It became apparent that retention rates within the organization were abysmal with approximately 50% of new hires would not last 97 days within the organization. Employee retention has significant associated costs, and a study by Cox/Frank for the U.S. Department of labor statistics estimated that in the supermarket context, employee turnover cuts into the industry’s profit by approximately 40%. It was from this study that Angela Hornsby decided that many of the problems that plagued the supermarket industry were similar to that of T.G.I. Fridays
The article then went on to identify problems with retention. Firstly it is the case that many restaurants focus on turnover and not retention. Salary is not the most common reason for somebody leaving an organization. It was postulated that employers who provide their employees with better direction lose only about half of their employees in 148 days as opposed to 86 days which marks a 72% difference in the grocery industry. Furthermore it should be noted that retention drivers are different for management employees as opposed to hourly laborers. As such retention programs need to be tailored to meet the different needs of different employees.
The article finally postulated that according to Teresa Siriani of the People report suggests that the restaurant industry’s high turnover can be attributed to many factors and no one simple problem. She suggested that a shrinking labor pool, declining employment rate (in 2006) and more competition amongst other labor fields such as health care will continue to make retention difficult. It is only through continual innovations can a restaurant hope to achieve better employee retention and as such lower the associated costs.
The challenges presented in this article are simple. It is the case that in the restaurant (And Supermarket) industry there is inherently a very high employee turnover rate. The way that this affects the food and beverage