Why Half of Your New Hires Could Leave in Less Than a Year

Why Half of Your New Hires Could Leave in Less Than a Year

by | Feb 13, 2017 | Business Toolkit, Management

Some hospitality businesses are beginning to notice a trend. Of all new hires made within the previous twelve months, only half of them are choosing to stay on at their jobs. Most who leave do so before the one-year mark, which adds to the pressure being placed upon businesses. To understand why an online staff management company studied their 2016 employee retention report.

More than thirty thousand employees from almost two thousand small businesses were surveyed. The data clarified the challenges that numerous establishments face in regards to keeping and losing staff.

Hospitality businesses were compared with those in construction and manufacturing, healthcare, and retail. Healthcare retained employees the longest, with the average tenure lasting fifteen months. Retail and construction and manufacturing tied for second with twelve months each, while hospitality only reached an average of eight months.

Employees are in need of incentives to encourage them to maintain a high level of efficiency.

Regardless of the industry, all employees experience “life cycles” throughout the course of the job. The first few weeks – and sometimes months – are spent settling in and learning the required tasks. It is during this time that business owners invest in the worker’s development and training. As the employee learns and grows, he or she gradually becomes more proficient and reaches peak productivity. Employers like to see new hires reach this point as quickly as possible.

However, employees are in need of incentives to encourage them to maintain that level of efficiency. When this does not happen, they begin to disengage from their job. Eventually, they become bored and dissatisfied with their role in the establishment, and many choose to seek employment elsewhere.

Businesses with low staff retention rates see a very short period of peak employee productivity.

Businesses with low staff retention rates see a very short period of peak employee productivity. The business owner spends the time and money for hiring and training, yet within a matter of months, workers disengage and begin to consider leaving the job.

What does this mean for these businesses? Ultimately, it all translates into higher overheads, diminished customer service, lower employee morale, and less focus placed on the business itself. All of these factors can be detrimental to the establishment’s success and future growth.

It can be tough to place a strict figure on hiring and training new workers. Consequently, the true cost of low employee retention is often difficult to identify. Studies in the United States estimate that the cost of replacing a worker who earns $8 per hour sits at nearly $10,000. Additionally, that narrow window of peak job engagement can damage the overall productivity of the business. Too much time is spent managing new hires and recruitment, and disengaged workers can have a negative effect on customer service and loyalty.

One of the main reasons behind high turnover rates in the hospitality sector may have to do with the age of new hires.

One of the main reasons behind high turnover rates in the hospitality sector may have to do with the age of new hires. There is a prominent reliance on the employment of younger workers, many of whom are trying to fit in their work between studying and classes. Several establishments also hire seasonally, which causes a fluctuation in new hires at certain times throughout the year. In hindsight, it really is no wonder why there is such an alarming drain on employees.

So how can hospitality establishments improve employee retention?

  • Do not use the trend as an excuse. While this particular sector is known for high turnover and low retention, simply accepting it as fact puts the business at risk and impedes growth.
  • Look at how it is done in other industries. Most sectors look for employee commitment and skills, not necessarily youthful faces. Some retail businesses actually prefer older workers because they are viewed as more mature and therefore more likely to consistently deliver better customer service. They also tend to be more loyal to their employers than their younger counterparts.
  • Change the overall mindset. Retention should be viewed as a strategic investment for the continued growth of an establishment.
  • Consider offering recognition and rewards to employees. All workers want to be acknowledged that they are doing well at their job. In doing so, it will boost morale and motivate employees to keep performing at their best.
  • Consider promoting the best talent. Most workers want to advance through the ranks rather than return to the same routine tasks for the rest of their lives. Promotions give them the opportunity to develop and can mean the difference between a career and “just a job.”

At the end of the day, a number of new hires will leave early on no matter what. The key is to focus on retaining those that are more likely to stay and optimizing hiring practices so that you’re attracting long-term employees.

