S2E11 - NRA State of Staffing & Hiring in Restaurants, Part 2

[00:00:00] Teaser

[00:00:00] ​

[00:00:01] Casey Golden: A new hire costs you money until day 32. For a manager, 72 days.

[00:00:08] Ricardo Belmar: Here's something most restaurant operators never calculate.

[00:00:11] Casey Golden: So what happens when someone quits before they pay off?

[00:00:15] Ricardo Belmar: We asked the National Restaurant Association's chief economist, Dr. Chad Moutray, how restaurants keep their best people long enough to matter and why the answer starts in those first 90 days.

[00:00:27] Casey Golden: Stick around and watch the full episode to learn how!

[00:00:30] Show Intro

[00:00:38] Ricardo Belmar: Welcome back to season two of the Data Blades Podcast, part of the Retail Razor Podcast Network, where we cut through the noise and get to the numbers that move your business forward. I'm Ricardo Belmar.

[00:00:48] Casey Golden: And I'm Casey Golden. Welcome to episode 11, part two of our three-part hiring and staffing miniseries.

[00:00:55] Ricardo Belmar: If you caught episode one, you know the labor market's shifting, and an empty [00:01:00] shift gets expensive fast. So today we flip it. Once you've got great people, how do you keep them?

[00:01:05] Casey Golden: Back with us today is Dr. Chad Moutray, chief economist and senior vice president of industry research and knowledge at the National Restaurant Association.

[00:01:17] Ricardo Belmar: This episode is all about engagement and retention, and a number that surprised us and will almost certainly surprise all of you in our audience, how long a new hire actually takes to pay off.

[00:01:29] So before we bring Chad in, a quick word about the folks who make this show and the Retail Razor Podcast Network possible, RetailClub.

[00:01:37] Join 2,000 retail leaders at the Retail Club AI Festival, September 22nd to 24th in Huntington Beach, where you'll dive deep into how AI is reshaping retail while soaking up the sun at a fully outdoor beachside venue. Decision-makers from retailers and brands can attend with free tickets and up to $1,250 in travel reimbursement.

[00:01:57] Head to [00:02:00] retailclub.com/retail-razor-podcast to learn more

[00:02:02] Casey and I will be there for the best conversations on how AI impacts your customer experience and every operational part of your business. I hope you'll join us.

[00:02:11] Casey Golden: And if you're getting value from this series, do us a quick favor, Like, Subscribe, and drop us a five-star rating and review on YouTube, Apple Podcasts, Spotify, and Goodpods. It only takes a fraction of a second, and it helps more operators find the show.

[00:02:26] Ricardo Belmar: All right. With that out of the way, let's get into it. Here's part two of our deep dive into how to keep and engage your recently hired staff with Dr. Chad Moutray, Chief Economist and SVP of Industry Research and Knowledge at the National Restaurant Association.

[00:02:41] Welcome Back, Dr Chad Moutray!

[00:02:47] Ricardo Belmar: ​Chad Mutray, welcome back to the Data Blades Podcast. We're thrilled to have you back with us today for the second in our three-part series on hiring and staffing in restaurants based on your recent research insight [00:03:00] report, Hiring and Staffing: How Onboarding, Managers, and Technology Drive Restaurant ROI.

[00:03:04] Casey Golden: Today we're tackling an important challenge for restaurant operators, keeping your employees engaged and retaining them. Because once you get them, the cost of turning them over is too high, and you really wanna keep them. Maybe not for a 20-year career, but they gotta last a week. So Chad, last episode you gave us the rundown on your role at the National Restaurant Association as chief economist, and head of industry research.

[00:03:38] So rather than ask you a repeat of everything we've already covered, why don't we just dive into today's topic?

[00:03:46] Chad Moutray: That, that works

[00:03:47] What Net Positive Means

[00:03:47] Casey Golden: The report introduces this idea of a new hire becoming net positive. What does a new hire becoming net positive mean? Can you walk us through, why it matters [00:04:00] to the bottom line, and how do we do that?

[00:04:03] Chad Moutray: Well, think of all that it takes when you're hiring a new employee, right? You- you've gotta go out and post the position. Maybe you're having to pay In- Indeed or one of those job posting services, right? You gotta do the interview process. That's a lot of manager time, right? To go through all of the interviews and the screening and all that stuff.

