PAR Technology : Don’t Fire Restaurant Employees; Rehabilitate Them

Every restaurant deals with lost revenue, but what about when those losses come from your own employees? According to the National Restaurant Association, an estimated 4% of all revenue in restaurants is lost to theft and it comes in many forms. From misusing employee discounts to comp meals for friends to not ringing in items, unnecessary voids, overpouring, or simply taking money from the till, whatever the reason is - it still happens.

For most restaurants, pre-tax profit margins are typically small, ranging anywhere from 0 to 15% with an average of approximately 3 to 5%. When employees accidentally overpour or intentionally void orders, it makes it harder to operate a profitable operation. While it might not be a comfortable topic to discuss openly, Jim Farrell, Vice President of Sales and Partnerships for Solink, says conversations like these are vital to keeping employees, managers, and operators on the same page.

'The NRA did a study and concluded that restaurant loss due to fraud runs on average around 4% of sales,' Farrell said. 'Couple this with the incredibly narrow margins restaurants operate on, and one can see why it is important to take this seriously and implement the controls needed to minimize your losses.'

Unfortunately, if those numbers weren't scary enough… it somehow gets worse! Factor in the time it takes to put together a hiring plan, advertise the open position, recruit a new employee, officially hire them, and then onboard them, it can set a restaurant back several weeks and several thousand dollars.

'The Center for American Progress estimated that it costs 21.4% of an employee's salary to cover the cost of finding a replacement,' Farrell explained. 'Forbes found it costs a business between $15,000 and $25,000 to replace a millennial worker. This might seem pretty doom and gloom given that staff turnover is so high in the restaurant industry.'