be excellent in comparison to the industry average. However, as a result of this complacency, you discover that your turnover rate has peaked at 80% after a year.

You must find out what is motivating workers to leave and take action to stop it from occurring again by monitoring turnover over time.

How Do You Estimate Your Restaurant Turnover Rate?

Choosing a time range is the initial step in figuring out how to estimate turnover. Choose a year and then examine turnover on a monthly or quarterly basis to see how it has changed if you want to match it to the industry standard. 

How To Determine The Turnover Rate Or Percentage Is As Follows: 

To obtain a percentage, divide the count of departing employees by the typical count of new hires required to fully staff your restaurant, then multiply the figure by 100.

Alternatively, if you know roughly how many individuals are necessary to fill a position, you may approximate it by multiplying by double the count of employees you have at the beginning and end of a term.

The following formula may be used to calculate your turnover rate: 

(Count of departing workers / Total count of workers needed to staff the restaurant) * 100

Let’s say, for illustration, that you might need 30 individuals to service your restaurant completely. Let’s imagine that 25 customers have already departed your restaurant at the height of the Christmas rush.

The equation will be written as:

25 * (the count of workers who has departed) / 30 * (the count of employees it takes to staff the restaurant).

You will get 0.833 when you divide the two. By multiplying this by 100, you can convert it to a percentage, giving you an 83.3 % turnover rate.

Facts About The Restaurant Turnover Rate

  • Any small enterprise must constantly worry about staff turnover, but in the restaurant business, it may seem like a never-ending cycle. 
  • Staff members from the front and back of the house are essential to providing unforgettable service. 
  • Lightspeed analyzed data from a database of more than 10,000 customers and discovered certain important tendencies based on compensation, roles, and location that affect the turnover rate of restaurant personnel.
  • High turnover rates among restaurant staff provide undesirable distractions for owners and managers, as do constant hiring, high training, ramp-up expenses, and a lack of institutional memory retained by long-tenured staff.
  • Employee turnover is higher among front-of-house personnel, including restaurant personnel in the kitchen and front-counter staff.
Ways To Decrease Restaurant Turnover

Knowing how to assess your restaurant’s turnover rate can help you determine whether it is necessary to make any adjustments to keep the staff from leaving. 

We discuss a few tried-and-true methods for lowering staff turnover in restaurants below.
  • By making the appropriate initial hires, you may redefine your recruiting approach. Consider recruiting based on values instead of just experience when making employment selections. This will assist you in eliminating applicants who lack enthusiasm for your restaurant’s core mission and its core principles.
  • While it is true that employing the appropriate personnel makes things simpler, recruiting only accounts for half of the restaurant turnover problem. To ensure that new hires begin their employment with the proper foundation, it is also essential to do proper restaurant onboarding.
  • Look for expertise regularly rather than only when you’re in a rush to fill a post. And setting up an employee recommendation program for your company is one of the quickest methods to locate new hires.
  • Monitoring employee performance and doing frequent check-ins with staff members are two of the finest ways to find problems with your existing business.
  • Your staff might not be accustomed to the technology at your restaurant, even if you probably are. So, prefer employing easy-to-use restaurant POS software.

Wrapping Up:

While calculating restaurant turnover is straightforward, it is still necessary to keep track of the count of employees who have left and those who have been hired.

To automate this process, it would be ideal if you utilized labor management software that is integrated with the POS at your restaurant. The ability to measure the turnover rate and analyze the data will, in the end, change the way you view your business.

Contact POSBytz if you’re seeking a solution to improve your business processes and foster an atmosphere where your workers will want to stay. Operational efficiency is higher than ever thanks to our POS system for restaurants that lead the sector.


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