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The Life and Times of The Modern Day Chef

The Life and Times of The Modern Day Chef

by | Feb 10, 2017 | Career

Becoming a chef was, and can still be, almost as simple as moving from Point A to Point B. Sure, the going was slow and it was a lot of hard work, but it was fairly straightforward nonetheless. So without further ado, we outline the current life-cycle of the chef.

SPOILER: This isn’t the only option – less traditional paths described below!

Step 1: Culinary School

For a lot of us, this is the part where we realize we aren’t even close to the level of equipped that we thought we were. Not even a little bit. Usually, this manifests itself in the way that you stick out like a sore thumb.

You somehow manage to have the biggest chip on your shoulder while simultaneously having the least amount of preparedness. You bring messiness and dull blades to whatever job you can land, and you figure that those who refuse to hire you will regret it when MasterChef finally calls back.

Your life’s purpose now is to do the most menial work in existence.

Step 2: Prep or Pantry Cook

At last, a job in a real-life kitchen! It takes about half a shift for you to realize that you will not be creating documentary-worthy creations here. Instead, your life purpose now is to do the most menial work in existence and to somehow still manage to mess it up in a very public way.

Thus, no one will like you and any opportunities to remedy the situation by showing an ounce of talent will be foiled by your nerves and lack of experience. Don’t worry – it’s not actually that bad!

Step 3: Line Cook

Whether by divine intervention or perhaps just random chance, you finally are able to edge your way into the line cook’s spot.

Cons: Everyone still hates you and blames you for everything.

Pros: You at least now get the family meal.

In many ways, though, it’s the same song, second verse. Your fantasies of the job had you believing that it would be a platform for you to shine; you would spend hours comparing different tools and reading up on the latest trends. Instead, you make more mistakes than actual cuisine.

Step 4: Stage

There is, perhaps, nothing that you have romanticized more than staging. Like all that came before it, there is not a lot that you accurately assumed about it. You may be in a destination location (and rocking it), but you certainly don’t have the time or money to enjoy it.

Instead, you get as close you’ll ever be to slave labor. You move, for months, through a fog of exhaustion as you work, work, work. Despite this, though, you do learn a lot. Not nearly as much as you claim when you return, but you do learn.

Step 5: Sous Chef

After the first week, you have loads more respect for Tony, your predecessor, who you originally thought was a slacker, but now realize actually just had a ton of stuff to do.

You’re the middle-man. Not like everyone else, but also not The Chef. They need you to run the kitchen, but you can’t quite make it happen by yourself yet. Your clipboard is an extension of your hand, but when you do use your hands to actually cook you realize that while you’re berated less often, it’s much more intense when you do slip-up! The money isn’t great, but now you’re salaried and have benefits and actually feel like an adult.

Step 6: Chef de Cuisine

This is it. The culmination of it all. It’s all yours: the kitchen, the menu, the training, and the responsibility. Right about now you realize that cooking isn’t predominately a means of expression,

It’s all yours: the kitchen, the menu, the training, and the responsibility. Right about now you realize that cooking isn’t predominately a means of expression. Instead you get a high from crafting a meal that connects with your guests. Your life is stable in a way that it hasn’t been previously. You have made connections with others in the culinary world, you are drinking less and working out more, and you’re invested in helping others who are less-experienced.

Your life is stable in a way that it hasn’t been previously. You have made connections with others in the culinary world, you are drinking less and working out more, and you’re invested in helping others who are less-experienced.

Step 7: Opening a restaurant

You’re an ambitious one and couldn’t settle for just the kitchen, you had to have it all, the entire restaurant.

You thought you knew what tired was, but this is something else entirely. This makes you think fondly of the early, easy days when you were being yelled at for such inconsequential things as carrots being peeled too slowly, and burning the orzo at the bottom of the pan.

That is until one of the young prep cooks asks you about your stage, and you’re able to pass on some of what you did learn. And the fact that you have gone almost a month without a day off, pays off: you get a spot on the line as a dinner service meat cook. Plus, the endless parade of construction, meetings, and organizing result in a packed dining room opening week. Well, that and the heaven-sent good review that came just in time.

