Innovation and forecasting trends are an important part of business. But there are other critical components to business, that isn't mentioned as frequently, such as employee turnover. This is especially hitting hard in the fast-food industry.
As reported recently at CNBC, fast-food companies are losing 100 percent (and more in some cases) of their employees each year.
Panera Bread CFO Michael Bufano at CNBC's @Work Human Capital + Finance conference in July shared that turnover in the restaurant industry is 130 percent, meaning the industry as a whole turns over more than a full workforce every year. Bufano said Panara sees a little under 100 percent, but that's still a huge number.
The turnover cost per employee according to restaurant research firm TDn2K is now over $2,000 per employee.
With turnover cost being an expensive entity plus the inability to retain employees, a natural inclination is to seek kiosks and other forms of tech to automate the process. McDonald's, in fact, spent nearly $1 billion in 2019 strictly on kiosks and various tech for its stores.
While giant fast-food companies can most likely offset this problem with tech and deeper pockets, you're most likely not going to replace humans with robots anytime soon. Therefore, there's one key lesson from this situation that you can remember as you continually build your company culture.
Shortcuts come back around to bite you.
Efforts to standardize jobs in the fast-food industry, and essentially take the skill out of them, has created turnover-proof jobs, or jobs that are easily replaceable, explains Rosemary Batt, chair of HR Studies and International & Comparative Labor at the Cornell School of Industrial Labor Relations. This model has worked for years, but it may not last much longer.
"The industry has thrived on this HR model of turnover-proof jobs for many years, because they could get away with it through a slack labor market or absorbing the cost of high turnover," says Batt. "But that model is being stretched."
Since turnover cost per employee and overall are steadily increasing along with the rise of the gig economy, this philosophy is causing fast-food chains to rapidly become reactive.
When it comes to your company, a few shortcuts can manifest in the form of opting for cheaper hires with less experience, settling for good-but-not-great infrastructure, little autonomy in the workplace, and the simplest of all--not fully addressing what's in it for the people inside your company.
People want to be heard and feel like they matter--not just another employee inside the machine.
When you don't have millions of dollars to spend to cover up issues, being precise and attacking situations (such as the employee experience) with urgency is how you'll be able to grow and compete with the giants of your specific industry.