Competitive Set
Exclusive Chain Leader research reveals recruiting and retention methods of managers from different service industries.

The competition for unit-level staff is not just among other chain restaurants. So Chain Leader asked managers at retail outlets and hotels as well as chains to share their successful methods of finding and keeping quality employees.

Reed Research Group conducted a survey in January of 600 unit managers, evenly distributed among restaurant chains, hotels and retail outlets. Fifty-three percent of the restaurants were quick service; the rest were full service.

In each of the industries, respondents reported far more hourly employees than salaried. Restaurant chains’ staffs are 90 percent hourly; hotels’, 85 percent; and retail operators’, 87 percent. Fifty-two percent of chain respondents’ employees are part time, as are 30 percent of those from hotels and 55 percent of those from retail outlets.

Restaurant chains’ mean turnover was 92 percent, while hotels’ was 57 percent and retailers’, 59 percent. Respondents were removed from calculation if they claimed turnover of 20 percent or less.

Why They Leave

While the respondents agree on the importance of certain factors in their unit-level-hourly turnover rates—citing personal reasons, employee misconduct or negligence, and professional reasons as most important—there are differences among industries. For example, restaurant managers were more apt to stress job dissatisfaction as a contributor. Retail respondents saw poor fit of the employee as less of a factor than did restaurant and hotel operators.

Fully 98 percent of respondents said ensuring a good work environment is one way they cope with hourly turnover. They use several other tactics frequently, such as flexible scheduling, cross-training, recruiting experienced workers, employee-appreciation programs and communication/morale exercises.

Yet there are differences among the industries. Chain restaurants are more likely to use cross-training (99 percent vs. 93 percent of hotels and 91 percent of retailers) and less likely to use thorough screening and background checks (68 percent vs. 84 percent of hotels and 82 percent of retail outlets). More hotel managers said they use employee-appreciation programs (90 percent vs. 82 percent of restaurants and 72 percent of retailers) and communication/ morale exercises (90 percent vs. 78 percent of restaurants and 75 percent of retailers).

When it comes to quickly replacing hourly employees, managers across the three industries said they were most likely to use word-of-mouth referrals, walk-ins and applications they already had on file. Only 18 percent of chain-restaurant respondents have used the Internet to source new staff, while 47 percent of hotel and 28 percent of retail managers have.

Benefits Package

Vacation and paid time off was the most common benefit, with 86 percent of all respondents offering it. Eighty-one percent provide health benefits. More than half of the respondents offer 401(k) plans, holiday-incentive pay and performance bonuses. However, restaurant chains’ figures fall behind. Only the top two benefits are available at more than half of the chains.

On the other hand, chain restaurants offer health benefits to both full- and part-time employees with almost twice the frequency of the other industries: 61 percent vs. 34 percent for the rest of the respondents.

Fully 93 percent of chain restaurants offer dining discounts, 63 percent of hotels offer complimentary rooms, and 38 percent of retail outlets give store credit.