[00:04:21] Then once you find the right candidate, there's, your orientation and some kind of, overall process, and there's training, right? And that can vary from company to company, right? Maybe there's a lot of mentoring you're doing with other employees or doing some type of training in general where maybe they're learning different stations.

[00:04:38] But you're not... On day one, you're not adding to the bottom line, right? That's really what this net pro- positive, comment means, right? You've put a lot of dollars into that overall process. And so at what point, does that new employee start having that marginal dollar adding to the bottom line, right?

[00:04:56] At what point do they start becoming productive, right? and the [00:05:00] thinking there is, if you lose someone before that point, they were a quote-unquote, "bad hire," right? You lost money on them, right? So when do you start actually making money on that hire, right? and, that's really this, this understanding or thinking that, we wanna make sure we at least get them to that point.

[00:05:16] I used to ca- I used to call this the magic number, right? When did-- when is it that someone starts... if it-- You know they're gonna be golden, right? They're gonna stick around. But also, when are they adding to the bottom line? I think that's really what we mean by net positive.

[00:05:28] The 32 and 72 Day Math

[00:05:28] Casey Golden: So the report suggests an hourly hits net positive at 31.8 days,

[00:05:35] Chad Moutray: Yeah

[00:05:35] Casey Golden: managers at 72.2 days. that's not bad

[00:05:41] Chad Moutray: And I heard that, again, we did a lot-- We married in, for this survey, we married a lot of survey data with a lot of, with interviews, right? And I heard that pretty consistently. It obviously varied, but roughly a month, and I would even call that the magic number as well. If you s- if you can make it around a month, you're probably gonna stick around, right?

[00:05:59] And [00:06:00] so that's a, a nice sweet spot. Maybe it's two weeks, maybe it's a month, but that's really where, what I heard from a lot of operators. For managers, though, it takes a lot more time, right? They've got... You've gotta make sure you're doing a lot of investment. Again, varying from operator to operator, some of them really, fly the-- from the, the mount to work with another manager for a while or, it depends on whether they're coming internal or external.

[00:06:22] But really it's more, I heard two to three months, right? And that's really what that average can suggests. Sometimes it's even longer than that. but, again, so that means if a manager leaves you,

[00:06:32] Ricardo Belmar: Yeah, what happens then?

[00:06:33] Chad Moutray: after 30 days, you've lost money on them. You've got to go out and hire another manager.

[00:06:37] That's a whole-- starts the whole process all over again, right? And I think that's really what we're getting to with this notion

[00:06:42] Ricardo Belmar: Yeah. Yeah, and I'm,imagining, with that investment, if it, if your average is taking you two months to get, that payback from hiring a new manager, if you lose them before that, even after a month, then that's gotta be a much kinda harsher pain to take, to have to recover from than just having lost one of your regular staff members, after a couple [00:07:00] weeks.

[00:07:00] Managers Make or Break Teams

[00:07:00] Chad Moutray: And you have to remember the importance of a manager in general, right? A manager is key, right? If you're thinking about restaurants that are really humming along, they're hitting everything out of the park, right? It's really a strong manager that's in that lead, right? And the employees follow them, right? If

[00:07:15] Ricardo Belmar: Right

[00:07:15] Chad Moutray: have a really weak manager and you've hired the wrong manager, that can have larger implications for your, even your hourly employees that are saying, "Okay, this is... I'm out. This is not

[00:07:26] Ricardo Belmar: working for me," right? And so I think that also speaks to, on the manager side, that you could have some larger domino effects, I think, from some of your other staff as well.

[00:07:35] Casey Golden: Yeah, no, somebody only lasting two or three weeks be hard pressed to quit on a great manager,

[00:07:43] Chad Moutray: Yeah,

[00:07:44] Casey Golden: and th- I'd say that's a critical point

[00:07:47] Ricardo Belmar: Yeah

[00:07:48] Chad Moutray: And if you have a good manager, one, one thing that came out, people follow them, right? So in, in many of these, restaurants, maybe you're seeing down the road that particular restaurant store, is having problems, so they'll move the manager over [00:08:00] there.

