How HR Policies & Procedures Can Make Or Break Your Restaurant

Food & Beverage
Denis Yankovsky August 25, 2020 18 min read
Restaurant HR policies

Quick Guide

    It may sound surprising, but when it comes to employee management, the challenges that small local cafe owners and large international chains managers are facing are pretty much the same: 

    • How to create clear and robust HR policies and make your staff respect and follow them?
    • How to make sure your people are engaged and motivated?
    • What’s the best way to provide them with all the data and knowledge they need?
    • How to reduce employee turnover and become a restaurant people actually want to work for?
    • How to automate the recurring, mechanical procedures and optimize the workflows?
    • How to embed clear procedures and make your people stick to them?
    • How to collect feedback from your employees and improve the response rate?
    • What’s the optimal tool to provide immediate updates and make sure people actually get them?

    HR policies, which translate directly into the quality of your team, are crucial for any restaurant and stand on the same importance level as the quality of the actual food you’re serving. And here’s why.

    Why Your Staff Is As Critical As Your Food (Or More)

    Well, there are actually two reasons for that.
    The first reason is more marketing and sales oriented: your restaurant employees are the face and the voice of your business. They say your business is only as good as your worst employee and it is very true.

    Let’s be honest, at times when any kind of food is delivered to our front door within minutes, rather than hours, great food is not worth the effort of coming to the restaurant. In fact, 38% of consumers say they are more likely to have restaurant food delivered than they were two years ago. And after COVID-19, even places that haven’t done delivery before — will.

    So when people actually go to a restaurant, they go there for the experience, which is much more than just a great menu.
    You may have the best meals in town, and your special dish, but if your guests feel confused, unwelcome, or unheard after interacting with at least one of your team members — they may stand up and leave before the meal is even served. Or finish as soon as possible and never return. So by investing in employee training, you’re really investing in your business

    The second reason is more operational, and it revolves around the restaurant’s staffing strategy, HR policies, and procedures. There is a direct relationship between the hiring strategy and restaurant turnover. And the numbers are rather scary.
    Reports showed a mind-boggling 75% restaurant staff turnover rate in 2019, which means MOST of restaurant staff members weren’t seeing the value in staying for the long term… The main reasons for it are low pay, tough hours, and not feeling appreciated or valued by the restaurant managers.  

    In fact, discomfort caused by the HR policies, or even a particular manager’s behavior which results in feeling underappreciated and disengaged — is often the main reason why people quit, far above low pay, or other working conditions. 

    Nearly 9 out of 10 millennials (those between the ages of 22 and 37) would consider taking a pay cut to work at a company whose mission and values align with their own, according to LinkedIn’s Workplace Culture report

    Most employees rank professional development and training as the most important HR  policy, in fact as many as 36% of Gen Z, 25% of Millennials, 20% of Gen X, and 21% of Baby Boomers view investment in employee training as a top factor when considering a new job, and 94 percent of all employees would stay with a company longer if offered an investment in training, according to the LinkedIn Global Talent Trends 2020 report.

    At the same time, most restaurateurs name hiring as their biggest challenge to success. Put bluntly, the workforce is often the most irritating, frustrating pain point for restaurant owners and managers. 

    In a recent Restaurant Industry Report, most restaurant owners and restaurant HR managers named Employee Hiring & Training as their 2nd and 3d biggest challenges with 51% and 35% respectively. 

    Top Restaurant Challenges

    Employee turnover is not only exhausting for the HR team or bad for customers but also really expensive: replacing one hourly employee costs around $1,500 these days. 

    Staff appreciation, on the other hand, is an incredibly inexpensive way to improve your employee retention, build engaging workplace culture, and guest experience — all at once. 

    So there’s no wonder HR policy is one of the biggest challenges for any small business.

    Why Your Restaurant Needs HR Policies

    avoid restaurant failure by implementing these policies
    Photo by Michael Browning on Unsplash

    Restaurants are among the top employers of the US economy — some 14.7 million people were working in the restaurant industry in 2019, 1 in 3 Americans got their first job experience in a restaurant, 1 in 3 employed teens currently work in the restaurant industry, nearly 6 in 10 adults have worked in the restaurant industry at some point during their lives.

