In this #snack, we will explain what The Great Resignation is, how it’s affecting hospitality and what you need to do right now to make your restaurant the number one choice for candidates in a competitive hiring market.
The struggle to acquire and retain high-quality staff is being felt across hospitality. While it’s always been an issue, one recent phenomenon has piled on the pressure.
The Great Resignation, coined by Professor Anthony Klotz of Texas A&M University, describes the recent trend of workers quitting their jobs due to COVID-19.
This is especially common in industries where hours are relatively long and inflexible, pay and benefits are poor and COVID-19 is a major health and safety issue.
However, all is not lost – let’s not waste a perfectly good crisis!
It presents a perfect opportunity for you to rethink how you hire and develop employees into long term, valuable members of the team.
What is The Great Resignation?
The Great Resignation is an economic trend that happened because of the COVID-19 pandemic. Millions of people across America began leaving their current employer voluntarily at the end of 2020 and the beginning of 2021.
According to the US Bureau of Labor Statistics, the number of people leaving their jobs hit an all-time high in September 2021, with 4.4 million people handing in their notice.
While initially starting in the US, it’s no doubt influenced countries in Europe and other parts of the world.
Recently, a study in the UK found that 7 in 10 people are hoping to move into a new job in the next couple of months.
There are a couple of different factors causing this:
- Perspective shifting from the pandemic – life is too short to stick around in one job
- Inflexible work hours that impact the work/life balance
- Lack of benefits such as healthcare and childcare
- High-pressure environments that cause burnout
- A desire for better work opportunities, higher pay or self-employment
Looking closer at the statistics around The Great Resignation, a common theme starts to emerge.
Hospitality tops the charts when it comes to the number of resignations by industry.
Why is that?
How has The Great Resignation affected hospitality?
A healthy staff turnover rate usually sits at around 10-15% in most industries.
In hospitality, it’s about 80 to 90%.
Looking further into the industry, fast food and fast-casual turnover can sometimes be around 140%!
This statistic isn’t going to be a surprise for you as turnover is typically quite high in hospitality – the difference is now that less and less and people are coming into the industry to replace them.
A younger, less experienced generation is picking up the slack. This can present opportunities and challenges – more of which we talked about here in a recent article.
In February, restaurants saw more of their workers quit than in any other industry. 6% of workers left that month and 1 million workers were hired – down from 1.03 million in January.
The reasons for quitting are largely consistent with other industries. An online publication called The Conversation took a closer look at why this was happening in hospitality.
In a survey of recently departed hospitality workers, they found that health and safety concerns and burnout topped the list of reasons for leaving.
More importantly, they asked what would tempt these workers back.
While most said they wouldn’t return, a few said if they really had to, better hours, increased pay and stronger managerial support would be attractive.
It’s clear as an industry we need to rethink how we attract talent.
In the next part of this article, we will look at five important areas where you can improve.
Rethinking how you hire and retain staff
Making your wage packet more competitive is definitely an important area to look at. Low wages are regularly cited as the key reason workers are leaving.
But it’s not about throwing money at the problem.
Profit margins are razor-thin as it is, so if you’re going to invest in your wage structure, you also need to improve your all-around offering.
A recent BBC Worklife article on The Great Resignation noted that a lot of retail and service workers are moving into office jobs – despite accepting a cut in wages. The driving reason is that these roles offer more benefits, clear career progression and are more aligned with their values.
So here are five important areas to look at when rethinking how you hire and retain staff, namely culture, benefits, career progression, hiring strategy, and technology.
Overhaul and rebuild your culture
Vacancies in the hospitality industry are reaching unprecedented levels. In the UK alone, the number of open roles has risen by 100,000 since early 2020.
This level of increased competition, combined with the rise in power of job seekers in the job market means you need to offer something special to attract the right candidate.
And it all starts with the culture of your business.
Conduct a deep analysis of your culture by gathering feedback from current employees and managers on what it’s like to work there. Ask them to be as critical as possible and make feedback anonymous so they can be honest.
As well as this look at best in class examples such as Shake Shack and In-N-Out Burger to see what’s made them so successful when it comes to hiring and retaining staff.
Benefits are essential
Candidates are now looking for an all-around package in their roles. If you want to remain competitive in the market as an employer, you need to offer something more.
Here is a list of the type of benefits you should consider offering candidates:
- Healthcare coverage
- Childcare assistance
- Flexible hours and a commitment to work/life balance
- Education programs
- Fitness and wellness programs
- Defined career progression
- Performance-based bonuses
Choose the benefits that suit your budget and will be the most attractive to potential candidates. Benefits that eliminate burnout should be prioritised as it’s one of the major factors driving people out of the industry.
Shake Shack, for example, is investing over $10 million into its employees this year. While a lot of this is going into improving wages, some of it is going into better benefits and bonuses for staff and management.
Offer a career, not a job
As we’ve said earlier, high turnover is typical in hospitality.
But one way to offset this is to provide progression for employees in their roles and show a genuine interest in their development. A company that’s done this really well is the American fast-food chain Pal’s Sudden Service.
Harvard Business Review profiled them back in 2016 due to their incredibly low turnover rate. The turnover rate for frontline staff is one-third of the industry average. For managers, turnover stands at 1.4% – an incredible number!
CEO Thomas Crosby revealed the company relies on three main factors to keep this turnover rate low:
- A 60 point psychometric survey to evaluate the best candidates for the role
- 120 hours of onboarding training followed by regular assessments
- Ongoing teaching by company leaders, including reading lists on management and strategy
All of this communicates to the employees that their progression is important and this fosters a sense of loyalty to the company that will keep them long term.
Meet potential candidates where they are
The days of sticking a job posting up in the local paper or on the front window of the premises are over.
Instead, combine this with a strong employer brand online that showcases your restaurant as the number one place to work.
Social media sites such as Facebook, Instagram and TikTok are where potential candidates spend their time. You need to be posting on your page about the benefits of working in your restaurant and show off the kick-ass culture you’ve built.
But there’s no point in it coming from you directly. Gather testimonials from successful employees in your business to show real people who experience it every day.
Outside social media, incentivise employees with referral bonuses. Empower them to play a part in building out a rockstar team.
Use technology for a better employee experience
Technology is now embedded into the most successful restaurant businesses. The days of random spreadsheets, scheduling rosters and countless notebooks are over.
Now, any restaurant company worth its salt runs its performance forecasting, inventory and workforce management on one seamless platform.
Having an easy to use app where employees can do their onboarding, day to day tasks, general admin and work communications will make their daily work experience way more streamlined and less time-consuming.
QSR Magazine highlighted a study recently that said 32% of workers will quit their positions if poor technology stops them from performing in their roles.
Wrapping up
The Great Resignation is in full swing and is causing more issues in an already chaotic hiring landscape.
As with everything challenging though, there’s an opportunity to innovate.
By rethinking how you manage these important areas of hiring and retention, you’ve got a better chance of bringing in the best talent to your restaurant.