21
Journal of Hospitality & Tourism Cases
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case study
By Seung Hyun Lee and Kelsey Layman
Tips to Reduce Employee Turnover in the Restaurant
Industry: Case of a Restaurant Unit Within Darden
Introduction
According to National Restaurant Association (NRA) (2016), the
restaurant industry’s sales are expected to reach $799 billion in 2017.
With more than 1 million restaurants located in the United States,
the restaurant industry is the nation’s second-largest private sector
employer (10% of U.S. workforce). Specically, the restaurant industry
employs 14.7 million employees and is expected to create an addi-
tional 1.6 million jobs by the year 2027. Despite the signicant size of
the sector, turnover has been a known burden to restauranteurs. As
shown in Figure 1, turnover rate in the hospitality sector topped 70
percent for the second consecutive year according to the NRA (2016).
The overall turnover rate in hospitality sector was 72.9 percent in 2016,
up slightly from a rate of 72.2 percent in 2015.
However, when analyzing the data an overall trend emerges,
the restaurant industry turnover rates are on average higher than the
private sector turnover rates. Several factors contribute to the indus-
try’s comparatively higher turnover rates. For example, the restaurant
industry workforce tends to face: long hours which include work on
weekends and holidays, poor working environments, and possibly
even negative relationships with supervisors or co-workers (Collins,
2010; Hinkin and Tracey, 2000; Lashley, 2000; Susskind et al., 2007). In
addition, upward mobility in the restaurant industry often happens
when employees move from one restaurant to another. More than any
other industry in the economy, the existence of multiple restaurants in
nearly every community gives employees additional opportunities for
upward mobility and career growth (NRA, 2016).
High turnover rates signicantly increase the costs of restaurant
operations. A study performed by researchers at Cornell demonstrated
some nancial implications of employee turnover. The cost of turnover
could be as high as $5,864 per employee, which results in a total of
roughly $150,000 per year (Jaee, 2016). High turnover rates increase
nancial costs, lower productivity, and result in inferior service quality
(Tax and Brown, 1998; Tews, Michel, and Staord, 2013). Thus, it is im-
perative for restaurateurs to reduce their excessive turnover rates.
While the retention of employees constitutes a signicant prob-
lem, continuously representing one of the most signicant challenges
that restaurateurs face in their operations, Darden Restaurants, Inc.
(Darden) appears to dier. Darden records of low voluntary turnover
rate of 8%, which is signicantly lower than the industry average
turnover rate of about 70% (Darden Fact Sheet, 2015). This case study
focuses on one restaurant unit within Darden and seeks to nd the
reasons that restaurant employees choose to leave and solutions to
reduce turnover rates.
Literature Review
While employee turnover continues to represent one of the most
signicant challenges faced by the U.S. restaurant industry, previous
research has been done on factors related to employee’s turnover
intentions in the context of restaurants. First, employee’s work status
whether being a full-time or part-time is related to their turnover
intentions. DiPietro and McLeod (2011) examined the eects of per-
ceived work status of hourly employees on the relationships between
turnover intentions in the casual-dining restaurant industry. Their re-
sults revealed that part-time employees recorded a generally negative
trend in factors shown to contribute to turnover. In addition, part-time
employees showed signicantly lower levels of aective organization-
al commitment than those full-time. The mean scores of the desirable
attributes trended lower for those part-time employees; one of the
most concerning being they are less likely to help others.
Second, co-workers inuence job satisfaction, which leads to
lower turnover intentions. Bufquin and colleagues (2017) examined
the inuence of co-workers’ perceived warmth and competence on
employees’ job satisfaction, organizational commitment, and turnover
intentions in a casual dining restaurant setting. They found that co-
workers’ perceived warmth and competence had signicant eects
on employees’ job satisfaction, which in turn lowered their turnover
intentions. Hsu-I (2006) seeks to nd the relationship among culinary
arts workers locus of control, demographic variables, job satisfac-
tion, work stress, and turnover intention. According to their nding,
internal locus of control was signicantly and positively correlated
with employee job satisfaction and their tenure in the kitchens but
signicantly and negatively correlated with work stress and turnover
intention. In another study, the relationships between job satisfaction
and job turnover were investigated in fast food restaurants located in
Hamilton, New Zealand (Mohsin and Lengler, 2015). While the study
seeks to reveal the antecedents of intention to leave the current job
Seung Hyun Lee is aliated with East Carolina University. Kelsey Layman is
aliated with University of Denver.
