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  • Essay / Reducing Turnover in the Restaurant Industry - 1619

    The Bubba Gump Shrimp Company, a national chain of franchised seafood restaurants, prides itself on its excellent customer service and affordable, high-quality food. quality, and knows that to achieve its goals, it needs a culture that attracts and retains the best employees (Bubba Gump Shrimp Company, 2011). In an industry known for high employee turnover and low job satisfaction (Prewitt, 2000), the Bubba Gump Shrimp Company reduced “management turnover from 36% to 16% in 2 years” ( Aamodt, 2010, p. 397). What intervention opportunities exist for restaurant operators to reduce turnover of restaurant managers and staff and, more importantly, what performance improvements can operators expect? While openly competitive salaries and benefits are a central requirement, operators must additionally create a culture that challenges employees and provides opportunities for growth, in an environment that encourages the integration of work and life family. Full service restaurants like Bubba Gump Shrimp Company accounted for 85% in 1999, up from 117% in 1995, and although the industry has shown significant improvements, restaurants experience turnover rates more than double those of other retail establishments retail (Zuber, 2001). High turnover rates contribute to annual training costs of nearly $4.3 billion in the restaurant industry (Zuber, 2001), while Bliss (2001) estimates that the cost of replacing a manager is between 200% and 250% of annual compensation, making employee selection and retention a critical business issue for controlling net costs in low-margin businesses. Bubba Gump Shrimp Company's choice to focus on management retention was a smart move, because in restaurants, ...... middle of article ......t Review, 31(1 ), 72-92. doi: 10.5465/amr.2006.19379625 Kacmar, KM, Andrews, MC, Van Rooy, DL, Steilberg, RC, & Cerrone, S. (2006). Of course, everyone can be replaced… but at what cost? Turnover as an indicator of unit-level performance. [Article]. Journal of the Academy of Management, 49(1), 133-144. doi: 10.5465/amj.2006.20785670 Kinicki, A. and Kreitner, R. (2008). Organizational Behavior: Key Concepts, Skills, and Best Practices (3rd ed.). Boston: McGraw-Hill Irwin. Prewitt, M. (2000). Studies reveal that operators create a staff turnover problem. [Article]. Nation's Restaurant News, 34(36), 8. Wharton, A.S. (1993). The emotional consequences of service work: managing emotions at work. Work and Professions, 20(2), 205-232. doi:10.1177/0730888493020002004Zuber, A. (2001). A career in catering: High turnover. [Article]. Nation's Restaurant News, 35, 147-148.