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Nation's Restaurant News
Review:
Studies
find operators create employee turnover problem.
Restaurateurs may moan and groan about factors causing the steady
drain of talent and labor from the industry, but two new studies
contend that operators themselves are their own worst enemies when
it comes to keeping employees.
Employers' unwillingness to increase pay,
shifts with long hours and poor corporate recognition of good
performance just scratch the surface on a list of shortcomings that
exacerbate employee flight, the studies state.
The reports come at a time when foodservice
increasingly is competing against other industries for workers in
the nation's shallow labor pool. The research findings further
underscore foodservice's wicked turnover problem, which often is
blamed on the industry's image as a low-paying field.
The two studies, one from academia and the
other from professional management consultants, tallied up the
emotional and financial costs of chronic turnover.
In the study "Job Satisfaction, Life
Satisfaction and Turnover Intent of Food Service Managers,"
Professor Richard Ghiselli of Purdue University's Hospitality
Tourism and Management Department found that the working conditions
of the average restaurant manager are driving those who hold such
positions from the industry. Ghiselli concluded that the exodus is
so steady that by the time many restaurant managers reach their
forties, they have probably left the industry.
"Try to find a restaurant manager in his
forties," Ghiselli said. "In our study the average age is
32, and less than 5 percent are over 45."
The other report, by the international
management consulting firm Sibson & Co., a Princeton, N.J.-based
subsidiary of Nextera Enterprises, emphasizes that employee turnover
in the fast-food segment is a voracious drain on profits, costing
businesses an estimated $3.4 billion a year. The Sibson study
estimated that turnover among employees of publicly traded
fast-feeder firms can be blamed for depressing their stock prices by
about 38 percent.
"We believe there are several reasons for
this," Sibson & Co. chairman Jude Rich wrote in an
introduction. "Many managers do not know how much turnover
really costs; others have not figured out the root causes, so they
do not know what actions to take; while others mistakenly believe
turnover is inevitable in their industry."
A Sibson & Co. official said the company's
study was based on an examination of 220 limited-menu restaurant
chains. Rich was unavailable for comment.
Some operators and industry leaders said the
reports shed no new light on the turnover problem, and others
disagreed with the findings.
"I think the results are not
surprising," said Terrie M. Dort, president of the National
Council of Chain Restaurants. "Obviously, these are issues this
industry has been challenged by for a long time.
"To me, they are just stating the obvious
when you consider the characteristics of the work force and the
characteristics of high turnover [and when] you find young employees
in low-skilled jobs. So much of this is a logical fit.
Then you add that to the fact that this industry has a
disproportionate number of young people with a lot of part-time
jobs. Plus, it's a tough job."
Ghiselli, the Purdue hospitality professor,
said his findings were based on a questionnaire designed to measure
unit managers' job satisfaction on a five-point scale. The
questionnaire was mailed to the top human resources directors of 24
national restaurant companies selected from the 1998 Top 200 census
issues of Nation's Restaurant News. Eight companies, representing
fast-food, full-service and cafeteria chains, ultimately agreed to
participate, yielding 459 returned questionnaires.
Of those who responded, 28.5 percent were
general managers, 23.5 percent were first assistant managers and
33.4 percent were assistant managers. Forty-seven percent were
employed by full-service restaurant concepts.
The median salary range of all respondents was
$35,000 to $37,500, though some made as little as $20,000, while
others reported incomes as high as $65,000. The median hours worked
was 57.3 per week. Eighty-nine percent of all the participants were
white, and 66 percent were men.
On average, most of the managers in the survey
had been at their current jobs for 5.5 years.
Looking to quantify a link between job
satisfaction and turnover, Ghiselli found that 225 managers, or 73
percent, indicated that they would like to remain with their current
company in the short term.
When asked if they intended to leave the
company five years from now, 242 managers, or 58.9 percent, said
yes, while 169 managers, or 41 percent, said no.
But Ghiselli said big differences were seen
between employees of different companies over their short-term
intent and five-year intent. At one company 50 percent of the
managers said they did not expect to be with their current employer
in five years.
In order of magnitude, the prevailing reasons
the managers cited for departing were better salary and benefits, a
desire to spend more time with family and improved quality of life.
Older managers who were married, considered
themselves well paid and thought they were good at their job
indicated the least intention to resign. Younger, single managers
were the most likely to leave. For all respondents who intended to
leave, more than half said they would pursue careers in fields other
than hospitality.
Although Ghiselli said several positive
findings emerged from the report, he emphasized that the industry
has the power to change many of the disappointing findings. In
particular, he reiterated his criticism that foodservice is losing
its most experienced managers.
"Older managers are a very valuable
commodity," he said. "They are the ones who can train
younger managers. They are the ones schooled in sanitation and
hospitality. But these companies we surveyed seem to be doing a
pretty good job of weeding them out."
Ghiselli also faulted the industry for working
managers too long per shift. He noted that the average American
works 43.8 hours a week, compared with the nearly 58hour work week
of the average manager in the survey.
"Some of them are going longer than that," he said,
"and on an hourly rate they may not be making as much as the
other workers. The perception that these people are valuable appears
not to be there in this industry.
"With management turnover, consistency and
quality have to diminish. If the managers are not there to be a
stabilizing force in a restaurant, what happens to your standards,
your culture, your ability to please guests?"
Stephen Wood, executive vice president of human
resources and corporate affairs for Advantica Restaurant Group, took
issue with Ghiselli's numbers on typical hours worked, however.
Noting that most managers are salaried workers whose shift lengths
are not commonly tallied with precision, he questioned how accurate
the number could be if the respondents were answering the question
based on memory or emotion vs. objective data from a human resources
office.
Still, Wood conceded that long work weeks come
with the territory in restaurant management and have not proved to
be a major turnoff, at least so far as Advantica's Denny's chain is
concerned.
"No one questions the fact that being a
restaurant manager is not a 40-hour work week," he said.
"For us, keeping good managers is a balance between being
sensitive to their family issues and not burning them out managing
the store.
"But from what I've read, everyone is
working longer hours, from the dot-coins to the folks in manufacturing."
Wood also challenged the study's findings that
nearly 90 percent of the respondents were white.
"White people don't even make up 90
percent of the population anymore," he said. "How can they
make up 90 percent of this sample?"
In articulating solutions to the problem that
were not in the report, Ghiselli said the answer to retention might
be to raise menu prices in order to compensate managers properly.
"Can the industry pay more? What would be
the effect on menu prices? Are customers willing to pay more for a
Big Mac? I think they are willing to pay more," he said.
Veteran New York restaurateur Marc Packer,
owner of the Harley-Davidson motorcycle-theme restaurants and
founder of the Angelo & Maxie's steak-house chain that now is a
Chart House subsidiary, took issue with the conclusion that managers
are defecting from foodservice.
"I don't see restaurant managers leaving
the industry, going to these dot-coins or other fields," he
said. "I think they go from restaurant to restaurant in search
of better pay and schedules.
"The bad part is that there's so much
money around right now. I see a lot of good managers going to the
newest, hot trendy place until it falls in on itself But I think
fundamentally we are talking about burnout, and there's burnout in
every industry."
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