[00:08:00] then if I work for that person, I want to follow them, right? So you got to follow... You ha- really good managers have a huge following, right? So that's the other part of that.

[00:08:08] Ricardo Belmar: Yeah. Yeah. What are you finding is the average, tenure for a manager versus your standard hourly employee?

[00:08:15] Chad Moutray: This, managers typically stick around for, at least one or two years, right? I think that's, that, that was the typical that I often heard. Sometimes even longer than that to your 20-year comment that you made earlier , right? but largely they're sticking around a few years. I think that, that's the key, right?

[00:08:30] Yeah, be a bartender at the airport.

[00:08:33] Yeah,

[00:08:33] Casey Golden: You're raking it in. All they need is a couple delayed flights.

[00:08:41] Surviving the First 90 Days

[00:08:41] Casey Golden: the report flags the first 30 to 90 days as the highest turnover risk window. What's actually working to keep new people engaged through that stretch?

[00:08:53] Chad Moutray: The key here, and this is true of all retention, so this is not necessarily even restaurant specific, you've got to have [00:09:00] a great manager. They've got to communicate, right? I think, i- making sure that you- you're feeling heard, right?

[00:09:06] Ricardo Belmar: You-- if you have suggestions or you're having some issue that you're feeling heard early on in the process, hopefully you were clearly told about what your expectations are in this role, right?

[00:09:16] Chad Moutray: I think some of that attention comes that maybe you were sold something as far as what the job was going to entail, and then you get in there and it's a little different than that. but I think it, it really comes down to, to that. It also comes down to maybe training, cross-training so that, again, you can fill in other places where, so again, that makes you feel more needed and more useful.

[00:09:36] So I think a lot of it comes down to just what you would think of as retention strategies for anything. I used to be chief economist at the National Association of Manufacturers, and very similar kind of storylines came out, when you think about retention and how you can improve retention.

[00:09:52] it all comes down to some of those really basics. you often hear that you don't quit the job, you quit your manager, right? So again, that co- that [00:10:00] collaboration I think is key there, and really making sure that, again, if I'm working for them, I'm gonna enjoy the experience, work-- enjoy working with my co- colleagues and enjoy working with the manager.

[00:10:09] Even if it's a stressful position, I think that they're gonna-- you're gonna get the kind of benefits from that.

[00:10:13] Ricardo Belmar: Yeah. Yeah.

[00:10:14] Leadership Traits That Retain

[00:10:14] Ricardo Belmar: Just staying on this theme of the importance of that, that manager and the, and kind of the, those, skills and traits that you want that manager to have to help build that culture, and to lead that team. what are you finding are some of those leadership qualities that matter so much that, that really impact retention specifically from the manager?

[00:10:32] Chad Moutray: I think it all comes down to communication and setting expectations, but also helping to really strengthen those, your strongest employees, right? Nurturing them. If you think about where managers come from, they often come from working their way up from, maybe you hear stories about CEOs of restaurant chains that started as a dishwasher, right?

[00:10:53] What is that path, right? To make sure that I can continue to move up in, in the system, [00:11:00] right? and so I think nurturing those stronger employees, finding new avenues for them to also have some leadership roles to really work with other employees, I think those are all helpful. Strong communication skills, right?

[00:11:13] Being able to work under pressure, right? The last thing you want to do is get into that rush hour and your manager's kind of losing it, right? And so I think all of those things are key. Strong managers also look really at all the numbers, right? And I think, again, when you're looking at different restaurants, in terms of the ones that are knocking it out of the park, those managers are hitting on all of those, all of those key metrics of operations and making sure they're hitting their sales targets and retention targets and all that kind of stuff.

[00:11:39] And I think that, having that holistic view, but also that personal touch, I think is key. Yeah.

[00:11:44] Ricardo Belmar: Yeah, and I think there's a, a, a line in the report that mentions how with the-- with good managers, oftentimes y- you hear that, they make the restaurant environment feel calm when they're not there, which I think is an interesting one to me because that kind of speaks to the effect they have even when they're not in the room.[00:12:00]

[00:12:00] Chad Moutray: Oh, yeah. Yeah. y- you want the manager out there, talking to customers, making sure the customers are happy and doing that. You don't really... If they're back in the kitchen, it's because you aren't doing your job. Maybe.