22 Volume 7, Number 4
among workers. They concluded that employees are not satised with
their jobs. In more specic terms, training and recognition, job secu-
rity, and loyalty are positively related to job satisfaction. Dissatisfaction
leads to increased intentions to leave.
Third, researchers investigate turnover intention in relation to
tipping. Based on surveys from several hundred restaurant servers in
the United States, Lynn (2017) concludes that servers’ attitudes toward
working for tips and average tip sizes were weakly related to several
factors such as: their service-orientation, intended job-tenure, and oc-
cupational-tenure. Surprisingly, tipping does not substantially help to
attract and retain more service-oriented workers. Fourth, interactions
with customers can be stressful, thus possibly increasing restaurant
employees’ turnover intentions. For example, Han and others (2016)
studied the relationships between customer incivility, restaurant front-
line service employee burnout, and their turnover intention. Results
conrmed that customer incivility has a positive relationship with
restaurant frontline service employee job burnout. Further, this study
found that the relationship between customer incivility and turnover
intention as seen through job burnout was fully mediated. While
employees leave a job due to several reasons mentioned above, res-
taurant operations face a serious dilemma in retaining employees.
Methodolgy
Darden employs around 150,000 people and is the 35th largest
employer in the U.S. According to the company’s statistics, 75% of the
workforce is part time, averaging 15 dollars per hour (Darden Fact Sheet,
2015). Darden is the parent brand of Olive Garden, Longhorn, Seasons
52, Bahama Breeze, The Capital Grille and Eddie V’S. Darden has record-
ed low turnover rates and has been recognized for the positive work
environment. Fortune Magazine has recognized Darden as one of the
top 100 best companies to work for in 2012, 2013 and 2014. The highest
ranking that Darden received was 65th out of the 100 best companies to
work for. Fortune lists the voluntary turnover rate at 8%, which is signi-
cantly lower than the industry average turnover rate at about 70% as it
provides a pathway for thousands of individuals throughout the country
to advance from entry-level jobs into management roles (Darden Fact
Sheet, 2015). To learn specic practices in place at Darden, the case of
Longhorn Steakhouse in Greenville, North Carolina was studied. An
interview was selected as the method in which to study this unit’s cur-
rent practices to gain a better understanding of the issue and identify
potential solutions to reduce turnover rates. A structured interview was
done with the service manager Mr. Andrew Cunningham at Longhorn
Steakhouse in Greenville, North Carolina. Interview method was used
because interviews are particularly useful for getting the story behind a
participant’s experiences and the interviewer can pursue in-depth infor-
mation around the topic (McNamara, 1999).
Results
The most important turnover factors present in a full-service
restaurant setting are determined and then specically analyzed. The
factors chosen to analyze in depth include: hiring practices, monetary
rewards, training policies, exible scheduling, burnout, and creating a
fun working environment.
Hiring The Right Employees
It is important to hire the right employees from the start. Restau-
ranteurs should look for the commitment, t, and attitude of potential
candidates when hiring because the ability to retain employees starts
Figure 1
Annual Employee Turnover Rates: Restaurants/Accommodations vs. Private Sector
(Source: Bureau of Labor Statistics, 2016)
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Journal of Hospitality & Tourism Cases
with hiring the right employees. Research shows that several human
resource practices can be used to lower turnover rates. Factors such
as organizational commitment and organizational t have a strong
correlation to turnover intentions (Bhat, 2014). Employees who feel
connected to their organization are much more likely to stay (Bhat,
2014). Interestingly, attitude is considered as a key factor. The inter-
view with Mr. Cunningham supports the notion: “It is important to hire
the right people so you can build a team of loyal, skilled employees.
The number one thing I look for in an applicant is attitude. I believe
attitude is more important than experience because it is much easier
to train someone on skills than to try to x a bad attitude”.
