6 Ways Hiring Mistakes Can Negatively Impact Your Restaurant

You use the finest ingredients. You've secured a premier location. The menu is spot-on. Your branding and marketing is on point. You account for food and labor costs, and profits are all but assured.

Without the right team in place to pull it all together, success remains an elusive target.

Did you know that the cost of a bad hire can cost up to five times the bad hire's pay?! So, that means for an employee earning $25,000 annually, the cost could be up to $125,000.

Plain and simple, hiring matters.

Wondering Why?

Your team pulls the parts of a restaurant's operation together into a cohesive unit. The best ingredients in the world can't save a sub-par kitchen staff, but a talented back-of-house can turn simple ingredients into masterful dishes. A restaurant's staff directly impacts how well its operations function.

Business Impact

Hiring mistakes result in both direct damage to a restaurant's operations and finances, and substantial lost opportunity.  Here are the top six ways hiring decisions can impact your business.

  1. Lost Revenue: Great servers can upsell customers to boost ticket size. When the service is on point, and the food is excellent, customers order more, including dessert and drinks.
  2. Increased Customer Retention Cost: Staff problems can increase a restaurant's comps, reducing cash flow and revenue. Comps are a powerful tool when used properly and budgeted for, but overuse can doom a restaurant's fiscal outlook.
  3. Slower Table Turn / Customer Throughput: Slow service means slower table turn, longer waits, and lost customers. You simply earn less money when compared to a more efficient, well-oiled operation.
  4. Decreased Customer Retention: Customers won't return if the service or food isn't up to par. There are plenty of options for their dining dollar, and you need to earn their business. Repeat customers are the absolute lifeblood of a healthy restaurant.
  5. Negative Word of Mouth: Negative experiences spread far more quickly than positive ones. Instead of turning customers into fans and organically driving new business, negative word-of-mouth can harm your ability to gain new customers.
  6. Legal / Compliance Issues: A restaurant, like any business, has a range of potential legal exposure, ranging from health code violations to employment compliance. A great team will help keep the restaurant compliant, so a visit from the health code inspector isn't a doomsday scenario.

So What's Next?

Stay tuned, over the next few posts we'll start diving into each area of staffing in a restaurant - guiding you through how to spot symptoms of troubles ahead and tips to make sure you're hiring the best people every time.

Get started with 6 signs your back-of-house restaurant staffing needs a reboot. 

Footnotes

  1. Cost of bad hire according to Society for Human Resources Management (SHRM)