51ÔÚÏß

The restaurant industry is seeing positive momentum as turnover rates for hourly employees drop, according to the latest research from Black Box Intelligence.

DALLAS, Oct. 8, 2024 /PRNewswire-PRWeb/ -- The restaurant industry is seeing positive momentum as turnover rates for hourly employees drop, according to the latest research from Black Box Intelligence. The report also suggests that competitive compensation and more diverse management can play key roles in improving employee retention.

reveals that while management turnover remains higher than pre-pandemic levels, restaurants offering top-tier salaries—particularly for General Managers (GMs)—are seeing 6% lower turnover compared to their lower-paying counterparts. And - perhaps unsurprisingly - restaurants with lower turnover levels perform better when it comes to traffic and sales growth.

Additionally, restaurants that are cultivating diverse teams are reaping rewards, with brands closer to gender-balanced management reporting higher sales, traffic, and significantly lower non-management turnover.

Victor Fernandez, VP Insights at Black Box Intelligence comments:

"Lower employee turnover clearly correlates to higher traffic and sales - while the costs of replacing staff is continuously increasing - so restaurants need to balance the obvious need to minimize costs with a strong focus on employee retention."

"At all levels, compensation is consistently the leading specified reason for leaving a job, for both Front and Back of House roles. So - while far from easy - restaurants that prioritize being competitive on base pay, bonuses and employee benefits will continue to outperform their peers."

"Our research shows that the restaurant industry is becoming more diverse, and continues to prove to be more diverse than the US population at large. It's interesting to note that restaurant units with a management team that better reflects hourly employee diversity from a racial/ethnic standpoint are performing better on both traffic and sales."

Key Findings

Hourly employee turnover easing but management turnover remains high:

• Hourly roles: Limited service turnover for hourly employees peaked in Q1 2022 at 173% but was down to 135% in Q3 2024. In full service, turnover for hourly employees peaked at 125% in Q4 2021 and Q1 2022 but was down to 96% by Q3 2024.
• Management: Limited service turnover at management level is at 55% for Q3 2024 compared to 45% in 2019. In full service, the respective numbers are 38% in Q3 2024 vs 31% in 2019.
• Cost of Turnover: Average "hard costs" (separation, replacement and training) to replace hourly staff now at $2,305, Managers (Non-GMs) at $10,518 and General Managers at $16,770.

Employee turnover has significant impact on financial performance.

• Difference in same-store traffic growth for restaurants in the top quartile vs bottom quartile for turnover:
• Full Service Back of House: +5.0%
• Full Service Front of House: +7.1%
• Limited Service Team/Crew: +1.3%

GM compensation on the rise; higher salaries correlate with lower turnover.

• National median GM compensation by service type:
• Full Service: base salary up 3.8% YoY and annual bonus up 16.9% YoY, with overall comp up 5.9% YoY.
• Limited Service: base salary up 2.2% YoY and annual bonus up 11.7% YoY, with overall comp up 3.1%
• Restaurant units in top 25% of GM salary levels in a given market have 6% lower turnover than those in the bottom 25%.

Restaurant workforces becoming more diverse, which is proving good for business

New hires 2024 YTD for hourly employees (as at end of August) are:

• 35% African American, 5% Asian, 26% Hispanic and 34% White in Limited Service.
• 21% African American, 2% Asian, 29% Hispanic and 48% White in Full Service.

The percentage of new employees that are African American or Hispanic are higher than the population at large.

• Limited service brands where gender closest to 50-50 split in management positions:
• Generate 2% higher sales
• Generate 5% higher traffic
• Have 23% lower non-management turnover.

About the Research

The Black Box Intelligence State of the Workforce 2024 research was shared in detail in the recent webinar of the same name (). The findings were drawn from the company's annual , which featured compensation, bonus, benefits, turnover, hiring, diversity and hiring trends collected direct from 158 restaurant brands, along with the extensive workforce benchmarks it routinely captures.

About Black Box Intelligence

is a data and technology company serving multi-unit restaurant businesses. With a history built on drawing on financial performance and workforce intelligence from a network of 400+ restaurant brands, it now combines the best benchmarking in the industry with experience management and guest sentiment measurement technology to provide a clear and quantifiable roadmap for operational success.

For more information:
Andy Smith
CMO, Black Box Intelligence
[email protected]

Media Contact

Andy Smith, Black Box Intelligence, 1 3128029846, [email protected],  

SOURCE Black Box Intelligence