Employee Turnover Rate

The formula is simple:

(Number of employees who left ÷ Average number of employees) × 100

Let’s say you had an average of 20 employees, and 15 of them left over the year.
Your turnover rate would be:

(15 ÷ 20) × 100 = 75%

While this might seem “normal” for the restaurant world, don’t be fooled. Every exit costs you more than you think.

The Real Cost of High Turnover

Replacing employees doesn’t just take time—it takes money. And a lot of it.

Here’s what goes into each replacement:

According to industry research, replacing just one restaurant employee can cost anywhere from ₹2.5 to ₹4 lakh. Multiply that by 10 or 20 exits a year, and you’re looking at tens of lakhs lost annually.

How High Turnover Hurts Your Guest Experience

It’s not just about cost. High turnover disrupts your operations in ways that directly impact customers.

New hires take time to:

• Learn your POS systems

• Understand your menu

• Get used to your team’s workflow

Until they’re fully trained, service quality suffers—and so does customer satisfaction. Worse, stressed staff may burn out faster, creating a vicious cycle of departures.

Spot the Patterns: Not All Turnover Is the Same

Smart restaurant owners go beyond tracking overall turnover. They dig deeper.

Ask yourself:

• Are servers leaving after 2–3 months?

• Are kitchen staff disappearing after just a few weeks?

The reasons often vary. Servers might leave due to poor tipping culture or long hours. Kitchen teams often cite scheduling conflicts or poor work environments.

Knowing where and why turnover happens is the first step to fixing it.

How to Reduce Turnover in Your Restaurant

There’s no magic fix, but a few key strategies can dramatically reduce turnover:

• Pay competitively (or at least fairly)

• Offer flexible scheduling

• Provide growth opportunities

• Foster a positive work culture

Restaurants that invest in proper onboarding, regular feedback, and employee recognition programs see significantly lower turnover—and happier teams.

Make Turnover a KPI You Track Every Month

Top-performing managers treat turnover as a key performance indicator (KPI). They monitor it closely and take action when it spikes.

Why? Because retaining good employees has a ripple effect:

• Less money spent on hiring

• Better service consistency

• Higher customer satisfaction

• Stronger team morale

In a business where people make the experience, reducing turnover is a true competitive edge.