    So it’s safe to say that for the most part, there are no specific backgrounds or skills required to become a restaurant employee. Moreover, the job is so universal, there is no specific type of personality that makes typical restaurant employees — people of all backgrounds, views, skills, and beliefs come to work together and share the workplace, the shift, and your customer’s impression. 

    So you HAVE to have some unified principles and standards for your employees to be able to represent your restaurant adequately. Policies for restaurant employees play an important role in keeping your business running, so if you prefer you can call them “guidelines” if that makes you, or your employees, feel more comfortable. 

    When you have just a couple of employees, you might get away with some informal or even verbal agreements, but as your business grows, so does the number of HR policies and their complexity. The best way to keep everything in order and ensure your employees are aware of their rights and the policies they must comply with is an employee handbook

    In this article, we will try to list the most important ones, and even provide you with some “cheats” and shortcuts, so that you could create your own restaurant employee handbook using one of many templates offered as part of modern employee apps.

    Try Connecteam

    #1 Employee App for Restaurant Policies & HR Needs.

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    Which HR Policies Do YOU Need And Why?

    Creating effective and legally compliant HR policies for a restaurant (or any organization, really) is a unique process. So it’s up to you to recognize the needs of your restaurant. You don’t want your employee handbook turning into a novel-length saga. But you also don’t want to miss important guidelines unique to your business, like a Code of Conduct.

    Take the time to consider what policies match your business and its direction. Do you have colleagues who manage restaurants with their HR policies already in place? Then, it’s a good time to ask for some tips or templates. But don’t forget that your restaurant is its own unique dish, and you need to consider what goes into it. 

    For example, if you’re planning to grow your team and advance employees in the ranks over time, having a detailed policy helps. Not only will it give your employees an incentive to excel, but it will also help retain them longer, keeping knowledge and experience in your business.

    The employee handbook is one of the most popular examples of the HR policy documents used in this industry, about 68% of all restaurants offer it to their new hires

    An employee handbook is usually presented to the new staff member before they actually start working and its role is to prepare a new employee for their new job and respective responsibilities. However, it also helps employees get comfortable and feel welcome at your company. Usual contents of an employee handbook are:

    • Basics of Employment 
    • Workplace Policies
    • Code of Conduct
    • Compensation 
    • Benefits and Perks
    • Working Hours, PTO and Vacation
    • Resignation and Termination

    Another workplace policy document widely used for non-desk employees, restaurant staff included, is a new hire checklist, also called onboarding checklist. A typical new hire checklist  template usually includes:

    • Employee benefits documents
    • Employment forms required by law
    • Employee contract
    • IT department details
    • HR department 
    • Stationery
    • Obtain employees’ personal data for emergencies

    If you’d like to get deeper into the details of what kind of HR policies are there overall, and which ones you should employ for your restaurant staff, read on — we’ve broken them down for you by topics.

    By the way, If you’d prefer someone to talk you through that instead, feel free to book a free demo session with one of our product experts, and you will build a great HR policy template for your business together over a quick call.

    Photo by Louis Hansel @shotsoflouis on Unsplash

    Restaurant HR Policies Examples

    Law & Order

    The basic policies required to operate and grow a restaurant business are those required by law. You can’t skip those, especially since ignoring labor laws can get you in deep legal problems.

    You should probably consult with your lawyer to get an up-to-date list of must-have policies in your state. Note that many federal and state laws only apply to businesses with a certain number of employees. So check which regulations apply to you as your operation expands.

    HR policies for restaurant required by federal law:

    • Work hours
    • Worker’s compensation
    • Medical leave
    • Discrimination
    • Pay

    Policies that are required in some states, but are probably good to have no matter where you operate:

    A quick note about sexual harassment in the restaurant industry, because it demands attention. According to statistics, the American restaurant industry is among the (anti)leaders by the number of sexual harassment claims

    That might be because, again, according to statistics, between two-thirds and 90 percent of all women working in the restaurant industry experience sexual harassment. This isn’t only awful but can cost you, as the owner of the place, your reputation, and quite a bit of money.

    So it’s crucial that you take a hard line against sexual (and other types of) harassment and make the policy known and clear to your employees.

    Keeping It Clean (and Safe)

    Running your restaurant, you probably know that you can’t go without food safety policies. Sure, you can check the expiration dates regularly, and make sure the forks are clean. 

