The Turnover Rates in the Fast Food Industry

The fast food industry has exceptionally high turnover rates. Employee turnover in the 150-percent range is not uncommon, and Business Insider reports that a restaurant employing 20 individuals can expect to hire 30 each year. This turnover rate is higher than average, and restaurant owners and managers are required to perpetually recruit and train employees, and to file new employee paperwork. A few exceptions exist, but fast food employee turnover rates are at an all-time high in 2018.

Fast food industry wages are not keeping up with demands for the workforce. New technology that's implemented at restaurants requires training and skill development, but the employees do not receive a wage increase based on those skills and job requirements. A strong economy also has higher paying opportunities that reduce the overall pool of employees. Fast food restaurants that have lower wages struggle to compete, when competitors offer high pay and an opportunity for advancement for the same pool of talent.

Self-serve technology and ordering systems are changing the nature of staffing in the fast food industry. Some systems require employee oversight to ensure that orders are processed, but the brisk kiosk-style of ordering is advancing in the marketplace. Automated ordering has the potential to reduce the number of employees required for fast food restaurants. These automated ordering systems can have a negative effect on tips, and a large-scale effect on the job market.

Some turnover is natural in the fast food industry. Many jobs are entry level and occupied by a young demographic that will eventually leave for college or for new opportunities. Higher than average turnover rates are expected, but 150-percent is excessive, and ultimately, creates more work for management and ownership, as they struggle to maintain staff. Turnover on the management level is especially difficult, as that segment of the staff is responsible for hiring and training processes.

Not all fast food chains experience high employee turnover rates. The Harvard Business Review highlights Pal's Sudden Service in Virginia and Tennessee. This restaurant chain invests heavily in training, and has an intensive hiring process that ultimately selects the most qualified candidates. The restaurant's turnover rate is less than 2 percent for assistant managers; fewer than 10 managers have left in the company's 33 years of business, among 26 locations. Those turnover rates are exceptional for any business, and incredibly unique in the realm of fast food workers.