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May 23, 2017

Not All Restaurants Are Failing. Here’s How Some Are Staying on Top.

top performing restaurants

If there’s one thing that has become obvious over the past few years in the restaurant industry, it’s that “the rising tide does not raise all boats.” But, perhaps “the ebbing tide does not lower all boats,” either. While chain restaurants have been looking at some of the worst years of sales and traffic since the Great Recession, there have been a few top players. These chains continue to drive success on all fronts, from operational performance to workforce engagement and positive brand health.

The gap between these top brands and the bottom performing restaurants is growing. Black Box Intelligence (formerly TDn2K) data has shown that top performing restaurant companies had, on average, 7 percent higher same-store sales compared to their competitors and 7.9 percent higher same-store traffic than the worst performers during 2016. Additionally, social scores mark this wide distinction between the best and the worst. Top performing brands reported 9.3 points higher service scores than the competition in their dining segment and 10.6 points higher intent to return scores than bottom performers.

Furthermore, these best-in-class restaurants are also able to diminish their turnover levels, which have become a serious problem for chains over the past several years. Since 2014, the turnover gap between top and bottom companies has significantly widened. In 2014, the average hourly employee turnover for top performing counter service companies was 28 percentage points higher than the bottom performers. Last year, this number doubled and grew to 56 percentage points.


How to Become a Top Performer

So, what’s the secret? How are these winning brands managing to recruit and retain their employees better than the rest of the industry? One trick of the trade is learning how to better attract top talent in tough areas. According to the 2017 Recruiting and Turnover Survey by Workforce Intelligence (formerly People Report), 73 percent of companies are now offering additional incentives to candidates in areas of difficult recruiting. For hourly employees, this often takes the form of offering higher base pay.

Another best practice is keeping teams properly manned. The companies with the lowest turnover rates have higher staffing levels compared to their competitors for both managers and hourly employees in every single dining segment. For example, best performing restaurant brands in the upscale casual dining segment had an average of 108.1 hourly employees, compared to 78.3 employees per unit for the worst performers in turnover.

Finally, employee engagement remains a must for chain restaurants. Data from the survey shows that job abandonment is one of the top factors in voluntary terminations for hourly employees. This means that these employees are so disengaged from their jobs that they just stop showing up. It is crucial for restaurants to learn how to address this level of disengagement and find new, creative ways to get their employees fully involved and satisfied.

Even as the labor pool shrinks and shifts, not all hope is lost for restaurant operators. There are restaurants that are leading by example, showing that you can have a loyal, engaged and productive workforce to drive sales and keep customers coming back. It’s not an easy feat, but learning what distinguishes the best from the worst is the only way forward.


Liked this article? You should read “5 Must-Know Workforce Trends” to get the scoop on turnover, unemployment and the continued challenges of workforce recruiting.

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