How to Attract and Retain Workers in the Service Industry

Posted by Des Sinkevich on July 30, 2021

The restaurant and service industry has always grappled with high turnover rates – the average turnover for restaurants is around 75% - but the pandemic and its long-term effects have made attracting and retaining employees more difficult than ever. Even as more Americans get vaccinated and businesses reopen to full capacity, restaurants, bars, fast food establishments, hotels, and other service-related industries are losing workers at the highest rate in decades, leaving some 1.2 million jobs unfilled.

Because of historically high staffing shortages, established businesses are being forced to limit their hours of operation, or shutter their doors altogether. Those that are attempting to weather the unprecedented worker shortages and attract employees to their businesses are doing everything from offering gift cards to those applicants who show up for interviews, to sign-on bonuses for new hires. But as hiring becomes more competitive for business owners, restaurants need to offer more opportunities for growth to stand out. One effective way to do that? Make education and upskilling benefits an essential component of employee perks.

server taking customer order on notepad.

Understanding the service industry staffing shortage

Service industry jobs, whether back or front of house, are generally demanding. Long hours, low pay, and a lack of benefits are often the norm for workers, wearing away at even the most passionate employees over time. But jobs as servers, dishwashers, hostesses, and bartenders were relatively easy to come by pre-pandemic and, on a good night, an experience worker could potentially take home enough money in tips to cover rent, bills, and more. Then COVID-19 hit in spring 2020, mandating widespread closures of all but the most essential services, forcing the service industry to furlough employees and pivot to take-out focused service. As vaccines became more widely accessible across the country and social distancing protocols were relaxed, the service industry was primed to rehire millions of workers – a goal that has yet to come to fruition.

Understanding the reasons behind the lack of interested applicants for service roles is essential to addressing it. While many would like to solely point to continued unemployment benefits for the shortage of service workers, staffing issues in the industry are much more complicated than “people don’t want to work”. Studies found that restaurant jobs, like line cooks, were the riskiest in terms of contracting COVID. For many working parents, the health risks coupled with the problem of finding day care for their kids made it difficult to justify restaurant jobs.

Further, with only a small opportunity for career growth in the field, many workers are leaving the industry altogether and pursuing career paths in roles that offer benefits like healthcare. In order to attract new employees and retain current ones, the hospitality industry needs to offer incentives that make a difference such as offering employer-sponsored education and training programs.

Education opportunities can increase employee retention in the service industry

Employer-sponsored education and training benefits aren’t just beneficial to those in the skilled trades or healthcare industries. Offering opportunities to upskill, reskill, or earn credentials through online training can be an effective incentive to attract and retain workers in the service and hospitality industries. Chains like Starbucks, Taco Bell, and Chipotle have proven that education benefits can make an impact on their staffing and their bottom line. In a pilot program launched in 2017, Taco Bell parent company, Yum! Brands, saw a 30% increase in employee retention among workers enrolled in their “Start with Us, Stay With Us” program after six months.

As employers in service and hospitality struggle to fill vital roles, an issue that is negatively impacting revenue for many businesses, investing in education benefits may seem detrimental. However, increasing employee retention rates can ultimately increase a company's bottom line and providing clear growth opportunities can help you stand out in a saturated, competitive hiring market. It can be especially important to attract millennials to open roles in your restaurant.

Millennials make up 35% of the US workforce – that's 56 million workers as of 2019 – and many prioritize career progression, training, and employee development when searching for a job over 401ks or vacation time. While other employers in hospitality, fast food, and service are offering gift cards, promises of retention bonuses, and temporary hourly pay increases, offering career training that can positively grow a worker’s skills and employability in the long-term will offer more value to potential job seekers.

Implement an education benefits strategy with Penn Foster

Building your own education benefit strategy from scratch doesn’t have to be difficult. Through partnership with Penn Foster, you can offer a variety of online programs to new and current employees, from those related to your business to high school completion and college degrees. With flexible, mobile-friendly classes, your employees can learn on the go, around their work schedule. Contact a Penn Foster training expert today to learn more about the programs that could be right for your business!