Panera Bread faces 100% annual employee turnover, and that's considered success in a fast-food industry where workers leave at rates as high as 130% to 150% each year. Panera thinks better training will help get workers past the critical 90-day mark before quitting. Others think fast food will be the first fully automated industry run by robots.
For fast-food chains employee turnover is 130% to 150%, the Bureau of Labor Statistics reports.Some experts believe it is inevitable that fast food will be the first job sector ruled by robots.If you think it sounds like a mathematical impossibility for a company to lose more than 100% of its workers every year, you've never worked in the fast-food industry.
Batt said decades of fast-food industry efforts to standardize and "routinize" jobs — take the skill out of them — has been intended to create turnover-proof jobs. "If you lose someone, it is not a real cost, because they are so easily replaceable. ... The industry has thrived on this HR model of turnover-proof jobs for many years, because they could get away with it," she said, through a slack labor market or absorbing the cost of high turnover.
Cornell's Batt said a survey of restaurants she helped conduct in 2013 put the cost of fast-food turnover at $1,600 per worker, and that was at a time when turnover was significantly lower.The cost per employee now is estimated by the National Restaurant Association at $2,000 per employee. Those figures will vary by restaurant type as fast-food employees are still less expensive to turn over than those in upscale dining.
Portalatin said there has been a dramatic increase in digital ordering, especially consumers placing orders from mobile phones. Total customer traffic has been flat over the past year, but there has been "a monumental shift" to digital ordering, and NPD Group expects digital orders to increase 23% a year over the next half-decade. Restaurants have an economic incentive to make sure this shift continues to accelerate.
Panera is betting that better training can help. "All training had been in back of kitchen; now it is all on iPhones, and I can see it going to goggles — employees see it right in front of them, training them in a fun and interactive way," Panera CFO Bufano said. There are no other job segments in the U.S. that have higher turnover than the fast-food and fast-casual segments of the restaurant industry, according to DiPietro at the University of South Carolina's School of Hotel, Restaurant and Tourism Management. "Not even retail."
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