[00:12:11] Yeah. It might be right. It might vary.

[00:12:12] Ricardo Belmar: speaks to what we talked about last episode about this being a high-touch environment, right?

[00:12:16] Chad Moutray: But, this is a high-touch world where you want to make sure your customers are happy, and I think when you have really great employees in the b- in the kitchen and doing customer service, the manager can really focus on just the big picture and making sure customers are happy and everything's coming out timely and in a great quality.

[00:12:32] Ricardo Belmar: Yeah.

[00:12:33] Where to Invest First

[00:12:33] Ricardo Belmar: So if you're an operator and your budget might be tight, w- where would you tell me is the highest return place to invest in? Is it in around retention? Is it in onboarding, mentoring, scheduling to provide consistency to the team members or creating a development path?

[00:12:47] Can I say all the above? Um, uh,They're all important, right? They're all important

[00:12:51] Chad Moutray: I think number one, investing in some of those tools early on, I think ori- that orientation, that overall process and those, what does that look like? I would [00:13:00] often ask operators, "What does your orientation look like," right? and there's a lot of them that have really great ideas like, going around and doing some cross-training or, or some things along those lines.

[00:13:10] But I think just in general, how are you making sure that your employees are really scaling up, becoming productive pretty quickly, getting to know their various colleagues? and I think all of those strategies that I-- even the ones I talked about earlier are key to that overall conversation.

[00:13:26] Onboarding Ideas and Scavenger Hunt

[00:13:26] Casey Golden: Super discussion, Chad, on how to keep those hard-to-find hires on your staff engaged. and really retention isn't easy, but it pays off in the long run, and a little bit of extra focus to your managers might be your first door to open.

[00:13:43] Ricardo Belmar: Yeah. Where you get the best

[00:13:44] Chad Moutray: The word I was searching for a second ago was scavenger hunt. there was an operator who had a scavenger hunt, and that's how they introduced new employees to various parts of the operations, was they

[00:13:56] Ricardo Belmar: Oh, interesting.

[00:13:57] Chad Moutray: over and talk to certain people or find certain things. And, anyway, that [00:14:00] was the example.

[00:14:00] My mind

[00:14:02] Ricardo Belmar: No, it's a great, it's a great way of gamifying the whole,

[00:14:03] Chad Moutray: it

[00:14:05] Ricardo Belmar: experience, right? No, it's super interesting. Chad, if anyone wants to dig deeper into the data from the report, and learn more, what's the best way for them to reach out and do that?

[00:14:15] Chad Moutray: You can look at the National Restaurant Association's website, which is www.restaurant.org. You can always follow me on LinkedIn or X, I should say X instead of Twitter,

[00:14:25] Ricardo Belmar: It's always Twitter.

[00:14:27] Chad Moutray: or wherever else, 'cause we do a good job of kind of putting a lot of this stuff up.

[00:14:31] Ricardo Belmar: All right, perfect. So we'll also have links to the report in the show notes. So next time we're gonna be closing the series out with, what might be the big one to close out with, and that's how technology is really reshaping the way restaurants hire and train. We've hinted, I think a, a few times at where that fits in, but, particularly how it can speed up the process.

[00:14:49] But never really replacing that human touch element that is what makes hospitality work.

[00:14:56] Casey Golden: I can't wait for this one.

[00:14:57] Ricardo, I'd say that this episode is a [00:15:00] wrap

[00:15:00] Ricardo Belmar: It is

[00:15:01] ​

[00:15:01] Show Close

[00:15:08] Casey Golden: Loved this episode? Drop us a five-star rating and review on Apple Podcasts, Spotify, or Goodpods. And if you're watching on YouTube, like and subscribe before you go. I'm Casey Golden.

[00:15:18] Ricardo Belmar: Follow us on LinkedIn, Bluesky, Threads, and Instagram and subscribe to our Substack for highlights and bonus content. For transcripts and guest info, visit retailrazor.com. I'm Ricardo Belmar.

[00:15:30] Casey Golden: Thanks for joining us on the Retail Razor Data Blades, part of the Retail Razor Podcast Network.

[00:15:35] Ricardo Belmar: Until next time, stay sharp, be data-driven, and harness AI.

[00:15:39] This is the Retail Razor Data Blades!