How Management Development Training Reduces Turnover

According to the 2017 Trends in Hospitality Training & Development Study conducted by TDN2K/People Report and the Council of Hotel and Restaurant Trainers, hospitality companies that spend 10% of their ongoing management training on human resources related topics tend to have much lower management turnover rates than those that spend little or no time on these topics. In this article, we’re going to dig into why that’s the case and what you can do to beef up your management training programs.

Current Turnover Situation

Management turnover has increased significantly since 2014, according to TDn2K. In 2017, turnover of counter service managers was at a rate of 47%, up 21 percentage points from 2014. Table service brands also struggle with management turnover, especially in the back of the house, where turnover rates averaged 35% in 2017.

And, the cost of replacing a manager is extremely high, averaging a staggering $14,036 per manager. By improving turnover by even a small amount – say 5% – a 100-unit chain with five managers per location can save more than $350,000 over the course of the year!

Why do Managers Leave?

There are, of course, many reasons restaurant managers may choose to leave your organization, but TDn2K’s research shows that the top reasons are:

• Immediate promotion at another company
• Poor work/life balance
• Higher compensation in new job offer

Interestingly, two of the top reasons have to do with career advancement and the other has to do with workload. Let’s dig into why the first of these two factors might impact manager retention so severely.

Many companies have evaluations with a development plan, some do regional training classes, and some do quarterly goal training. But where they often fall short is when a manager doesn't see a clear path to promotion. Unfortunately, a good portion of turnover often comes from your high potential employees, who are exactly the people you want to retain. If they perceive that promotion will be difficult, they are more likely to look elsewhere. Some of the common threats that can lead a manager to stray include:

• No clear-cut path for advancement
• No program with fair objectives that everyone must complete
• Promotions based on subjective factors or relationships
• Promotions based on seniority verses performance
• No promotion or advancement opportunity within 18-24 months
• Working at a low volume restaurant, where they go unnoticed

These threats can be mitigated with an ongoing management development program that creates a career path for high achievers. By laying out a logical progression from Trainer to Supervisor/Shift Lead, to Manager, to Assistant General Manager, to General Manager, to District/Regional Manager, you can help your best leaders envision their future advancement potential within your organization.

As explained in this article on using a 5-Step Leadership Ladder, this vision can become reality by adopting a philosophy of continuous development at every level of your organization. With restaurant-specific e-learning courses readily available, you can put a leadership development program in place very quickly.

Soft Skills are Hard

Many managers are great at handling the day-to-day tasks of running the restaurant, but when it comes to managing people and other soft skills, they struggle. Those are areas of discomfort for many of them, and when people are uncomfortable, they are more likely to leave. Managing people is not easy and it’s getting more difficult, especially with sensitive issues like harassment and diversity in the spotlight.

Most new managers do not automatically have the soft skills they need to be successful as leaders, and if they don’t receive soft skills training from their organization, they either need to develop them on their own or go somewhere they can gain these skills. This skill gap has a direct impact on the second major factor that causes managers to leave: work/life balance. If managers are not competent in skills like coaching, delegation, and leadership, they take on a bigger burden for completing tasks in the restaurant themselves. This creates unmanageable workloads for them, which leads to poor work/life balance. By providing specific training aimed at improving these soft skills, you can alleviate a major pain point for your managers.

For example, our Improved Leadership Through Delegation course uses a simple topic like cleaning air vents to show  managers how basic steps can be utilized to delegate various day-to day tasks and free up more of their time. And though it seems like a simple concept, many managers struggle with things like delegation on a day-to-day basis. This course provides practical steps to follow concrete examples and interactions that can be modeled.

CHART and TDn2K’s research proves that investing in training on supervisory skills has a positive impact on management turnover. As shown in the chart below, restaurants that spend more than 5% of their training time on supervisory skills have significantly lower management turnover than those that spend little or no time on these topics. 

Success Breeds Success

Likewise, managers who are successful in their roles and run a successful restaurant are more satisfied with their jobs and tend to stay longer. New managers don’t inherently know how to keep tabs on all areas of the restaurant and what steps to take to ensure guest satisfaction. Without training on these essential skills, managers are less likely to be successful and more likely to be at risk of leaving.

In courses like Figure 8 and The How of Wow: The Art of Manager-Guest Interaction, managers learn systematic approaches for scanning each area of the restaurant, while looking out for opportunities to keep guests happy as well as opportunities to coach employees. Integrated practice activities help managers gain confidence in these skills, so they are better prepared to perform them on the job, especially during busy shifts.

E-learning Makes it Easy

All of this may sound great, but it can be a bit overwhelming if you don’t already have content that covers these topics. By leveraging e-learning you can quickly deploy training programs that address leadership development at every level of your organization. Comprehensive programs that can be customized to your needs are available for:

• Train the Trainer
• Supervisor or Shift Lead
• Assistant Manager
• General Manager
• Multi-Unit Manager

If you are worried about doing soft skills training online, just make sure that the courses you select are hospitality-specific and highly interactive, allowing managers to practice their new skills as they learn. According to CHART and TDn2K, use of e-learning for ongoing training is correlated with better management retention results. As shown in the chart below, companies that offer 20% or more of their ongoing management training through e-learning tend to have much lower management turnover rates than those that offer less training via e-learning. 

With a few simple steps, you can stop your valued managers from walking out the door. In addition to the potential to save more than $14,000 per manager retained, you will also see happier employees, happier guests, and more successful restaurants.