How is your employee retention? In the five years since the pandemic, restaurant operators have had to revamp how they attract and retain employees. As hiring is still a challenge, many are leaning into financial incentives that are hard to leave behind.
Michael Shemtov, whose company runs seven restaurants in Atlanta, Charleston and Nashville, said his restaurants include a “healthy hospitality” surcharge to every bill (currently 2.2 percent). This allows them to pay 70 percent of every employee’s health plan (up from 50 percent before the pandemic). Staff are also auto-enrolled in a retirement savings plan and offered a maternity/paternity savings match. “My thesis is that if I can get them to save $4,000-5,000 in a retirement account, then they’re really going to think hard about leaving me for another job,” he told Eater.
Stock options are another strategy. Brands like Shake Shack and Macaroni Grill have adopted this approach to boost retention among their management teams. Sweetgreen also offers equity incentives to salaried team members. They position this benefit as part of a larger effort to attract long-term employees – and they link equity to performance and contribution.
Beatnic, a vegan restaurant, introduced industry-leading paid parental leave in 2022 for all employees – full-time and part-time – including miscarriage leave under their bereavement policy. Granted, not every restaurant can make such incentives work financially. But at a time when talent is harder to find (and expensive to replace), what creative adjustments you can make to your benefits that might make it more appealing for people to stay?

A recent report about foodservice employment offers reasons for optimism: Research from payroll services provider ADP found that employer investments in retention are paying off for workers in leisure and hospitality. In the first post-pandemic years, job-switchers were seeing more pay gains than existing workers, but that has changed. In September of this year, for example, year-over-year pay levels for workers who had remained in their job were up 4.6 percent, compared to a 3.3 percent increase for job changers, the report found. It’s evidence that employer efforts to recruit and retain employees are gaining traction.
If you’re looking for new ways to boost retention in your business, there are actions you can take beyond wages. Offer flexible schedules – and grant staff agency to select and swap shifts as needed. Measure performance across a range of benchmarks – like earning positive guest feedback, going the extra mile to help a colleague, or supporting food safety efforts – so staff have ample opportunities for recognition. Offer financial flexibility through earned wage access. Nurture an inclusive, engaged culture – by hosting staff gatherings to build team morale and planning volunteer efforts in the local community. Provide a strong induction program, then follow it up with regular feedback, recognition, and development-related support in one-on-one meetings and team settings. Show staff how to rise in the ranks: When staff understand the path to advancement and what they must do to follow it, they have more reasons to stick around. This (along with other efforts including those above) has historically helped restaurant brands including Lettuce Entertain You achieve high employee retention rates.

When the airline JetBlue was first founded and began screening candidates for its flight crew, one of the people they hired was a former fireman. He didn’t have experience working for an airline but, having rescued people from burning buildings, he understood how to care for people. A similar hiring approach might be helpful in the foodservice industry, where labor is a perennial challenge. While human resources experts tend to agree that a 10-15 percent annual turnover rate is healthy across all industries, the Bureau of Labor Statistics has found the average annual turnover rate in the foodservice industry to be nearly 80 percent over the past decade. That makes it especially important to be able to attract and retain the right staff.
Yet the latest methods for recruiting and screening potential candidates may be leaving talent behind, according to a recent roundtable discussion held by the Institute of Hospitality. Specifically, the use of conventional HR practices, paired with artificial intelligence to screen candidates, may be detrimental to certain candidates who can perform well in their job but have invisible disabilities or conditions that affect social interaction or communication. As a result, something as routine as a group interview or a trial shift might introduce barriers for a candidate who could perform well in a role. AI-supported screening systems can compound these issues by overlooking transferable skills from outside of the industry – or by misinterpreting facial expressions or communication styles. Similarly, recruitment or training materials that aren’t in a candidate’s native language may present barriers too.
Looking at your recruitment processes, are there opportunities to broaden your scope when seeking ideal candidates? Do the tools you currently use to identify candidates inadvertently screen out people who, with training, could bring valuable skills to your business?

November is among the peak months for hiring foodservice staff. The people you bring on board now will help see you through the festive season and help set the customer service standard your guests will expect from you in their return visits in the New Year. But at a time when the average annual turnover rate for the restaurant industry hovers around 80 percent, operators also can’t afford to spend too much time sorting through the candidates who will be the face of the brand. A recent report from Modern Restaurant Management suggests some helpful interview questions that can help you get to the heart of a candidate’s skills quickly. For example, asking a candidate to describe a time when they had to explain something complex to a coworker or customer can demonstrate how well they provide information, listen, and clarify an issue without getting overwhelmed and frustrated. Asking them to share an example of when something went wrong at work and how they responded can help you understand how they approach unexpected problems. Having them describe an encounter with a difficult customer can help you evaluate their level of compassion and ability to de-escalate challenging situations. Then once you have new talent on board, you can work to retain them. (If you’re looking for inspiration, four brands that have been standouts in this area are Five Guys, Chipotle, Union Square Hospitality Group and Lettuce Entertain You, according to Boston University’s School of Hospitality Administration.)

Employee turnover in the hospitality industry hovers around 74 percent, making staffing a perennial challenge for operators. While employee compensation and benefits are important to attracting staff, they may not have as much power as more human elements of employee retention. That came through during a panel discussion at the National Restaurant Association Show earlier this year, where restaurant operators with higher-than-average retention rates spoke about how they find and keep talent. As Foodservice Director reported about the discussion, operators emphasized the importance of figuring out your message before recruiting, having a people-first mentality, and offering a clear career path. Operators who do this know and understand their brand purpose and message before hiring, ensure employees know ​what the business stands for, and illustrate how each employee’s role contributes to that message. They lift up the team over the individual, taking politics out of the equation by supporting each person’s value to the team. They also prioritize hiring from within and showing each person a roadmap of where the job can lead.  

In a recent podcast, Ed Daugherty, executive campus chef/regional director of dining at the University of Tulsa, demonstrated how he uses all of these approaches – and has achieved 71 percent employee retention as a result. During a multi-part candidate interview process, he focuses on the organization’s core values and on finding candidates who possess related traits: friendliness, teachability, and a “willingness to do the next right thing” over cooking skills, for example. As soon as an employee is hired, they are wrapped in the message that they belong there – through pre-shift huddles, promotion of employee wins, the sharing of staff ideas and feedback with management, the celebration of employee milestones, and the use of multiple communication channels to share ideas and promote staff successes. Each month, managers nominate employees of the month for a random gift drawing and must explain why the person is valuable to the team. Their comments are shared with the employee whether they win or not – and winners come from across the larger foodservice operation at the university, highlighting roles and opportunities that employees can consider in their longer-term career plan.