    But your employees need to make an effort to comply with regulations. You might be well versed in the local legal requirements for a safe food preparation and serving environment, but not all your employees are. Be sure to outline the policies in the above-mentioned restaurant employee handbook, and place signs to remind employees of the important ones.

    Food safety laws are there to protect your clients, which is important. But you also want to keep your employees safe, and having clear policies on that helps. For example, you might want to require employees to wear non-slip shoes, especially in the kitchen. Some policies can save lives. And prevent you from being involved in unwanted lawsuits.

    Minimum Wage and Tips

    The current federal minimum wage is $7.25 per hour and has not gone up since July 2009. However, there are some states, cities, and counties that impose a higher minimum wage rate. In addition, when the state, city, or county minimum wage rate is higher than the federal rate, the employer is obligated to pay their workers the higher amount. However, we need to make clear that the minimum wage for tipped workers is actually lower than the regular minimum wage, but that does not mean under any circumstance that employers can pay tipped workers less than regular staff.

    The Fair Labor Standards Act mandates that any employee who earns $30 or more per month in tips must be paid at least $2.13 in wages. Therefore, a waiter, bartender, or another service employee who does receive tips, then your employer is only required to pay you $2.13 per hour in wages. With that in mind, the total amount earned ($2.13/hour plus tips) must equal the federal minimum wage. As far as HR policies for restaurants go, this one is pretty key. 

    Look Sharp Online and Off

    Dress code policies are important even if you don’t have branded uniforms for your employees. Some aspects of the dress code have to do with the aforementioned safety and hygiene (like non-slip shoes and hair-nets). Others are mostly about appearances. 

    For example, you might want all your servers to wear a uniform, while the bartender is required to just look presentable but gets more freedom in her fashion choices.

    Another place you want to look sharp is online. Forget about the damage a negative Yelp review can do, and remember the old “taco-licking” incident from a few years back. It’s a hard one to forget. No restaurant owner wants to see their business in the news, in some photo-gone-viral of a disgruntled employee doing something disgusting. And potentially devastating to your business.

    Almost every employee now has a smartphone with a camera at their disposal, and social media as a platform, so you may want to make sure your employees are extra happy. Happy employees don’t post mean things about their employers…usually. 

    However, since you can’t keep everyone happy all the time, the least you can do is have clear policies for dealing with employee actions that hurt your brand’s reputation. You want to deter poor employee behavior by taking consistent, meaningful actions against those who break the employee code.

    Actually, you can even provide your social media manager or marketing agency with a checklist to complete whenever social drama happens.

    Easy-on, Easy-off

    The restaurant industry is one with high turnover rates. Only very few of the 15 million restaurant employees bussing tables and flipping burgers will continue to work in the industry. As much as you might want to keep employees with you longer, and take steps to do so, your turnover rates will always be higher than it would in most businesses. 

    Does that mean you should just say “to heck with it”? Absolutely not. What this means for you is that you need to set hiring, training, and termination policies as soon as possible, if you haven’t yet.

    Policies are also an important tool in streamlining the training process. Instead of hoping the other servers inform your new employees about breaks, employee meals, and tipping policies? These should all be detailed in your restaurant employee handbook. As part of the employee training process, you can even quiz them on it.

    Employee training

    Create an employee quiz

    Feeding Your Employees

    If you choose to feed your restaurant employees, that’s actually an easy way to boost the value of the job and can even help lower your turnover rate. However, ensure that you create policies around what meals employees can and cannot eat. For example, if a dish calls for expensive ingredients then that’s probably one you don’t want your staff to eat so be clear on the rules.

    Additionally, allow your employees to take food home – especially the dishes created that you couldn’t sell. It’s a win-win! You minimize waste while your employee gets free food.

    Drug Policy

    Drug abuse is an epidemic many countries are facing, therefore you should make sure that your restaurant has a clear substance abuse policy. Ensure that your employees, current and new, know what the expectations are and be sure to frequently remind them of how important following the policy is.

    How you want to set up the policy is up to you – some restaurants have a zero tolerance and may require unannounced drug testing. Other restaurants don’t allow for any drug abuse that impairs the individual to the point that it dissatisfied customers, reduces employee effectiveness, and can even lead to a dangerous situation for clients and staff.

