Many factors go into a hiring decision. For instance, hiring managers often consider applicants’ work experience, hard skills, and soft skills. In recent years, the importance of cultural fit has become even more apparent too. In fact, some businesses have begun to give cultural fit equal weight with other attributes or even prioritize it. What exactly is it, though, and why is it important in a restaurant?
Defining Cultural Fit as it Relates to Restaurants
In a nutshell, cultural fit is how well an employee’s mentality and behavior line up with the particular values and culture of your restaurant. Unfortunately, restaurant owners don’t always have a handle on what the culture is truly like within their restaurant. One scenario is when, on paper, the restaurant owner supports a philosophy of letting its employees be as independent as possible. In practice, shift managers micromanage the staff members.
Now, a diner may pride itself on its family-oriented culture, particularly if it is a family-owned business. Or it may tout itself as lean and determined. It may emphasize that its employees need to be able to make quick, good decisions, or it may explain that its employees need to be well-versed in carrying out orders. Some restaurants, however, don’t fully understand what culture fit is and why it’s important. When they do hire, they don’t consider that aspect of applicants’ profiles, and that’s a big mistake.
Why is cultural fit so important?
Hiring for cultural fit is one of the important ways to keeping a company or brand’s reputation. Someone who does not fit the company culture tends to be disengaged from work. Therefore, screening individuals who do not fit your company’s culture in the recruitment process can save you significant time and money in the long run.
Everything Is Amplified in a Restaurant
From our experience, we’ve seen that practically everything is amplified in a restaurant. That is a major reason why hiring for culture fit is critical. There are fewer employees who work long shifts together and fewer channels of communication. More direct contact takes place between customers and every employee in the business. If something goes wrong, it’s liable to go wrong on a bigger scale.
Indeed, just one “bad” hire can do horrendous damage to a restaurant. The damage need not be anything as direct as an employee angering an important customer, although that can and does happen. Rather, it can be indirect like a long wait time, and build up to a devastating level over time.
Consider the following:
Someone who doesn’t fit with the culture of the restaurant is hired. Let’s say this person resents following a rotating schedule and doesn’t really follow the dress code requirements and shows up with blue hair to your upscale restaurant.
This person’s attitude affects the morale of the other employees, who bristle at the new hire who comes in late, leaves early, and appears as they please. Employees’ productivity and morale drops.
Now, some restaurants are able to offer more flexible schedules to employees and have relaxed dress codes. However, not every restaurant is like this. Your employees need to be able to understand and follow the values of your business.
Limited Space to Experiment
A restaurant doesn’t have as much room as a large corporate to navigate and make mistakes. So, it’s worth investing additional resources and time to find a proper cultural match. In a larger business, someone who is a bad culture fit might affect the morale of the immediate team members, but that may be where the ripple effects stop. In a restaurant, it’s likely that everyone who works there and the customers could be affected.
The Ripple Effects
Earlier, we touched on a few ways in which bad culture can affect the business. Here’s a bulleted list that outlines a more extensive list of examples:
- Bad work quality
- Lowered productivity
- Lowered job satisfaction
- Decreased morale
- Poisonous work environment
- Higher employee turnover
- Stressed, possibly resentful employees
- Decreased profits
- Lost customers
Say that Bob and Jane see their co-worker at a restaurant constantly arrive late and leave early. He calls in sick often and shows up with ripped jeans, not allowed in the dress code. He is slow getting to customers and doesn’t refill waters as often as others on the waitstaff. Bob or Jane (maybe both) may begin to question why they’re even bothering to be productive employees when this guy does what he wants and gets paid the same as them. They resent the employee and begin to think less of their boss for hiring this person. Bob or Jane leave the position, and the search must begin anew for another employee.
Even if your restaurant is laid-back, a poor culture fit can still be harmful. Take a coastal restaurant that encourages employees to wear T-shirts and shorts. A new employee is hired who checks off all the hard skills on paper. Everyone’s excited, but problems may arise quickly if this employee shows up each day wearing a button-down shirt and slacks. For instance, the employee may not mesh with other team members and lose motivation to work. It’s costly to keep an unproductive worker around, and if that worker leaves, to go through another hiring process.
Diversity Is Important
You can still have diversity in your small business while hiring for cultural fit. Actually, having a diverse workforce can help your business become quite successful. We want to emphasize that a cultural match does not equal hiring people from the same backgrounds and with similar experiences.
Nailing Down the Fit
To be sure, business culture can be tough to nail down. Since it’s important that everyone in the business aligns with its values, how can a business succeed if half of the employees are creative thinkers and half are more rigid thinkers? It’s because culture goes deeper than that. What type of thinker you are matters less than attributes such as self-awareness and ability to collaborate effectively. So, a business filled with employees who practice different methods of thinking/approaching problems can still be extremely profitable. These employees just have to align with a company culture of, say, respect, and collaboration. Having diverse people in your business is an excellent thing, but the culture fit still needs to be there.
On the most basic and practical level, the right employees matter for restaurants because they don’t have as much time and resources to spend on hiring. When you hire the right type of person, you hopefully won’t be hiring all over again in a few months when that person leaves. On a deeper level, making several poor hires for culture (or even just one bad hire) may lead to a toxic work environment and hurt the bottom line of your restaurant. If the restaurant keeps hiring people who don’t work out, there may be a mismatch between the perceived (“on paper”) culture and the actual culture. Alternatively, hiring processes may need to be changed, and the people doing the hiring should become more aware of cultural issues.
