The Key to Top-Performing Restaurant Workforces
A Closer Look
If you look closely at your restaurant operations, nestled deep within your positive sales growth is a top-performing team. What makes a restaurant workforce ‘top performing’?
We often focus on the health of the business, and as a result, overlook the health of our team. When sales start dropping, people start to pay attention to the areas of the business suffering the most. Unfortunately, declining sales should be your lagging indicator of something not falling into plan.
What are the leading indicators of positive business health? The health, wealth, and happiness of your team. Black Box’s latest Workforce Intelligence data reveals what aspects of the employee and manager experience are most impactful to your team’s overall performance.
Increased Manager Compensation Can Help Drive Financial Performance
With the labor shortage intensifying industry competition for talent, restaurants have been scrambling to better understand how to adequately staff their locations. The results from Black Box Intelligence’s 2022 Total Rewards Survey reveal compelling correlations between compensation and financial performance.
The Black Box Intelligence Total Rewards Survey aims to provide employers with an overview of the competitive landscape across all levels of an organization. It offers valuable benchmarks for benefits, training, diversity, bonuses, and compensation. Combining the results from this survey with Black Box Financial and Workforce Intelligence Gap-to-Segment scores (how a brand performs against its segment median) reveals a strong relationship between General Manager base pay and bonuses and restaurant performance.
Reducing Turnover and Boosting Performance
The Power of Pay
No matter how obvious it may seem, it remains ever relevant and worth mentioning: the data indicates that in the current environment, increased pay is a crucial lever to reduce turnover. Of all the employee rewards mentioned in the survey, none had a stronger correlation than merit-based pay increases and turnover.
For the General Manager position, the companies surveyed that had the highest merit-based pay increases in 2021, outperformed their respective segment by 2% in 2021 Q4 GM turnover, 22 points better than the companies with the lowest pay increase, who tended to experience much higher turnover rates than their segment’s benchmark.
This seems to translate on the financial end as well. Companies with the highest pay increases beat their segment by 10 percentage points more in same-store sales growth and 9 points more in same-store traffic than the lowest-paying brands in 2021 Q4.
Maximizing Performance through Generous Bonuses
Turning our attention to bonuses, we found that higher restaurant general manager target bonuses correlate positively with sales. A target bonus is the percentage of your base salary that may be awarded annually if certain performance criteria are met. This distinction is an important one: the mere incentive of a bonus itself has a positive association.
In 2021, the companies that offered the highest target bonuses to their general managers outperformed their segments by 8.6 percentage points more in same-store sales growth on average than companies with the lowest target bonuses for their general managers. In 2022, this number grew to a difference of nearly 14 percentage points.
As staffing becomes more complex and the economy increasingly volatile, restaurants need to identify what kind of compensation works and adapt to a demanding landscape. Not only for reducing their turnover but for boosting the bottom line as well.
The Total Rewards Survey shows key indicators of top-performing teams start from within:
- Providing opportunities for pay advancement for restaurant leaders,
- Incentivizing them to aim high, and
- Rewarding based on their performance
As a result, brands that prioritize understanding and enriching the lives of their workforce will have a serious advantage over their rivals in this cutthroat industry.