Monetary Rewards, Training, and Flexible Schedule
Research recognizes pay level, training, and exible scheduling
as the vital factors that help to retain current employees to their jobs
(DiPetro and Milman, 2008). In terms of monetary reward, Darden of-
fers health care coverage to both full-time and part-time employees
starting on the rst day of employment. Darden also allows employ-
ees the option to enroll in a 401K savings plan. In addition, Darden
provides their employees with other benets such as discounts for a
variety of products. As far as training is concerned, Darden oers an
extensive training program for new employees which takes place over
5 days and is comprised of hands on experience and learning modules
from the company handbook. Knowledge is tested through end of
the day review exams. During training the new employee is paired
with an experienced server and shadows the experienced one so that
the new one understands and prepares for their job responsibilities
through direct observation. Throughout training the new employees
are encouraged to taste dierent menu items so they will be more
knowledgeable to customers. In terms of creating exible schedules,
Mr. Cunningham explains that because restaurants require employees
to work long hours and holidays he likes to give part time workers 4
days on and 3 days o so they can enjoy a break. He also tries to ac-
commodate their other commitments such as school.
Burnout
Many service organizations train employees that the customer is
always right, however what about the situations where the custom-
ers are behaving irrationally? This causes psychological stress on the
employees that are forced to bite their tongues and smile as they
serve these rude individuals. Management has little control over the
behavior of customers. A study conducted to see if there were any
negative results on turnover stemming from these unpleasant interac-
tions found that frontline employees dealing with customer incivility
can cause burnout (Han, Bonn, and Cho, 2016). However, management
can lessen the impacts of burnout if there is open communication and
support. If employees feel as though they can trust their superiors,
they can come to them in these situations and get the help and sup-
port they need. Mr. Cunningham understands this rst hand because
he has been working with the company for over 10 years. 10 years ago,
he started working for Darden as a server. He admits that even he has
experienced a period of burnout during his career, so he can relate to
employees going through this: “It is important to listen to employees
and show them you care. If they trust you enough to come to you
when there is a problem, then you can talk through things together
and x the issue. But if there is no open communication present, you
will not have the opportunity and your employees may leave due to a
factor that could have been resolved.”
Mr. Cunningham also goes on to explain how he tries to accom-
modate employees to keep them satised, “If I see an employee who
is showing signs of burnout and may be thinking about quitting I
make the eort to talk to them so I can understand what the prob-
lem is. By creating this context of open communication, it is much
easier to x any issues. Most of the time it is something that can be
resolved by working on their schedule and assigning dierent shifts”.
Mr. Cunningham also believes that it is important to be empathetic
and understanding. He acknowledges that all managers have dierent
leadership styles, but he makes sure to be there for his employees. For
example, when a customer complains the best thing to do is use the
incident as a learning opportunity rather than yelling or overreacting.
When one of these unpleasant interactions happens, he talks to the
employee to listen and understand their side of the story then he asks
what went wrong and how can this problem be avoided in the future.
This way they can step back calmly and analyze the situation rather
than becoming more upset and frustrated by being yelled at.
Fun Working Environment
Having fun in the workplace can be used to increase employee
satisfaction. Studies show that allowing employees to have fun in the
workplace (such as team building activities, social events, productivity
contests and celebrations) increases their perception on job satisfac-
tion and can increase performance, whereas the negative impacts of
emotional exhaustion can decrease (Tews et al., 2013). These research-
ers also found that when managers support these team building
activities, there is a negative correlation to turnover. Therefore, by
creating an environment that employees engage in team building
activities, turnover can be reduced while performance and satisfaction
increases (Tews et al., 2013).
Mr. Cunningham also expresses how he and his co-managers at
Longhorn try to incorporate fun through activities in the everyday work
environment for employees: “Something we do here to make the environ-
ment fun for employees is hold contests. Each manager has their own
team of about ve servers, and there are new challenges every week such
as, which team can sell the most appetizers or desserts. It is an eective
way to motivate employees while also having fun and team building.”
These contests that Mr. Cunningham describes are a way to boost morale
24 Volume 7, Number 4
among employees while also using a game as a fun way to increase sales.
By creating a healthy competition, coworkers on the same team work
together to reach a common goal and the manager assigned as team
leader can get to know their employees on a more personal level. During
this game, the managers can gain insight as to what motivates specic
employees and what leadership style proves to be the most eective.