Today’s chefs walk a wide-ranging variety of paths.

Step… none: Choose your own adventure

Let us be so bold as to say that if you’re lucky enough to walk the aforementioned path, you’re lucky enough. However as we said at the beginning, today’s chefs walk a wide-ranging variety of paths.

Take the Food Network’s Guy Fieri for example, he came to the auditions for The Next Food Network Star in support of a friend, was talked into auditioning, and now his frosted tips are known the world over. While an extreme example for sure, it still is one that could only exist in this current climate where home cooks can become instant stars, and you can be known as a celebrity chef without more than a brief dalliance working in an actual restaurant.

Some possible additional possibilities include:

The TV Chef. Your life mainly consists of PR hustle, Food & Wine events, and navigating investments and endorsement deals.

The Burnout. Just as bad as it sounds, at this point the years of work have taken a serious toll. You’re not accomplishing anything beyond that pack of Marlboros in your chest pocket.

The Comeback. Some manage to lift out of the burnout stage, but usually only for brief stints. The fame you once had gifts you with momentary opportunities, but you’re a little out of practice, which makes things even worse for your already lacking PR presence.

The Food Truck. Food trucks are trendier than ever. They’re the alternative for people who know what’s “happening” since they aren’t spending every spare second prepping their station or planning the menu at their semi-stable job.

The Private Chef. The main downside here is the glares you’re going to get from restaurant chefs at the Farmer’s Market, but the upsides include a hefty paycheck, car allowances, and paid travel.

The Child Prodigy. This kid throws everything we’ve written so far out the window, and trades years of work for good genes and wealthy folks. Cue the collective eye roll of the entire culinary community.

The Corporate Hotel Chef. While it took a lot of cooking to land this gig, now that you’re in it, you’re doing very little in the kitchen. Instead, you’re a spreadsheet master. You use your sizable bonus and comfortable salary as a comfort when you’re annoyed its time for yet another banquet.

So, there you have it. There is no one way, or right way, to become a chef. The path is yours to walk!

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Cost Per Hire: How to Calculate It, How to Control It

Cost Per Hire: How to Calculate It, How to Control It

by | Feb 3, 2017 | Business Toolkit, Management

Cost per hire is one metric that is especially easy to lose sight of and underestimate, as these costs tend to overlap with existing business functions — paying HR staff, advertising, administrative work and so on. When you actually sit down and run the numbers, however, your total hiring costs for any given year can be eye-popping.

As of 2012, the standard definition of cost per hire is the sum of all recruiting costs (both internal and external) divided by the total number of hires. According to the Society for Human Resource Management’s most recent Human Capital Benchmarking Report, the average cost per hire for any type of business is $4,129. However, if you’re part of a large chain (“large” in this case being over 10,000 total employees), then you can expect that cost to be roughly halved.

In the leisure and hospitality industry, which includes restaurants and hotels, this individual cost is likely to be lower than average as the majority of positions are nonsupervisory and don’t have large expenses associated with them like relocation costs or lengthy training. However, because the turnover rate is nearly 50% higher than the average of the private sector, the total cost over the course of a year can definitely add up.

Calculating cost per hire

As with your basal metabolic rate, cost per hire is one of those things that’s almost impossible to get an exact number for, but doing a quick-and-dirty calculation that is close enough to be functional is actually pretty easy.

Here’s the simplest formula:

calculating cost per hire

Keep in mind that costs and number of hires refer should both be calculated for the same period (e.g. month or year).

Internal costs

Internal recruiting costs are expenses “related to the internal staff, capital and organizational costs of the recruitment/staffing function.” These include, but are not limited to:

  • Salary for any related HR and hiring personnel
  • Salary costs of time spent hiring by other staff members (conducting interviews, screening applications, and so on — if this is too complicated, leave out)
  • Any referral bonuses you might be offering to existing employees

External costs

External recruiting costs refer to expenses “incurred to external vendors or individuals during the course of recruiting.” These include, but are not limited to:

  • Fees paid to outside employment agencies
  • Fees paid to post job listings in newspapers or on websites
  • Cost of drug screening and background check
  • Fees paid and materials cost to attend any job fairs or similar events
  • Cost of any required aptitude tests
  • Cost of relocation
  • Cost of any training period in which the new employee is not doing any productive work

Any costs after an employee is hired, such as training, is not included in the cost per hire calculation.

