It’s an equation that seems simple but still escapes many restaurateurs: Treat your employees well, and your business will be better for it.
Offering restaurant workers good pay, benefits and career mobility usually translates into high short-term costs -- a burden that causes many low-margin eateries to underpay and overwork their employees.
But generous management policies also help dining establishments save big in the long run, according to new research from Cornell University and Restaurant Opportunities Centers United.
The restaurant industry is a notoriously difficult place to work. Wages tend to be lower than those of any other occupation. Nine in 10 people on staff don’t get sick days, paid vacation or health insurance. Advancing up the ladder tends to be a rare occurrence.
The tough conditions are evident in worker productivity and retention, researchers found.
Employees often underperform, doing only what is necessary to keep their jobs until they can find a better position. The quality of the food and service suffers, in turn preventing the eatery from building a loyal customer base.
Turnover is rampant, usually costing restaurants between $4,000 and $14,000 per departing worker in new recruiting, screening, training and other costs. Some establishments said they often have to train four potential candidates before finding one they’re willing to hire.
More investment in workers could end up saving the restaurant industry millions of dollars, according to the study. More interested and productive workers would help draw more revenue to offset the higher initial labor costs, researchers said.
The Cornell report is based on studies of 33 restaurants in eight cities, including at Good Girl Dinette and the Chaya chain in Southern California.