Mr. Cunningham says the managers also like to surprise the em-
ployees with snacks sometimes to show that the work they are doing
is appreciated. In the restaurant industry employees often work on
holidays, which can be tough because in most industries employees
are given the day o. However, for restaurants holidays can often be
the busiest days of the year. Mr. Cunningham shares that on the recent
Easter Sunday, the managers decided to surprise the employees with
dinner, so they picked up about 20 pizzas and laid them out in the
back. The managers encouraged the employees to eat as much as they
wanted and to take some home too. By doing this, management could
show the employees that they appreciated their work and dedication
to their job even when it was a time they would have rather spent with
family or doing something other than working.
Discussion
Turnover occurs very frequently in the food service industry and
has become an epidemic. This case study provides an overview on
the topic by demonstrating the factors that lead to turnover and what
can be done to decrease turnover given specic examples of suc-
cessful practices utilized at one restaurant unit within Darden. While
it is important for restauranteurs to be aware of the turnover issue
and know how to decrease the level of voluntarily turnover in their
operations, this case study provides insights and solutions that can
be used to create an environment in which employees enjoy work-
ing. The factors identied from the interview are hiring practices,
monetary rewards, training policies, exible scheduling, burnout, and
fun working environment. Restaurant operators are recommended to
pay attention to the methods used to recruit employees and criteria
used to evaluate candidates to make the best employment decisions.
In addition, conicts in the workplace may occur between coworkers,
managers, or customers. Open communication is an essential compo-
nent in creating and enforcing successful human resources practices.
It is important for all managers to be informed and consistent on the
application of the practices. Once the human resources practices are
in place retention eorts need to be constantly enforced. This is where
open communication and conict resolution really come into play.
An organization should be able to retain the best employees or
they will be forced to spend more time and money hiring and training
the new employees. Managers need to nd ways to show their em-
ployees they are valued and respected. For example, they should try to
be accommodating to time o requests and other scheduling prefer-
ences and to get to know employees by building and developing trust.
It should be noted that all turnover is not bad if it removes unsuc-
cessful employees. However, it is important for managers to be able
to keep and retain the best employees. Several factors are examined
from the recruitment process to uncivil customers and creating an
environment where employees are encouraged to have fun on the job.
Retention can also be achieved by providing the benets employees
want and need. As seen at Darden, they oer employees the oppor-
tunity to enroll in a health care plan even if they are part time. Darden
also oers benets such as a 401K savings plan, Darden Dimes which
gives employees the option to donate the change from their paycheck
to a plan that is in place to help employees with expenses if they are
faced with an emergency or natural disaster, discounts at local busi-
nesses and the opportunity to move up within the company.
The goal of these practices is to create an overall positive work en-
vironment. A positive work environment is important because studies
have shown that satised employees are more productive. Having more
productive employees decreases waste caused by mistakes, creates
more satised customers and makes the company more money in the
long run. Along with human resource practices, retention eorts and
benet plans, value can be added by playing games or holding contests.
Endorsing these activities makes the workplace fun for employees and
furthermore, can be a bonding experience that motivates employees
to work harder. The idea is that open communication, a positive work
environment, and empathetic managers can lower the chances that
employees will experience burnout. This positive work environment will
keep employees satised, which results in reducing turnover and saving
money. Restaurateurs can help to increase retention rates by putting an
emphasis on these factors that assist in reducing turnover. Management
should develop strategies that place an emphasis on training, managing
burnout, and creating a fun working environment. It is suggested that
other establishments can use these ideas to create their own solutions
to combat turnover rates. Managers need to make it their priority to nd
a solution that will lead to higher retention rates and lower turnover
because doing so will signicantly reduce costs.
Limitations and Future Studies
This case study has several limitations. First, the results are based
on one restaurant unit within Darden due to limited resources. Al-
though this inside look is benecial, it should be noted that using such
one unit as a sample cannot scientically or presumably generalize
about the total population from this sample due to lack of represen-
tations. Future studies are suggested to include a bigger sample to
represent the population. Although interview is a scientic method in
which the verbal conversation between two people, with the objective
of collecting relevant information, it has limitations. It depends greatly
on the interviewee’s use of language to describe his experiences and
therefore his perceptions are expressed using their words and mean-
25
Journal of Hospitality & Tourism Cases
ings that may dier from those of the researchers. Also, the analytical
process and interpretation of results tend to be inuenced by the
researchers’ use of questions to previous concepts. Further research on
quantitative studies are recommended to prove causal relationships.
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