Four Ways Onboarding Software Saves Restaurants Money (and Increases Retention)

Strong employee recruitment and onboarding can save restaurants money and increase employee retainment, a number-one issue facing the industry. Utilizing onboarding software cuts costs by digitizing processes, tracking important documents, automating tasks & integrating background screening and organizing employee files. Employee onboarding for restaurants tames key financial ratios (benchmarks), both front and back of house, fattening your bottom line. 

It's Always a Rough Year ​ 

If 2022 has presented hiring challenges across many US industries, the Great Resignation walloped the restaurant industry. 

According to Restaurant Business, eateries "saw more of their workforce quit … than employers did in virtually every other type of U.S. business, with 6% of the hospitality industry's total labor force walking off the job … Across all industries, the quit rate was 2.9% …" Making matters worse, restaurants can't find replacements for those who jumped ship.

"Many operators have trimmed their hours and days of operations because they can't hire fast enough to staff every shift. Filling late-night or overnight hours has proven particularly difficult." 

A National Restaurant Association 2022 State of the Restaurant Industry Report states, "50% of restaurant operators in the full-service, quick-service, and fast-casual segments expect recruiting and retaining employees to be their top challenge in 2022."

While this year may stand out, the hospitality industry always employs more teens, first-time workers and students than other industries, and, with numerous local restaurants tempting workers with greener pastures, employee churn typically tops 70% compared to under 50% for all workers.

Recruit Well 

 The old adage, "measure twice, cut once," could've been created with employee recruitment in mind. Madeline Laurano, VP and principal analyst, Talent Acquisition, Brandon Hall Group, serves up a scary proposition in her research brief, The True Cost of a Bad Hire, stating that organizations "often make bad hires due to poor interviewing processes, a weak employer brand, poor onboarding, a negative candidate experience, and a lack of data …A bad hire can impact productivity, retention, engagement and performance." 

Employee turnover burns through money wasted on rehiring and training, money better spent on promotion, renovations, upgrades, bonuses, etc. 

An oft-quoted study by The Center for Hospitality Research at Cornell University put a $5,864 price tag on staff turnover, and that's already 16 years old!You can save yourself a lot of trouble by getting a solid employee recruitment plan in place.

The Onboarding Process ​

Big or small, all eateries practice employee onboarding to some degree. An effective onboarding process boosts retention and productivity, while poor onboarding can lead to employee frustration, dissatisfaction and quick churn. Proper onboarding begins before the employee's start day, and while smaller eateries may use informal procedures, and different restaurants have varied needs, an employee onboarding checklist includes:

• A formal offer with a stated salary (which might include tip pooling) and benefits.
• A list of all needed tax, eligibility, direct deposit and emergency contact information.
• A training schedule and education on restaurant guidelines, workplace culture and all pertinent policies.

Four Ways Onboarding Employee Software Saves Time & Money

1. Digitize – Going paperless is "75% faster" than traditional methods for processing, filing, sending and receiving documents. Faxes, printers, incorrect or broken email attachments and file cabinets stuffed with disorganized and outdated information are replaced with an intuitive and simple mobile or desktop dashboard. More importantly, as Workbright reminds us,"email, text messaging, and internet access have conditioned [younger workers] to expect near-instant access to information. For your company to be attractive to potential hires … you've got to be up with the times and using systems which give easy access to information and digital files will make this process a lot easier."
2. Automate – Onboarding packages, including offer letters, tax forms and mandatory documents are emailed to candidates followed by automated reminders to speed turnaround of electronically signed paperwork, all done via mobile or from home.
3. Integrate – Integrated screening tools allow fast and easy background checks and work confirmations via E-Verify.
4. Retain– Employee turnover costs you time and money. Good onboarding can mitigate turnover. 

The Society for Human Resource Management (SHRM) reports that:

• a.Almost 70% of employees will stay aboard for three years if they start with great onboarding.
• b.About 60 percent of new hires experiencing a "structured onboarding program" were still at the job after three years.
• c."Organizations with a standard onboarding process experience 50 percent greater new-hire productivity."
• d."This is particularly true of impressionable Millennials who may be new to the workforce and unclear about what to expect. Rather than setting new employees up for success, organizations with poor onboarding processes are setting the stage for an early exit." 

Conclusion

No matter the type or size, your restaurant will profit from solid onboarding. With new technology, you can speed up the hiring and onboarding process, cutting costs and creating a happy workforce. Regardless of your methods, review your recruitment and onboarding process and make sure you're giving yourself the best opportunity at hiring and retaining great workers.

References

1. The Great Resignation Accelerates for Restaurants, Hotels - Restaurant Business Online
2. National Restaurant Association Releases 2022 State of the Restaurant Industry Report
3. Hospitality industry turnover rate ticked higher in 2018 - Restaurant.Org
4. Measure Twice, Cut Once: Preventing Costly Hiring Mistakes
5. The True Cost of a Bad Hire - Glassdoor
6. The Cost of Employee Turnover: When the Devil Is in the Details - Cornell University

1. HR Vocabulary: Millennial Mindset - Workbright
2. Don't Underestimate the Importance of Good Onboarding - SHRM