Total hires

The total number of hires could be measured differently across companies. However, these usually include all internal and external hires, both full and part-time, who:

  • Went through a hiring process
  • Temporary staff on payroll and promoted to a full-time position

Divide the total of all the recruiting costs by your number of new hires for that particular time period, and you now have a pretty good idea of your cost per hire, for that time period at least. If you do this on a monthly or quarterly basis, average your totals for a more accurate picture.

Controlling your cost per hire

OK, so you have a better bead on your cost per hire. Now, what can you do to bring it down?

Let’s start by addressing the elephant in the room that we touched on earlier: turnover. After all, if employees don’t leave, you’re not faced with the cost of replacing them. Annual employee turnover in the hospitality industry typically hovers between 70-75%, well above the average of about 45% for all other types of private sector jobs.

Combatting turnover starts with optimizing the hiring process. Many job seekers are now looking for jobs online via job boards and social networks. So why not leverage that to your advantage? Consider using niche job boards, like Sirvo, that not only make it easy for job seekers to apply for jobs but also provide business tools so that better hiring decisions can be made.

Another factor that contributes to turnover is that, for many people, a restaurant job is just something to pay the bills while they pursue their dream, and that isn’t going to change. However, employees don’t always leave because this is just a McJob to them; when they feel that management doesn’t listen or care, then there’s almost nothing to keep them from looking for greener pastures elsewhere. Little things that don’t cost much, like better communication and small incentives such as shift meals and performance bonuses, can go a long way. Likewise, the employee may no longer regard the job as disposable if a clear and realistic path to advancement is presented to them.

At the end of the day, knowing where your business stands in terms of hiring costs is crucial, especially in the hospitality and restaurant industry where employees at the heart of the business. So, get your expenses together and your calculator out!

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Create a Successful Employee Manual With These Must-Haves

Create a Successful Employee Manual With These Must-Haves

by | Jan 4, 2017 | Business Toolkit, Management

Every hospitality business needs a quality employee manual that will allow them to present the information new hires need in order to function smoothly in their new jobs. It’s a handbook for everyone on staff: hosts, customer service, servers, chefs, managers, and those employees who work behind the scenes to ensure that the restaurant runs smoothly. Writing your employee manual for the first time can be a challenge, but this will help make it easier.

A Few Things to Remember

As you’re writing your employee manual, there are several things you’ll want to keep in mind. These include:

  • Most employees will not read the manual cover to cover; instead, they’ll turn to specific sections when they need the information. Make sure that it has a table of contents and an index that makes it easy for them to check out important resources.
  • The employee manual can’t stand alone. Employees will still need to receive training and verbal instruction in critical areas.
  • Create a document that can change according to the shifting needs of your restaurant. Make sure that changing information is presented to all current employees.
  • Keep a copy of the employee manual on hand at the restaurant. Even the best employees won’t keep up with their copy forever.

The Sections

Typically, an employee manual contains several key sections that will make it easy for employees to navigate while they begin their new job. Using a familiar template will make it easier for you to write your manual while simultaneously making it easier for employees who have previously worked in hospitality positions to find the information they need.

The Welcome Letter

Start by welcoming your employees to the business and giving them a sample of what they can expect while they work there. The best welcome letters include a sense of the restaurant’s attitude: for example, a welcome letter for a family-friendly, fun restaurant might read very differently from a welcome letter designed for a formal restaurant.

