Conventional wisdom would have restaurants hiring their staff as part-timers, mostly as a way to get around the Affordable Care Act health insurance mandate and save some much needed money.
Of course, there are few issues with that line of thinking:
- Most indie-restaurants don't meet the threshold of having to provide health insurance to full-time employees. Small businesses need at least 50 full-time equivalent employees to need to worry about the mandate.
- Benefits like health insurance and PSL benefit staff, the restaurant and customers.
- You'll get hit with lots of hidden costs of employing a part-timer.
For the restaurant industry, most places will see a turnover rate of 110%! Establishments are literally hiring for the same position more than twice a year, costing the average full service restaurant operator $146,000/year.
So you might be asking yourself, "Why should I invest so much time, money and effort into someone who, statistically speaking, going to leave in my employ in a few months?"
A legit question.
Here are three reasons why you should consider full-time staff over part-timers.
Reason #1: Part-Timers are more likely to leave your Restaurant
One of the biggest problems with hiring part-timers is that it ends up costing restaurants more in the long run. A lot of those costs are hidden from your financial sheets, however.
For starters, they're more likely to leave your establishment's employ. Sheetz, a food-serving convenience store & gas station, reports that 83% of their part-time staff leave each year. Compare that to their sub-25% turnover for FTEs.
That means having to search for new employees (time spent away from running your business), hiring the new employee (oof, paperwork), and training them to get up to speed (wouldn't you rather train your staff to boost their skills?). You also lose out on productivity when an employee leaves, hurting your bottom line and stressing the rest of your staff. The toll adds up quick.
Turning to more full-time employees has saved the company $925,000 in recruiting and training, according to Stephanie Doliveira, Sheetz's HR VP. It's also important to note that Sheetz employees get PTO and have access to health insurance (they meet the ACA employee mandate).
Nader Masadeh, CEO for Buffalo Wings & Rings, told the Wall Street Journal that, since 2013, they have doubled their full-time staff. FTEs now make 37% of their workforce. During that same period, they saw training costs drop 25%.
A key differentiator between PTE and FTE is psychological. For PTEs, the position is just a job; for FTEs, it can be a career. It's much easier to walk away from a job than a career.
Reason #2 - Full-Time Staff sell more than Part-Timers
At Buffalo Wings & Rings, their full-time staff ring up 6% higher sales per hour on average.
FTEs "give [customers] the same face every day. It builds a different feeling than the robot behind the counter," said Joe Sheetz, CEO of Sheetz.
Six percent is a fantastic boost in sales. So sure, full-time staff cost more to have on the payroll (especially if other benefits are thrown in), but they also pull their share of weight around.
Reason #3 - Full-Time Staff are more invested in their employ
Part-timers are also more likely to just not show up to their shift, according to Masadeh. Makes sense. Why should they be invested in the restaurant if the restaurant isn't invested in them?
Absenteeism translates directly into productivity loss which, again, hurts the bottom line. Not to mention an extra-stressed staff isn't going to be able to give your guests the quality service you want them to get.
According to Sheetz employee surveys, FTEs report they're more committed to the company and willing to put in extra effort more than PTEs do. And, according to Doliveira, higher employee engagement correlates directly to higher customer-service marks.
Buffalo Wings & Rings have also reported lower absenteeism among full-time staff compared to their part-time staff.
It just makes financial sense to have more FTEs on your staff. That's not to say every person you hire should be full-time. Sometimes a part-time staffer makes more sense. It depends on your bar or restaurant's needs and situation. But if you think you're saving big money by going heavy on part-time, you're sorely mistaken. You might be doing the opposite.
Either way, running a business costs money. And you get out of it what you put into it. Question is where you want to invest that money.