No One Quits a Job

On turnover, and why more employers should be worried about it

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Why do we accept turnover as a natural part of service work?

Turnover in the service industry is generally considered a chicken-and-egg problem. Is there a high rate of turnover because the people who work service jobs are transient? Or are people in the service industry transient because of the punishing conditions of their work?

We do know that the service industry sees much higher turnover than the overall workforce. In 2018, the average turnover rate in hospitality was 74.9%—three in four employees. It climbed to 78.6% in 2019. (This figure is calculated by counting the number of folks who left a job in a given time period and dividing that number by the average number of employees during that time.) Meanwhile, the U.S. Bureau of Labor Statistics (BLS) estimated that the average turnover rate in the United States was 44.5% in 2018 and 45% in 2019.1

Some of the turnover in the hospitality industry can be attributed to its workforce. Restaurant.org explains that one-third of all working teens are employed in places that serve food or drinks, and “twenty-eight percent of eating and drinking place employees are enrolled in school, versus just 10 percent of the total U.S. employed labor force.”

But that doesn’t account for all turnover, or the higher rate of turnover in hospitality specifically. If you’re an employer in this industry, it’s actually entirely possible to radically lower the turnover rate—if you invest in the idea that you have control over how long employees want to stay at your workplace.

For so long, the narrative has been that turnover in the hospitality sector is inevitable, a fact of nature. Not only is that idea wrong, it’s also damaging. Turnover is costly: On average, the cost of losing an employee is about 33% of their annual salary. That cost is eaten up in both measurable and immeasurable metrics: decreased productivity during the end of an employee’s tenure, hiring costs, onboarding, and the time it takes for a new employee to achieve the competency of their predecessors.

In the fast-food world—where turnover is 130%+ on average—there are a few folks who have cracked the code on employee retention, and who demonstrate what a better, less harmful version of the industry could look like. Take Pal’s Sudden Service: a small fast-food chain based in Tennessee with staggeringly low turnover rates. “In 33 years of operation, only seven general managers (the people who run individual locations) have left the company voluntarily. Seven!” reports the Harvard Business Review. “Annual turnover among assistant managers is 1.4 percent, vanishingly low for a field where people jump from company to company and often exit the industry altogether. Even among front-line employees, turnover is just one-third the industry average.”

Pal’s keeps turnover low through continued investment. Employees are rigorously trained, get reading lists, and are constantly being assessed and given chances to learn more and improve. Many of its employees are teenagers—between the ages of 16-18—and still Pal’s has been able to escape the common pitfalls of so-called “transient work.”

I’ve always been fascinated by the way we approach the nature of turnover in the service industry. We don’t seem to have a good answer as to why it’s so high, and so lament the lack of loyalty from employees. We point fingers at the applicant pool, finding reasons to blame baristas or bartenders or servers for leaving jobs quickly.

We have yet to take responsibility for the fact that high turnover rates are primarily the fault of leaders, not the folks who are leaving. We can’t blame individuals for a problem our industry is having as a collective. And this is important, because the way we talk about jobs in the service industry—and how quickly we slap the title of “transient” on this type of work—means we’ll never professionalize it. Despite the fact that we seem to recognize how important front-of-house workers are to the growth and future of the service industry, we have yet to take seriously the instability built into these jobs.

“People don’t quit a job,” a common saying goes, “they quit a boss.” Turns out, the data supports this aphorism.

Half of folks leave their jobs because they can’t stand their boss, which could be exacerbated in service work, where you can’t hide in a cubicle and hope your boss doesn’t find you. 40% of employees who leave a job also cite lack of career development as a motivation. At this point—because I can already hear the chorus of shitty coffee shop owners saying there are no other jobs to grow into, since their shops are so small—I want to note that career development is different from upward mobility. Career development can mean anything from sending someone to a trade show to paying for additional training. A small investment like this can save the significant cost employers accrue when employees leave.

Employers aside, we don’t talk enough about the emotional and financial toll leaving a job takes on employees. Most of us don’t start a new job assuming we’re going to leave in a few months, and the number of folks who report basic complaints as their reasons for leaving a workplace—like not being paid enough money, or having a crappy boss— shows that there’s a path to making things better.

A few days ago, I made an Instagram post that said, “Turnover isn’t an employee problem. It’s an employer problem.” Hundreds of people liked the post, which demonstrated two things to me: one, employees feel like they’re treated as if they were disposable and two, most problems at work can be fixed.

The jobs that people complain about most are the jobs that could have been great—the ones that had promise but ultimately were a letdown. The ones littered with ineffective and harmful practices that could have been eliminated if they were only addressed. So yes, turnover is an employer problem—but it’s one that can be fixed, that there is ample research on, and that you can control. But you have to want to.

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1

A note about these numbers. For hours, I Googled different statistics to try to figure out the national average turnover rate, and got two buckets—one that supported the 45% range, and another that estimated the turnover rate to be around 20%. I’m not sure why these figures are so disparate, but the turnover rate cited by Restaurant.org seems to pull from a chart that cites overall turnover at 45%, so for the sake of clarity I’ll stick with these numbers.