How quick-service restaurants can improve their employee retention strategies
The restaurant industry has always faced challenges in recruiting and retaining employees. Quick-service restaurants (QSRs) have experienced higher-than-average turnover rates reaching about 144%. In fact, a 2022 study found that only 54% of QSR employees reached 90 days of working before quitting. And, as you probably know, high turnover impacts the bottom line by creating exponentially more work for payroll and HR teams.
Adapting to today’s high turnover employment cycle requires a holistic approach that aligns payout processes with the needs of today’s fast-food workers. To change the tide, many businesses are implementing new ways to pay their employees to stand out in the hiring crowd—and as an effective employee retention strategy.
Below we explore how an integrated approach to payroll—including earned wage access alongside other financial wellness tools—can streamline and minimize the pain points of high turnover while supporting QSR workers’ financial health.
Overcome high turnover: Address employee financial wellness
Hourly workers in the restaurant industry experience greater financial stress than hourly
workers in all other industries. Take a look at the data:
- 43% of restaurant workers report they don’t have money left after paying bills compared to 26% of all other hourly workers.
- 49% of restaurant workers describe their current financial situation as “fair” or “poor” compared to 29% of all other hourly workers.
- 70% of restaurant workers have experienced financial hardships, like falling behind on bills or being unable to save for emergencies, compared to 53% of all other hourly workers.
You might be surprised to learn that workers’ financial stress can impact a business’s bottom line. Research reveals a strong correlation between workers’ financial stress and increased absenteeism and turnover. As you know, retention problems are costly. In the restaurant industry, the estimated cost per employee lost is $5,864. Employers need to understand how financial struggles impact their employees so that they can look for ways to better support them.
Support workers’ financial health with earned wage access
One factor of financial stress comes down to not just how much an employee is paid, but how easy it is for them to access their accrued wages. For instance, workers paid by cash or check are more likely to say their financial situation disrupts their work. And a quarter of restaurant workers are still paid by check versus direct deposit or other digital options. This can be problematic as checks can be a more expensive and time-consuming way for workers to access their funds. Compared to workers in other industries, fewer restaurant workers are satisfied with their pay method.
Earned wage access solves this problem by giving HR and payroll professionals more tools to help address hiring and retention issues. By giving employees more control over how and when they get paid, employers can meet their workers’ financial needs while also gaining an edge in this competitive hiring market.
Waiting for the traditional pay cycle can be costly and time-consuming. Workers have to return to work later to collect wages, spend time and money cashing checks, or wait for weeks to access their wages through direct deposit. This recurring scenario can be very inconvenient and detrimental to workers’ cash flow and financial stability. That’s why it’s no surprise that earned wage access is in high demand by workers, with 42% of restaurant employees willing to switch jobs for it.
Quick-service restaurants looking for employee retention strategies must take steps to respond to workers’ needs for faster, digital access to earned wages and overall financial wellness. In doing so, they’ll enable solutions that bolster financial health, so employees have the resources and support they need to stay on the job. This checklist outlines some of the top tips and tools for recruiting and retaining hourly restaurant workers in today’s tight market:
- Earned Wage Access helps workers gain better control over their financial situation to become more financially stable, less stressed and more productive at work.
- Savings Programs offer tools and benefits that make it easier for your workforce to save and further support a stronger financial foundation.
- Digital Payments can save time and expenses. And for restaurant workers, digital tip payments can be made promptly, regardless of how much cash is on hand.
- Mobile Financial Tools make managing money on the go faster and easier. This is key to minimizing work and life disruptions and enabling access to online and mobile payments.
- Direct Deposits offer faster, more reliable access to wages without the burden and expense of check cashing fees.
To win over workers and help improve their financial health, businesses can use payment solutions that deliver digital wages, closing the digital access gap and providing stability to the business and its workers. For QSRs seeking effective employee retention strategies, a new way to pay staff is a smart choice.