There is a popular notion that customers keep a business’s door open. That couldn’t be further from the truth.

With so much talk on the customer experience, no one has paid much attention to the employee experience. And it’s proven costly.

Whatever you want to call it – employee attrition, turnover, churn rate – it’s occurring at such an alarming rate that employers are scrambling to fill open positions in every sector of the hospitality industry.

What’s really going on?

A recent article by the LA Times, “Employees Are Quitting, Sometimes Without Other Offers. What Can Companies Do to Retain Staff?” claims employees aren’t quitting their jobs for better pay. The article cites a survey of both employees and employers, and the results suggest there is a major disconnect in how employers view this mass employment exodus.

The data doesn’t lie.

In the survey, more than half of the employees who already quit their job said they did so because they didn’t feel valued by their bosses or organization, not because of compensation.

This means employees aren’t jumping ship for better pay. In fact, the article cites a staggering 40% of employees that recently quit their jobs didn’t have a new job secured before leaving.

This may come as a surprise to some managers, but a time where American workers are reprioritizing what is important in their lives, it’s safe to say a paycheck isn’t going to cut it any longer. Employees yearn to feel like a valued member of the team. They don’t want to work in what feels like a toxic environment. They are actively seeking out job opportunities where they can advance within an organization, and they want to contribute to the greater good of the company they work for.

In short, employees want a purpose. And you can give it to them.

Right now, the balance is tipping in the employees’ favor. Like salesmen, managers must set themselves apart from the competition. How can you gain an advantage needed to retain a full staff, so your operation doesn’t suffer?

Develop a differential advantage.

Maybe your operation can’t afford to offer higher wages or benefits in the form of insurance, retirement, profit-sharing. The good news is (according to the LA Times survey data) you don’t have to.

What you ought to do is consider the ways that might appeal to the values and needs of your employees.

Consider these options:

1. Conduct an employee satisfaction survey (just like with customers, you need to know your employees’ true perceptions and not just guess).
2. Implement an employee recognition program to acknowledge a job well done.
3. Enhance existing training programs so employees feel confident and comfortable with company expectations, standards, and procedures.

It’s worth emphasizing to managers that this is nothing new. For decades, employees have left companies for these exact same reasons, but the numbers have exacerbated considerably over the past year.

This isn’t a war on wages. If we’ve learned anything from the pandemic, it is this: we all want to feel as though our lives have value and meaning, inside and outside of work.

Don’t miss an opportunity to show that to your employees.

It seems the restaurant industry just can’t catch a break.

If you’ve been out and about this summer, you may have seen signs popping up in storefronts and restaurants saying something along the lines of, “The world is short staffed. Please be kind to those who showed up.”

Well, there’s a reason for it.

Still reeling from the obstacles presented by the COVID-19 pandemic, most restaurant operators are trying to recoup financial losses from lockdowns, overcome food shortages and backed up supply chains, and triumph in the face of a very real labor shortage. To top it off, now we are seeing increasing reports of customers behaving quite badly.

It’s a lot to take on, particularly for front-line staff.

Anyone who’s ever worked in the hospitality industry knows difficult customers are nothing new, but in a post-pandemic world, the intensity of these encounters can feel overwhelming and undeserved.

In a recent article by SFGate called “SF Bay Area Restaurants Are Still Struggling. Returning Customers Don’t See That,” Madeline Wells details some of the unpleasant incidents experienced by restaurant staff throughout the San Francisco Bay Area. The article includes anecdotes of customers yelling and being openly rude or leaving unwarranted negative online reviews and filing fraudulent claims with their banks as retribution. One bakery owner put it in simple terms by saying there’s been “a huge rise in people just forgetting to be human.”

Food shortage, labor shortage, and now a shortage of kindness.

So, how can you help your team avoid burnout from unpleasant customer encounters? Part of the solution is acceptance; the same challenges that existed yesterday will still be here tomorrow. Your customers’ behavior is not likely to change right away, so accepting that these types of encounters may still occur is the key.

Next, create a culture of compassion.

Show your team that you care about them and, at the same time, find meaningful ways to encourage them to pay it forward. If your team can extend compassion and patience to a demanding customer, a positive shift can happen all around.

Keep in mind, your employees and your customers have gone through a lot since the pandemic started. We know that COVID-19 has increased the demand for mental health support and services, and many have struggled in ways that we will never know – isolation from family, loss of employment, sick loved ones, and a very real fear of a future that is still unknown.

