The restaurant industry has a long history of short employee retention spans.

1. Would a Creative
Management Structure Fix
Your Restaurant?
The restaurant industry has a long history of short employee retention spans.
Traditional restaurant models rely on tipping servers, subminimum wages,
and hierarchical management structures. however, this hasn’t often led to
substantial profit margins or employees who want to stick around. That’s why
some restaurants have begun experimenting with nontraditional models in
the hopes of breaking ground on a better future.
When you alter your management style to align with employees’
expectations and create an ideal, even collaborative workplace environment,
you let them know that you’re invested in them. In turn, they’re more likely to
put in a greater effort for you. The restaurant industry can be a sustainable
career with the right compensation—and that doesn’t just mean monetary
benefits. Here are just a few creative approaches that let staff members know
you’re in it for the long haul with them, so you can reduce turnover and
improve your operations and bottom line.
Creative Management Structures
The model you choose influences hiring and retention rates as well as
employee morale which in turn has an effect on customer service, and thus
your profits too. There’s a lot of dominos that get knocked over with any given
management structure, so it’s important to choose correctly.

2. Benefits
Health, vision, and dental plans are pretty far and few between in the
restaurant industry. Most of the time, workers don’t get a benefits package
when they rehired. In a tight labor market, you’ll want anything that
improves recruitment and retention. Offering benefits gives you an edge on
the competition helps you stand out, so employees will want to hitch
themselves to your wagon.
Safe and Inclusive Environment
According to a 2019 report from the Bureau of Labor Statistics, the restaurant
industry’s annual turnover rate is 74.9%. That’s insanely high, and part of it is
because of the low pay and poor treatment workers receive on the job. Thus
fostering a better workplace environment is hugely beneficial for everybody;
employees who feel respected and safe tend to stick around, especially since
that type of workplace is so hard to come by.
It begins at the hiring process. Hire diversely to bring more voices to the table
and understand their needs and interests. You can partner with certain
organizations that place refugees, ex-cons, and people from the foster system
into restaurant positions to open up such a dialogue. Then educate your staff:
Host cultural, diversity, and sensitivity orientations as part of their job training
so they have a rubric for behaving appropriately with coworkers and guests.
This will promote inclusivity and empowerment amongst your staff.
You should also take steps to combat sexual harassment in the workplace.
The restaurant industry is a notoriously popular employer for women and
immigrants, who are at greater risk of mistreatment from customers. They’re

3. also the ones who tend to face the consequences of others’ bad behavior.
One restaurant implemented a three-light system in response to this issue,
where staff members simply notify the manager about a bad situation by
telling them a color. Then the supervisor handles it, no questions asked.
Yellow means uncomfortable looks or a bad feeling, where servers can
request supervision or a new table assignment if they so choose; orange is for
questionable comments or gestures, and the manager automatically takes
over the table for them; red is an escalation of too many orange flags,
inappropriate comments or touching, and leads to the customer being
immediately removed from the restaurant. Staff members don’t have to
justify or explain the colors they say, so they feel safe and empowered to raise
concerns whenever they arise.
Open-Book Management
This model creates an open dialogue between workers and management,
thus fostering trust and communication. Basically, upper management tells
the employees everything about their revenue and business structure so staff
members see how they each fit into the bigger picture; they understand
exactly how their position helps out the restaurant on a larger scale, which
encourages greater investment in the establishment. It also lends you more
credibility as a manager because they can see how much you’re really taking
home at the end of the day, as opposed to blindly assuming that you make
bank while they scrape by on below-minimum wage.
Of course, this structure comes with some extra accountability on your end
but it also lends staff greater job security, provides you with lower Costs of
Goods Sold, and higher staff retention.

4. Employee Profit-Sharing
Also known as revenue-sharing, this model encourages work through
incentives. Essentially, employees get extra payment on top of their regular
compensation and bonuses depending on the restaurant’s profitability in any
given time frame. This type of reward system doesn’t have to go hand-in-hand
with open-book management but it often does, since everyone directly
benefits when the restaurant does well—and they can see exactly how certain
behaviors influence profitability, too.
Gratuity-Free
Also known as tip-free or hospitality-included, this model eradicates the usual
tipping structure. Instead of letting servers take a little extra home while
getting paid a suboptimal wage (the federal tipped minimum wage is $2.13),
restaurants instead pay a living wage and health insurance.
Lower wages go hand-in-hand with employment discrimination and
harassment, particularly because the restaurant industry is staffed by a lot of
vulnerable, marginalized people. Without a living wage, they don’t have
enough stability to speak up about disrespect and unfair treatment.
Gratuity-free service models give workers more power to set boundaries and
cultivate a safe work environment. There are still only a couple hundred
gratuity-free restaurants in the U.S.A. today, but the idea is gaining traction as
workers increasingly get on board with it. The more contended your workers
are, after all, the better your customers’ experiences will be.
Mission-Driven Community Advocacy

5. A profit-share model—profit-share, not profit-sharing—connects employees
around a good cause. Talk to your staff and determine what really matters to
them, and then donate a portion of your proceeds to that cause or people in
need in your community. Not only does this bring your employees closer to
the business, encouraging them to work harder because they’re working for
charity too, but it improves customer relationships when they know you’re
involved with community action.
Which Model Is Right For You?
Like all else in business, there’s no one-size-fits-all solution. Different models
work for different restaurants. Don’t be afraid to test out different systems,
talk to your staff and customers, and see what’s most likely to get employees
motivated and excited to put in a hard day’s work. With a management
model that breaks from tradition, you’ll improve employee morale, better
customers’ experiences, and see your profits skyrocket.