Assignment 1: Employee Turnover

RESTAURANT EMPLOYEE TURNOVER

Describe the type of hospitality industry and its main categories of employees.
Turnover rates vary for different sectors of the restaurant industry. In fast food restaurants, where pay is low and work is mechanical, turnover tends to be relatively high. Fine dining establishments often have a lower turnover rate because the work involves a greater investment in training and a higher level of skill so employers are more likely to pay higher wages and provide additional incentives such as health care benefits. In 2007, before the recession that began in 2008, the restaurant industry as a whole had a 107-percent turnover rate. When the economy is healthy, restaurant employees are more likely to leave their jobs in search of better options. During an economic downturn, turnover rates in the restaurant industry decline because employees are more likely to stick with safe jobs than take chances. An economic downturn is bad for the restaurant industry because fewer people go out to eat, but it is good for restaurant industry staffing because restaurateurs deal less with the negative consequences of turnover.

Summarize three primary reasons that turnover is so high in this industry.
Steady employee turnover at restaurants is an issue that most hospitality business owners face. According to a report in the Nation’s Restaurant News, turnover becomes especially high when the economy is doing well as employees see more opportunities arise. At the same time, the economy impacts hiring and layoffs to add to the turnover rates. Reduced spending in poor economic periods causes restaurants to decrease the number of employees they retain. Hiring began rising in the second half of 2010, for example, after two years