Most importantly, remind your team that they are not the actual target of the anger or frustration. Encourage them to do their best in handling the situation, and also empower them to recognize when the issue should be escalated to a manager.

We can’t be expected to know the motivations behind a customer’s angry outburst, but we can rely on compassion, patience, and kindness in handling the encounter.

Remember, a little tenderness can go a long way.

As restrictions surrounding the pandemic ease across the country, many Americans are ramping up to return to “normal” life. This means dining out, going to meet friends for drinks, summer leisure travel. It’s what we’ve all been waiting for, so what could go wrong?

Quite a bit, actually.

Imagine walking into your favorite restaurant on a Friday night after months of waiting to go back and order your favorite meal. You (and countless others) are brimming with excitement at the chance to go back to life pre-pandemic. But you notice service is slow, employees are frantically running around managing tables, and the food doesn’t taste quite like you remembered.

What gives?

According to a recent Bloomberg News article, a staggering 50% of U.S. hospitality workers said they wouldn’t return to their old jobs, even if they received more pay. Of the restaurant, bar, and hotel workers surveyed, a third aren’t considering reentering the industry. Ever.

While turnover has always presented a challenge in the hospitality industry, it feels different in 2021. Before the pandemic, the turnover rate in the hospitality industry hovered at 78.9% in 2019. In 2020, that number surged to 130.7% – with troublesome implications for the future, to say the least.

But the country is reopening. Isn’t this a good sign for the industry?

A survey conducted by the Labor Department reveals that job openings in the hospitality industry hit a record number in May, meaning employers are still struggling to fill spots. To be fair, it is a considerable challenge to transition gracefully from a 5-year low in unemployment and increasing minimum wages to a historic loss of 7.7 million jobs lost in a matter of months.

Moving forward, companies must tackle these challenges head on. In March 2021, only 28.4% of restaurant operators were employing 80-100% of their pre-COVID employees. That means over 70% of restaurants are forced to do more with less.

If companies can’t find a way to improve employment rates, there may be a challenge in meeting the surging demand of customers, which will hinder the overall recovery in the industry.

If the Bloomberg News article is right, then employees are looking for higher pay, a less physically demanding workplace, and better benefits. Maybe this isn’t achievable at your company, at least not right now. That doesn’t mean you can’t position yourselves to attract more employees.

One thing is for certain: in a post-COVID world, you can’t afford to lose more employees if you want to keep your customers happy.

It’s safe to say that a full recovery in the hospitality industry will take years and will require developing a robust strategy to attract and keep top talent.

What will your strategy be?

One of the largest problems the hospitality industry has in its recovery efforts after COVID is the re-hiring process. Many are quick to blame the problem on the money supplies for those on unemployment and the level of laziness it has incurred. For some, that may be true. The majority of the problem, however, has actually been found to be from two more unlikely sources.

The Problem

Schools were hit the quickest, the hardest, and the longest by the pandemic. By ripple effect, all working parents of school-age children were hit to various degrees. Mostly, the mothers. “Around 10 million U.S. mothers living with their own school-age children were not actively working in January — 1.4 million more than during the same month last year,” according to new U.S. Census Bureau data. This was mainly due to the fact that they had to provide care for the children that needed care and school help during distance learning. With no specific promises of schools returning to normal after this summer break, many mothers are putting off returning to work indefinitely.

Also, many Baby Boomers have decided enough is enough. They have been working most of their lives and after dealing with the pandemic crisis, a good majority are deciding to retire. Since February 2020, the number of retired Boomers has increased by about 1.1 million according to this article. That not only reduces the workforce numbers in general, but it also cuts out a significant number of qualified and experienced workers. This means more training and support will be needed in the workplace and those who would usually provide that training and support will not be there to provide it.

Between these two factors, businesses looking to return to 100% workload will be lucky to have access to 50-75% of workers to complete that workload – especially in all levels of the hospitality industry. This will require companies to get inventive about their hiring processes and to be diligent about monitoring the new hires (and even return hires) they employ.