Important Policies

When a member of your staff opens up their employee manual, it’s usually because they’re looking up a specific policy. These might include:

  • Policies for each type of position/restaurant section; this should include expectations for customer service, front of house, kitchen and bar employees.
  • Emergency policies: How will the restaurant respond in the event of an emergency?
  • Call-out policies: What do you expect of staff members who must miss work for some reason?
  • The policy for swapping shifts: how must it be recorded? If one server or host covers a shift for another, who should they notify?
  • Safety policies and procedures, including any specific things that must take place throughout the restaurant in order to ensure staff and guest safety.
  • Information about performance evaluations, if relevant: how often they’ll occur, who performs them, and what is expected of each employee.
  • What appearance you expect of your staff, including whether or not piercings or unnatural hair colors are acceptable and what type of attire is expected.
  • A discipline policy that covers how issues will be handled throughout the restaurant and how employee transgressions will be dealt with.
  • Cash handling policies, including how cash is to be dealt with and how tips are to be reported.

Employee Benefits

What benefits does your restaurant offer to full-time employees? Do you provide insurance? What about a meal policy? Be sure that your benefits section includes everything your employees can hope to enjoy while they are employed by your restaurant. Being detailed here is a must so there is no confusion about said benefits.

Communication Options

Communication standards can make or break a workplace. If you want to make the most of your restaurant, provide your employees with plenty of opportunities to communicate. This might include phone numbers, email addresses, and how to mention a complaint if they have one. You can also include hours when the owner can be reached for discussion if necessary.

Creating an employee manual is a process. Your manual will change several times over the life of your restaurant. You may learn that you need policies that you didn’t think were worth mentioning or that you need to change your rules to reflect the changing needs of your employees and guests. As you construct your employee manual, however, you’ll discover that it’s much easier to track your expectations and keep your employees aware of the way your restaurant handles specific issues – and that means more satisfied employees who find it easier to perform their daily jobs.

For more useful management resources, check out Sirvo’s business toolkit!

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12 Months of Motivation: What Motivates You?

12 Months of Motivation: What Motivates You?

by | Jan 3, 2017 | Business Toolkit, Career

With the new year upon us, it’s the perfect time to start thinking about what we want to accomplish in the next 12 months. And, that’s exactly why we’re kicking off our new project – 12 Months of Motivation. Each month, we’ll deliver a quote and a few key takeaways meant to inspire you and/or your staff to put your best foot forward, professionally speaking. Print it out, post it up and get the conversation started, whether it’s in your pre-shift meetings, break time or otherwise!

To kick off January’s theme of ‘What Motivates You’, we chose a quote from one of our very own that perfectly sums up what working in hospitality is all about. Dave Query, besides mentoring the Sirvo team, is a hard-hitting industry veteran who has most definitely “made it” in the culinary world. As an industry leader who knows his sh*t, Dave has a singular message about the driving force behind BigRedF, his widely successful restaurant group.

We’re not fueled by glam-celebs and building palaces to dine in but by hard-working and incredibly talented chefs, kitchen, floor, and bar crews putting it together nightly and making an undeniable statement. – Dave Query

This isn’t for show. If you know Dave, you know that the people – both customers and employees, alike – are at the root of his passion. And his passion is at the root of his success.

So, help your employees find their own success in the workplace by using this quote as a starting point to talk about their passions, motivations and work life in general.

Food for thought:

  • What motivates you at work? Is it money, the guest experience, career advancement? There’s no wrong answer here – the point is to be honest and use the answer to your advantage.
  • Why are you working where you are now? This shouldn’t be a hard question to answer and the reasons are the building blocks to your success.
  • What goals do you have for yourself at work? Is it learning new skills or selling a certain amount? How do these translate to the “undeniable statement” you’re helping to create?

Download PNG here | Download PDF here

Now it’s time to…print it out, post it up and get the conversation started, whether it’s in your pre-shift meetings, break time or otherwise! Snap a pic and tag Sirvo (@gosirvo) or use hashtag #Sirvo12 to get your team featured on Instagram!

Or do you have a quote that you use to motivate your team? Send it to us on social media @gosirvo or via email to [email protected] and we might just use it next month and write about your restaurant or establishment!

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