Overall, making the right hire for a business is important to employee morale, productivity, and the bottom line. To ensure you’re hiring the best matches for your restaurant, learn about Sprockets’ Applicant Matching System.
COVID-19 has had a tremendous impact on the quick-service market, posing new challenges for both operators and hiring managers. We are truly in uncharted territory as our industry manages the changing landscape. Here’s an early take on the good, the bad, and the ugly.
QSR’s thrive during economic hardship
During the last economic recession, the general public turned to more convenient and cost-effective food rather than fast-casual and fine dining.
After the housing crash in 2008, as an example, Subway added 6,000 locations to keep up with demand (Forbes), McDonald’s grew revenue by 4.5%, and Yum Brands outperformed the S&P 500 (Yahoo Finance).
Restaurant Brands International’s CEO Jose Cil recently shared in their earnings report: “we’re encouraged by early signs of improvement in sales trends across many of our major markets”.
Many QSR brands are growing during COVID-19
For the third consecutive week, restaurant chains witnessed year-over-year same-store sales improvement versus the previous period (Black box Intelligence). Papa John’s had its strongest month ever while adding 1,000,000 people to their loyalty program (QSR). Domino’s and Pizza Hut added nearly 40,000 employees to manage the overflow of delivery orders (Business Insiders). Popeye’s Chicken increased sales by 30% in Q1 (RBI Earnings Report).
McDonald’s CEO Chris Kempczinski shared his belief that during uncertain and frightening times, people will turn to the “familiar”. “Our overall view is as markets start to open up this desire to really return to familiar favorites, to brands that are known is very, very powerful. And I think the fact that we also have a strong orientation toward convenience and value that I think are also two key elements.”
This is a hard, sobering fact for the restaurant space. As the world re-opens, there will be fewer and limited independent restaurants. Most independents were forced to shut their doors, lay off their staff, and halt operations without the support from a franchisor. In fact, a recent survey conducted by the James Beard Foundation found that 80% of independents weren’t sure their restaurant would survive this crisis. For those who survive, about 60% describe their revenues as “severely depressed” (National Bureau of Economic Research).
Hiring just got very complicated
Since President Trump declared a national emergency, nearly 30 million people have filed for unemployment. The huge influx of unemployment has overwhelmed the government, resulting in delays and shortages of unemployment benefits. As of April 15th, nearly half of the workforce has not received their unemployment benefits (NPR). Recently displaced workers are, therefore, more motivated to get back to work with the uncertainty of their next check.
As other industries shutter, you should expect far more applicant flow. What may seem like a blessing, however, could lead to more time spent in the hiring process. It will be overwhelming for your hiring managers to sift through the hundreds, and even thousands, of resumes to find the right applicants. Do you feel confident that your team will pick the right people?
Employee turnover is increasing for new reasons
Employee turnover has been increasing year-over-year in the QSR industry. COVID-19 will accelerate that further. Here are a few obstacles our users are facing are they strive to retain your team.
- Childcare responsibilities
- 22% of grandparents provide childcare at no cost, but COVID has slashed this number significantly (Vox)
- The average cost for two young children outside school in more than $20,000 annually (Center for American Progress)
- As childcare centers and schools reopen, teachers are refusing to go back to work further delaying the predicament. In Seattle, teachers have created a union-esque fight against returning to work (Seattle Education Association).
- Employees make more off unemployment
- The average caregiver makes $22,470 per year, or $1,800 per month before taxes (Glassdoor).
- Based on the state, unemployed workers receive between $300 and $500 per week. Unemployed workers in 29 states are currently getting an extra $600 per week (USA Today). That could result in upwards of $4,400 of potential monthly income plus the $1200 per person and $500 per child (IRS). We are starting to hear that caregivers are opting to file for unemployment and quitting their jobs.
- Employees are getting sick or are afraid of getting sick
- As of May 8, nearly 1.3 people have been diagnosed with COVID-19. That number is expected to increase.
- The Occupational Safety and Health Act grants workers the right to refuse to work if they believe workplace conditions could cause them serious imminent harm (Time Magazine).
- The National Labor Relations Act (NLRA) states that workers do not need to go to work if they feel unsafe for “health and safety reasons (Time Magazine)”.
QSR’s will struggle to hire the right people because of their current technology.
We started 2020 with historic low unemployment rates. Many hiring software solutions are therefore built to solve the “labor shortage” problem and neglect proper screening features. As your team must get more selective and efficient, one-click applications and QSR social networks are no longer the only software you need. It is important that you have a screening tool to help automate the influx of new candidates from 15%+ unemployment.
Turnover will get very, very expensive.
With an uncertain economic future, one way to control costs is to reduce your turnover. According to the Society of Human Resource Management, it costs $4,969 to hire, train, and replace an hourly worker. With a staff of 50, you’ll need to hire roughly 66 people (or 5.5 per month). That’s if you maintain the industry average turnover rate of 132%. So, hiring 66 people for $4,969 equals $327,954 in turnover costs. This includes, but is not limited to, resources to interview, train, and onboard.
At Sprockets, we are striving to learn from our customers daily. We currently help operators in brands like McDonald’s, Taco Bell, and Chick-fil-A with hiring the right people and reducing turnover. If you have any questions or comments, please do not hesitate to reach out to us. We would love to hear from you.