What is TURNOVER costing you?

written by Leigh Ann Teubert
Director of Client Relations – Horizon Hospitality

No one likes change in staff, including your customers!  When a guest walks into your operation and sees the same happy people, it increases their feeling of comfort and confidence and makes them want to come back again; or better yet, tell all their friends about their great experience.

How is turnover impacting your business?  What is your annual turnover percentage (do you even know)?  Ironically, most hospitality businesses don’t calculate turnover nor do they look at it as an “expense area.”  Most see it as just the “cost of doing business.”  If you are one of those people – STOP – and reflect on the real impact that turnover has on your operation!

I could ask you all day long about food cost or labor cost – those things are imbedded in your brain…but turnover percentage?!?  The fact is that hospitality businesses should be consistently looking and monitoring their employee turnover – it is a huge factor in your success – both financially and operationally!

Calculating employee turnover is simple.  For those who do not know this formula, I have provided an example below:

  1. Total # of employees with wages during the prior 12 months = X
  2. Total # of employees who left (for any reason) during that same time frame = Y
  3. Divide Y by X = Z
  4. Multiply Z times 100 = Your Turnover Percentage

Hiring the RIGHT PEOPLE in the first place is your first step to reduce employee turnover! 

  • Are you asking the proper Behavior-Based Interview Questions to determine what would make someone a good fit for your operation?
  • Are you conducting Background Checks, Reference Checks and Behavioral Assessments to uncover any “skeletons in the closet?”  NOTE:  Many companies don’t believe that you can get a comprehensive reference from a prior employer – that is a myth.  We dig up interesting details all the time when conducting reference checks!

Food server turnover in the hospitality industry is averaging 110% with a Turnover Cost (to you) which ranges from $3,500 to $7,000.  Management turnover is averaging 28% with a Turnover Cost (to you) which ranges from $15,000 to $20,000.  These are expenses/costs that directly impacting your financial performance!

SO…is it important to gain a better understanding about turnover and how it impacts your operation?  ABSOLUTELY!

Horizon Hospitality focuses on providing our clients with exceptional culinary and management talent along with providing the most effective pre-employment screening tools for the private club, restaurant and hospitality industry.  Making a small investment to hire the “right” talent will result in a significant $$ savings in turnover!

If you have any questions or would like assistance in reducing your turnover contact Horizon Hospitality today at (913) 897-3100, ext. 11 or email [email protected]

|