    Employees must know what the consequences are if they violate drug HR policies for restaurants, where it’s a warning or losing their job.

    Onboarding Checklist

    Employee onboarding is the process your business takes in order to properly welcome a new employee to the team and its culture. When correctly going through onboarding, you have a higher chance of retaining employees and boosting engagement. Follow these simple tips:

    • Take your time. Training takes time, so don’t rush it because studies have shown that 31% of new hires leave within the first six months and 68% of those leave within three months. Why? Because they’re still learning the ropes, how the company operates, where they fit in, and more. Processing that much information takes time so make sure the onboarding process is not rushed and goes past the first day.
    • Set clear goals. Create clear goals and frequently check in to assess the progress, this helps the new hire focus on what’s needed and their target. Don’t confuse the new hire so they’re running around aimlessly instead be clear to avoid confusion and to make sure they deliver on the goals you set forth. After all, no one is a mind reader.
    • Have veteran/seasoned mentors. A survey discovered that 56% of employees believe having a work mentor is key when first starting out. A mentor helps break down the day-to-day grind, explains how management works, and is available to answer those “stupid questions”. By having a mentor, the new hire feels happier and on track.
    • Get feedback. After the first day, the first week, and the first month, be sure to ask the new hire for feedback on their onboarding experience. By gaining feedback, you are able to make changes accordingly so everyone one someone new joins the team, they are exposed to the top training methods.

    How To Create New HR Policies With An Employee Management Mobile App?

    So at this point, you’re probably thinking that you have huge paperwork to do in order to create all those HR policies for your restaurant employees?

    Not really. Everyone has a mobile phone so use it! Get a team chat app and you can easily reach your staff in a snap. Today, more and more restaurants are doing this switch and seeing incredible results. The market is already there and it’s time you caught up!

    To give you an example, have a look at “Letz Sushi” —  a sushi restaurant in Denmark with over 200 employees as an example, and see which checklists and HR policies they found beneficial for their restaurant and how they create those using an employee management mobile app.

    How An Employee Management App Can Help Your Restaurant?

    Repeating and structured tasks, checklist and more

    Create an opening/closing checklist

    • Digital checklists and forms reduce friction from daily activities, automate information flow, enhance response time, and build a better oversight for you as a restaurant manager/owner to stay on top of things. The popular examples of how restaurants use the checklists include information and guidelines, recipes, food storage life/storage conditions checklists, and reminders, hygiene control, equipment malfunction report, kitchen inspection reports, incident reports, and more.
    • GPS time tracking will show you the exact location of your team in real-time, and will never let them try to fool you again with “buddy-punching” and time theft.
    • Employee timesheets can now be collected and exported for payroll in a click.
    • You can save time by easily booking jobs and assigning team members,  be notified when team members acknowledge or reject a shift, check-in late, or when they complete their tasks.
    • Realtime push notifications and updates for both formal and informal announcements, and work chats, both group and individual will let you streamline your team communication and make sure everyone stays in the know with relevant information.
    • Create separate groups for waiters and kitchen staff, or organize them by the branch — it’s all up to you. HR announcements, top waiters recognition, menu updates, or any other important messages will not be missed.

    Watch how you can create custom checklists for your restaurant using Connecteam Employee Management App!

    Bottom Line On HR Policies For Restaurant Employees

    The restaurant business is all about the experience guests are getting at your place, so recruitment strategy, training, and HR policies are some of the most important challenges to deal with, the same as finding a great chef and figuring out an amazing menu.

    HR policies and procedures registered in the form of digital forms and checklists help HR managers and business owners to set clear rules and expectations for the staff to follow, and have them accountable for it. 

    Most of the restaurant employees are young and dynamic people, who constantly use smartphones/tablets, are constantly on the go, and don’t have time for paperwork and other lengthy procedures, so consolidating all the HR-related and professional interactions in a single all-in-one mobile employee app is the only natural way to go in 2020.

    Join thousands of restaurants who trust Connecteam

    Connecteam is the best tool to manage employee engagement, development, and relationship. Streamline daily operations, boost engagement, strengthen the company culture, align employees with company policies, engage internal communication, create training programs, and so much more.

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