HR & Service

Top-performing managers harder to retain, research firm indicates

By Dina Berta

DALLAS (July 11) - As the economy picks up and unemployment slows down, top-performing restaurant managers are getting harder to keep, according to a recent survey of restaurant companies by People Report, a human resources research firm based here.

People Report, in a quarterly survey of its 88 member companies, found that 73 percent of top-performing employees left their jobs voluntarily. Their reasons for leaving included quality of life, compensation and benefits, and lack of advancement.

"We’re seeing in the last year and a half with unemployment dropping, voluntary termination at a higher level since 2003," said Shyam Patel, senior research analyst for People Report.

National unemployment was 5.1 percent in May, versus 5.5 percent in May 2004, according to the U.S. Bureau of Labor Statistics.

People Report tracks quarterly human resource practices, including diversity, turnover and recruitment results for restaurant chains. Companies that use People Report services represent nearly every segment of the industry, from quick service to upscale full service. They operate more than 14,000 units and employ more than 40,000 people.

People Report recently began asking members to separate the turnover figures for top-, average- and bottom-performing managers.

Shyam Patel, senior research analyst for Dallas-based People Report

"One of the huge measures in human resources is turnover," Patel said. "It’s not the most perfect measure in the world, but companies need to [look at] segment turnover if they are going to focus on retaining top talent."

Top performers do have more tenure than bottom performers. The average stay of those better-performing managers was nearly four years, versus an average of three years for bottom performers.

Top performers also boasted 3 percent more women than bottom performers did, which is significant because female employees tend to have a longer tenure than males in the industry, Patel said. Yet women accounted for only 29 percent of new hires in 2004.

"Clearly, they are an untapped resource," he said.

In addition, restaurant operators may need to examine how well they are paying their top performers if they want to keep them, he noted.

The average salary for top-performing assistant managers was $2,500 more than for bottom performers. Yet the average cost of replacing a manager is close to $25,000, and it is probably higher for a top performer, he said.

"One of the reasons top performers were leaving was compensation and benefits," he said. "Compensation is clearly something that can be easily addressed."