Game Plan for Hiring

GOOD FOR BUSINESS: Well-liked servers will help create a following for your restaurant.

RIGHT FOOT: Make sure your current staff greets prospective staff members appropriately.

In the May 2005 issue of RESTAURANT HOSPITALITY, author, foodservice consultant and speaker Bill Main observed in his article "Why Foodservice Stinks" that the root causes of poor service in the front of the house—largely servers—have to do with wages issues that result in unmotivated workers. He prescribed a fix to this that included server training, reducing section sizes and eliminating bussers.

His analysis is astute, but I believe the prescription can go further to elevate the quality of service in restaurants. It is important to come to terms with the reality that all training, wage adjustment and structural changes can be defeated if the human "raw material" is not right from the start. Poor service in the front of the house has a lot to do with poor hiring at the front of the employment process. That's where quality starts or ends.

The best way to attract customers and keep them coming back is to spend more time planning your hiring process for servers. The good news is the economy is expanding and restaurant patronage is improving. The bad news is that menu options are increasingly more sophisticated, and there are more restaurants to choose from. A restaurant's remaining differentiation factors center around creating a distinctive dining experience, which is ultimately defined by the people who serve our diners. Kathy Protogyrou, treasurer of Greenbrier Investments, the holding company of several casual dining restaurants in Williamsburg, VA, agrees that bad servers can have a huge impact on your business. "If a customer has a bad experience, they simply won't come back. Good servers attract steady return business. Customers request specific stations just to be with their preferred server," she says.

Better Hiring Reduces Turnover: A Key to Quality
The crux of the problem is that poor hiring practices lead to turnover. Turnover itself leads to conditions where managers "take what they can get" and quickly toss new hires on the front lines without the proper experience and training, which virtually guarantees that service will be suboptimal and employment short-lived. Restaurants are continuously scrambling to staff up with servers and don't put in the time to put a thoughtful hiring process in place. Thus, turnover begets turnover and it becomes a vicious cycle. Restaurants find themselves in a perpetual "triage" situation.

Statistics bear this out. Turnover at the server level is at 111%, according to the "People Report," a quarterly survey of employment trends. This is accepted as a fact of restaurant life. Operators should consider that if they could take a fraction of the revenue and time lost as a result of poor service and invest it into effective hiring, the problem could be addressed effectively. But few know the actual hard and soft costs that poor service causes. If they did, they might be shocked into action.

Hard and Soft: The High Cost of Turnover
What are the known costs associated with turnover? Basic sourcing costs are easy to identify and most organizations have a good idea what it costs to find new people. The table on this page gives an idea of what most restaurant managers would spend in a given year in a metropolitan area. These are fundamental expenses and exclude such items as background checks and other hiring costs.

Soft Costs: Hidden, Hard to Quantify and Most Insidious
The hard costs actually pale next to the soft costs. Consider that companies routinely do not include HR paperwork and time spent processing new employees in their turnover costs. Nor do companies measure the costs associated with lost productivity of the person leaving. Equally difficult is tracking team performance when faced with turnover. These are much bigger and more insidious costs, especially when they occur on a broad scale at the hourly level. They're not hard to identify, but they are hard to quantify.

These "soft costs" lead to a domino effect of lost time and productivity. They include wage losses on the part of the immediate supervisor due to interviewing and training needs of new employees. Peers often suffer because their work is interrupted to provide additional support and training to new employees. If you could identify just some of these issues, they would include:

• lost managers' time in the interview process
• successive interviews to find the right candidate
• pre-and follow-up interviews with desirable can didates
• productivity losses resulting in smaller bonuses for the manager
• lost operational time due to training
• training time of peers
• morale issues with peers
• morale issues with managers
• safety issues regarding new employ es' awareness of their responsibilities
• lost business with clients that falls through the cracks due to changes in staff
• broad ranging quality-of-service issues

Turnover, Poor Quality and Your Bottom Line
But let's define what quality means in the context of restaurant settings. In large measure it means providing high-quality service in a timely fashion. Therefore, high quality can be equated to high customer satisfaction and well-being. The costs associated with poor quality therefore have a direct reflection on your revenue.

