The Main Ingredient A (Tips 1-8)

Tip #1-Hiring the Right People

Essential to retaining good employees is hiring the right people in the first place. In this labor market, restaurateurs need to find creative ways to search for new employees, be clear about the qualities they are looking for, and use interviewing techniques that allow them to identify the best people. Hiring the right person- not just just filling the position- avoids the long-term costs associated with a bad hire, i.e. recruiting, retraining, higher unemployment premiums, poor employee moral, and customer dissatisfaction.

Tip #2- Recruiting
Some restaurateurs are using multiple strategies and nontraditional sources to find good employees. For example, Legal Seafoods, Cambridge, MA, posts signs on premise inviting prospective employees to attend open houses to learn about the restaurant and have informal interviews. Others recruit at local culinery schools or, in the case of a group of Seattle restaurateurs and hoteliers, set up a hospitality network to discuss human resource issues and organize their own job fairs several times a year. Some tap into other labor pools, such as welfare recipients trained by government agencies, disabled persons, seniors, and leasing companies. An increasing number of restaurateurs are using Internet employment sites and/or listing employment opportunities on their own websites. [Be sure to check out MHEF's own job bank!!]

The best source of labor might be the employees you already have. Restaurateurs report that one of the most successful ways they find good employees is to look withing their organization- both promoting current staff and turning to them for referrals. "Good people tend to know good people," says Thalia Loffredo, co-owner, Zoe, New York, NY.

Many restaurants provide incentives for employees to refer candidates. Referral bonuses tend to range from $50 to $300 and are usually paid after the new hire has been on the job for a specified amount of time. Some restaurateurs pay out the bonus after 30 days; some after 90 days and some stagger payments. At Wild Jack's Steaks and BBQ, Orlando, Fl, employees recieve $30 when their new hire completes 30 days and another $90 when their new hire had been on staff for 90 days.

Tip #3- The Interviewing Process
Once you've got candidates coming in the door, the next step is to find out if they are the right fit. To do this effectively it's important to identify the qualities you are looking for. Kathleen Woods, president, Elliot Solutions, a consulting company specializing in human resources, says, "It is essential to develop a description for each job that not only includes skills but character and attributes." The personal interview is often the best insight. Some successful strategies from restaurateurs:

"We show people the menu and ask them to tell us which item they would like to order and why. This tells us about their enthusiasm and knowledge of food. Energy level is also important and we can get a feeling from body languauge and eye contact- we can see if they seem excited about being here."
Barbara Sibley and Margaritte Malfy, partners, La Palapa, New York, NY

" For the second iterview we have a 'Peer Tour' of the restaurant led by a member of the staff. This shows potential new hires where they will be working, so there are no surprises and the staff members get a chance to form an opinion."
Jeff Phillips, GM, The Olive Garden, Ft. Walton, FL

" We only use open-ended questions during a series of four interviews (three with assistant managers, and one with me) for potential hires. Asking questions that can't be answered yes or no is our most effective tool for judging character."
Jim Guarasci, owner, Pasta Cucina, Suffern, NY

Tip #4- Approval Period
Some restaurants don't complete the formality of hiring until the employee has worked for a specified length of time. This gives both the employer and the employee time to discover if they are suited to one another and provide an easier out if they are not.

"We call it a 'training period' which we use to evaluate their work and how they are fitting in. There are times when we part company after four weeks."
Joseph Majorano, owner, Tre Scalini, New Haven, CT

Tip #5- Exit Interviews
Interviewing employees before they leave can provide invaluable information about your workplace. Exit interviews are a great reality check and often identify not only problems, but those aspects of the workplace that are running smoothly.

"We ask departing employees to talk honestly about all aspects of their jobs. We want to know not only the negatives, but the positives as well. These intervies help us to improve our work environment and reduce mistakes."
Martin Shapiro, GM, Tribeca Grill, New York, NY

Tip #6- Next Steps
Once you've hired the right people, keep them by giving them the proper tools to do their jobs. Excellent companies invest in their employee's success- they give them the training they need and nurture a culture of respect and caring. The best recruiting plan in the world ultimately won't matter if a work environment is negative and relationships with management aren't supportive.

Focusing on retention as a recruiting strategy makes restaurants more competetive as employers and the labor shortage seem less intimidating.

Tip #7- Cash Bonuses and Incentives
Offering bonuses is a powerful way to reward both front- and back-of-the-house employees for meeting goals and to acknowledge exceptional performance. Some tips on designing bonus and incentive programs:

-Set clear goals that can be measured and attained. Incentives don't work if goals are unreasonable or if employees can't see how they are impacting the business.
-Define standards for bonuses and other incentives nd be clear about how they will be paid. Execute programs consistantly.
-Establish accurate benchmarks that measure and trigger bonuses; document everything.
-Giving cash on the spot is an easy way to instantly reward anyone and it is universally appreciated. When giving cash rewards, make sure the dollar amount is appropriate and meaningful to the recipients, and be consistent.
-Check with your accountant to see if any of your monetary rewards should be considered a taxable benefit.

Tip #8- Insurance Programs
Traditionally, health insurance has been a management benefit, but now more restaurants are making it available to hourly employees as well. There are many types of coverage (health only, with dental, with dental and vision, etc.) and employers contribute in a variety of ways. Paying 50% of the premiums after a specified amount of time on the job (90 days to one year) is common; a few cover the entire cost.

Some thoughts:
-Talk to your employees to determine what type of coverage is most meaningful to them and how much they feel they can afford to contribute.
-Consider offering options to suit the maximum number of employees. Some restaurants offer two plans, one with more coverage and higher premiums, and another with less coverage and lower premiums.
-When the policy comes up for renewal, shop around for the best premium and coverage- your insurance broker can do this. Check with your local chamber of commerce and state restaurant associations for group policies.
-If you can't afford to finance or contribute to premiums, consider simply organizing a group plan and administering the payment of premiums from paychecks.

For more information, please visit American Express.