This article by The Restaurant Practice Leaders defines how it is important to “identify ways to use tech to optimize and support the makeup of your current team, automate tasks that don’t require the human touch, gather data to make better decisions, fix broken aspects of the candidate experience, more intelligently assess and prioritize candidates, and implement “COVID-19-friendly” solutions such as assessments and video interviewing capabilities.” It also talks about how some companies like YumBrands! (Taco Bell, Pizza Hut, KFC, Habit Grill, etc.), are providing funding for education and investing in skills training to empower employees.

Two-Step Solution

Companies who want to gain the advantage during the rehiring spree will need to implement a two-step approach for their employment methods. The first is to ask your new team how safe they feel, how confident they feel in their training, and how prepared they feel in their positions. The trick will be to provide the employees with a safe method of airing their feelings about these questions. Internal Audits through a third-party company are the easiest, most cost-effective, and most reliable way of gathering this important information.

Secondly, companies must ask their customers how they feel the new and returning employees are doing. Using a mystery shopping company has been a proven method for gaining valuable information from those who will be affected most by the rehiring period. Ask those visiting your locations whether the employees have the knowledge they need, if the employees are implementing your step-of-service properly, and if the customers feel they were given appropriate levels of customer service.

Using a company that specializes in two-fold data collection processes, like MSI, will not only help you gather this necessary information, but will also help you dive into the data to find the right steps to correct any identified areas of need of improvement.

Loyal Customers Are Key

Spending more money on building customer loyalty is more critical than spending money on marketing. That is not speculation, it is proven fact! Companies who focus their attention on current customers, like business giant Amazon, will be the ones who succeed in the long run. Take a look at the following ten statistics if you have any doubts:

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Finding gaps in your processes can be an opportunity to engage with staff and improve customer experience.

A Measure of Excellence

MSI has sent evaluators into hundreds of businesses and institutions that range from hotels, restaurants and retail stores, to hospitals and health care centers. Our question sets, and the data our evaluators return, have informed management and C-level leadership since 1954, helping them shape the strategies that guide consistent service and ambiance.

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As a manager or owner of a company, how do you know that your team members are doing everything they can to give your customers the best experience, every single time they come into your store or business? Have you ensured that your staff are effectively trained and have you implemented proper monitoring procedures to hold them accountable? If you answered no to either question, it might surprise you to learn that companies who increase their training budgets see increases in their profit margins as high as 24% (Business Training Experts).

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According to IRC Sales Force, only 2% of sales are made in the first point of contact. That means that the follow-up is just as important as the first impression. The same study reports that up to 50% of people would buy from the first vendor to respond to an inquiry. So you must not just follow-up, you have to be quick about it!

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Does your company have steps of service? Silly question, right? OF COURSE, you have steps of service. From a one-man operation to a huge conglomerate with a myriad of employees, you must have specific steps taken with each patron in order to for your business model to work. Even resellers, B2B businesses, and other companies that do not directly sell a widget have set procedures and processes that are essential to the sales process.

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Mystery shopping was far from an overnight sensation. In fact, it took over forty years to grow from the seed of an idea into the thriving multi-million dollar industry it has become.

The business was started by iconic entrepreneurs such as JW Marriott and his wife, Alice. Fun fact – rather than starting in the theme park or hotel business, the Marriott’s first business was a small A&W stand that they later renamed the Hot Shoppe when they expanded their menu to include Mexican food items. In their humble beginnings, Marriott and his wife actually began doing their own form of mystery shopping, long before the idea became a business.

Employees at any of the restaurants the Marriott’s owned could expect the unexpected. (more…)

Employee Theft is a tough subject. As we find ourselves on (hopefully) the tail-end of the COVID-19 pandemic, its important to remember that even typically honest employees may steal under dire circumstances, such as a global pandemic. A study on Employee Theft, conducted by Forensic Pathways, found that 10% of employees will always steal, 10% will never steal, and the remaining 80% will steal under the right circumstances.

COVID-19 has created a sense of financial instability for just about everyone in the Unites States. Even for those who were not laid off, or furloughed, from their jobs may be directly connected to many who were. Two income households may have been reduced to one. Many people have taken in children, parents, or other family members who are struggling. Everyone is feeling the strain.

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According to Reviewtrackers.com, a staggering 94% of consumers admitted that a bad review convinced them to avoid a business! A single bad review can negatively affect your business, but that does not mean there is nothing you can do about it. In fact, 45% of consumers stated that they were MORE likely to visit a business that responded to any negative reviews. (more…)