Attracting and retaining employees remains a fundamental challenge across industries, but particularly in the restaurant space. While the restaurant industry has a long history of high turnover rates, there’s no denying that the pandemic has significantly exacerbated this exodus. For national quick-service restaurants with 150 percent to 200 percent turnover rates, better engagement and retention solutions are desperately needed to survive in today’s climate.

Quick-service restaurants don’t have to accept high turnover rates as a cost of doing business, but they will need to go beyond pay gimmicks or giving lip service to company culture to improve them. Great cultures are not announced, but developed over time through collaboration and mutual buy-in. Building a culture of ownership starts with transparency, putting the power of information in the hands of all employees, and giving them the opportunity to do their best work. 

Consider these best practices:

Give Employees an Advantage with Modern Day Analytics 

One of the most significant opportunities to help employees flourish is by giving them access to the right tools and technology. Restaurants actually produce an abundance of data, but the ability to pull and synthesize this data for decision making remains a challenge. Older restaurants are often hampered by outdated legacy systems that make real-time analytics and data sharing nearly impossible. What is possible, however, is to use modern day technology to access and utilize legacy system data. With easier access, weekly scorecards can be created with KPIs for finance, operations and customer service. Delivered directly to managers’ and employees’ phones, data can provide meaningful insights both at the individual restaurant level and across a portfolio of stores.  

Instill Ownership 

With strong decision making tools in place, instilling a sense of ownership and empowerment starts to take on real meaning. Begin thinking of restaurant managers as the “business owners” of their store. With everyone working off the same information, organizational leaders can provide clear and consistent communication to all employees at all levels—from entry-level to management—about the “why” behind strategic business decisions and direction. Let employees also know when you don’t have all the answers to show vulnerability as a leader. When every employee feels informed and educated about what is happening in the bigger picture, they are much more likely to feel connected and loyal to the organization. 

In addition, business leaders need to understand each employees’ professional goals and objectives. Some employees are perfectly happy with the set responsibilities of their role while others are looking to advance their career. The most important thing is to meet employees where they’re at, providing them with valuable learning and growth opportunities and the freedom to take ownership of their daily work.  

Prioritize Humanity

At the core of creating a positive work environment for employees is acting with humanity. Restaurant leaders and “feet on the ground” managers must be able to walk in their employees’ shoes to understand their unique experiences and better meet their needs. Research shows that active listening, combined with empathy or trying to understand others’ perspectives and points of view is the most effective form of listening. Look for natural ways, in the course of regular business, to send a signal to employees that you respect their feelings and are committed to helping them feel fulfilled and successful in their role. 

In practice, it starts with managers getting to know their teams at a personal level and to help them with their unique needs. Make it a point to check-in regularly with your employees, especially your top performers. Create safe spaces for them to share what they love about their role and what they’d like to change. And consider making adjustments based on their feedback, even if it requires an investment. After all, a happy and thriving employee is a lot less likely to churn, saving you the time, money, and headache of finding a replacement.

Case study: Humanity + Analytics = Results  

A recent investment in ten Wendy’s restaurants identified untapped value across every part of the business. A better culture was not merely announced, but systematically built. Leading with humanity, strong communication was prioritized from day one, contributing to 0 percent employee turnover during the ownership transition. With an infusion of technology designed to transform legacy system data, the existing operations team was empowered to make better decisions, achieving 59 percent EBITDA growth across the portfolio. By taking the time to better understand the needs of employees, the employee benefits program was revamped, resulting in an 80 percent increase in program participation. All of these changes were part of  building a culture of engagement and performance, resulting in organic growth that was twice the comparable benchmark, and employee turnover at half of the industry average. 

Of course, compensation is an important variable in employees’ decisions to stay at a company, but it is by no means the only factor driving retention rates. People leave their jobs all the time even when making top dollar, while others remain at lesser salaries because they feel happy and fulfilled. Dialing up humanity and respect can go a long way in creating a positive, enjoyable work environment where employees feel engaged, excited and empowered to make a difference. And when this is combined with modern analytics, quick-service restaurant leaders have a real opportunity to deliver value to employees and customers alike. 


Aneil Lala is a Managing Partner of Legacy Capital Partners, a preferred, patient capital investment firm that acquires enduring businesses with undiscovered value.   Lala is a former public equity investor at Schonfeld Strategic Partners where he specialized in the restaurant sector. He also held investor positions at Green Owl Capital, First Atlantic Capital and J.P. Morgan, specializing in consumer and retail. Lala holds an undergraduate degree with honors and distinction from Duke University, where he was a Fulbright Scholarship recipient, and has an MBA from The Wharton School at the University of Pennsylvania.

Neal Wadhwa is a Managing Partner of Legacy Capital, a preferred, patient capital investment firm that acquires enduring businesses with undiscovered value. Wadhwa is a former public equity investor at Candlestick Capital and Citadel, specializing in the restaurant sector. He’s also a former investor at Highgate Capital Investment, HIG Capital and Moelis & Company, specializing in consumer and retail. Wadhwa holds a B.S. in Finance, Management and Entrepreneurship from The Wharton School at the University of Pennsylvania where he graduated summa cum laude.

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