The cost associated with poor customer service in the hospitality business is exorbitant. Bad food can be chalked up to many factors. Bad service, on the other hand, reflects bad management, and will certainly cause a customer to consider another restaurant before returning to yours. A single server can ruin your business. The cost to your business is not in current business sold, but in lost future business. You can lose up to six percent of your total revenue if a single server each night delivers poor service.

The High Cost of Turnover Sourcing Cost-Server: Ad in Major Newspaper**: $408.98 Ad on Monster.com: $380 Cost of Managerial Time: Resume Review Cost: $60 ($15/hour, 4 hours) Interview Cost: $60,($15/hour, 4 hours) Training Cost: $150 ($15/hour, 10 hours) TOTAL COST $1,059 Annual Expected Turnover: 111% # Employees in position: 5 Annual Recruitment Expense: $11,172 ** Source:Washington Post 1x1, Sunday ad

Taking Control: A Recruitment Toolkit
You can control these costs simply by taking more precautions in the hiring process. Surprisingly, proactive recruiting is not the answer. If a manager is constantly recruiting, he or she is continually spending more time on future employees than on current ones. Effective recruiting is the way to turn the tide of turnover.

The onsite manager has the most power in controlling the bottom line costs associated with turnover. Therefore, he/she needs to be empowered with the most recruiting tools to streamline the hiring process. Steer clear of simply posting a sign in your window. You might get great traffic and instant responses from such a sign, but is it generating the type of candidates that will contribute to your company and stay long enough to develop long-standing clientele and careers?

A recruitment toolkit that is simple and easy to use will help you make the right recruiting decisions. Prepare this type of resource for your managers and watch their recruiting effectiveness improve.

1. Create a profile of the ideal candidate for each position you want to fill.
   • Do you know what you expect from each position? Do you have an ideal candidate for your servers? Greeters? If so, create a general description to save time later in the interviewing process.
2. Create standard preinterview screening and interview questions.
   • Design a guideline to help your managers effectively screen job candidates and separate the "wheat from the chaff." If they identify problem behaviors in candidates, then they will be able to avoid employee problems later.
3. Construct a procedure for handling interested candidates.
   • Ensure that your staff greets candidates appropriately and walks them through the recruiting process accordingly. If your staff alienates prospective hires, you could damage your entire reputation.
4. Offer referral incentives to your current employees.
   • Do you have great employees? If so, you may want to hire their friends, too. You can put together a referral program that rewards your employees for recommending friends for jobs within the company. If a new employee stays for 90 or 180 days, reward the referring employee with a bonus or a paid day off. "We found our greatest success when we implemented the referral system," Protogyrou says. "Some corporations may disagree that friendships and nepotism should never occur; however, we have found that with close supervision at the server level, people who want to be together, work better together and are more inclined to cover each other's stations," Kathy noted.
5. When you need to advertise, be sure to select targeted media.
6. Create a standard ad that you can use anytime in print publications.
   • Create a text ad describing all of the benefits of working in your restaurant. Also create a display ad using your logo and menu design to project your restaurant's personality and culture.
7. Post your positions online at community colleges, community websites and employment websites.
8. Connect with the local restaurant association.
   • Most associations' websites have low-cost resources to help their members find and recruit effectively.

I like to say that "quality is as quality does." Reducing turnover and increasing quality service take knowledge, work, investment and a process. It will be reflected in a better bottom line and a more satisfied and growing customer base. A process will also result in more consistency and less chaos and heartburn day-today for everyone in the organization.

Jennifer Sanford is director of corporate accounts and marketing for The Employment Guide. She has been involved in the recruiting business since 1997. Sanford can be reached at Sanford@empguide.com

The Cost of Bad Hiring Decisions Negative impact of a single bad hire as server Average Meal Price: $20 Average Return Rate Per Customer, Annual: 5.0 Annual Revenue Per Customer: $100 * * * Table count: 20 Server count: 5 Clients per server: 4 Table Revenue per Meal: $80 Table Revenue per Evening: $320 Total Revenue per Evening: $6,400 Total Annual Revenue (assuming 365 nights): $2,336,000 * * * Bad Server count: 1 Number of evenings worked: 365 POTENTIAL FUTURE LOSS: $146,000 (Revenue per customer x clients per server x 1 bad server x number of evenings worked) Percentage of Total Revenue Lost: 6%