Turnover Rate and Its Value to Business Leaders
In the restaurant or cafe business, there is an important metric called turnover rate. What does it mean, and why should it matter to you, the manager or owner of an eatery? Basically, the turnover rate is how we measure the percentage of workers who leave the business in a year, including those who quit on their own and those who were asked to leave.
It’s crucial because it tells you about the people working for you. If lots of them are leaving, it suggests there might be issues like employees not liking their jobs, not getting proper training, or having problems with how things are managed. On the flip side, if not many people are leaving, it’s a sign that your staff are happy, committed, and planning to stick around. By keeping an eye on this number, you can spot problems and make sure your workers are content, eager to work, and wanting to stay with your restaurant or cafe.
So, what are the labor turnover trends in Singapore’s food and beverage (F&B) industry?
Read More: What is the State of Staff Happiness in Singapore’s F&B Industry?
StaffAny’s team dived into data from the Labour Market Survey, Labour Research & Statistics Department of Singapore’s Ministry of Manpower (MOM) and analyzed how turnover has been trending over the past 5 years. We also compared turnover data from other industries and explored the reasons behind this trend. Here are some of the key findings from this research.
Current Turnover Rate Statistics in Singapore
The employee turnover rate is calculated by dividing the number of employees leaving the company by the average number of employees in a given time period such as month, quarter or year. Based on the latest data from the Ministry of Manpower, the quarterly average turnover rate for Singapore’s F&B industry in 2023 is 2.4% (up to Q2 2023).
If we extend the turnover rate observation to the past five years, the average percentage in 2023 turns out to be the lowest compared to the previous years. 2020 was the period with the highest quarterly average turnover rate in the last five years, at 3.3%.
Source : Labour Market Survey, Manpower Research & Statistics Department, MOM Singapore
*Data for 2023 is only up to quarter 2 because the operational year is still running.
In that year, the turnover rate in the F&B industry was quite high due to several reasons. The COVID-19 pandemic led to layoffs, furloughs, and temporary closures, which caused employees to leave their jobs due to uncertainty. Job uncertainty, health concerns, and the rise of remote work opportunities led some workers to seek more stable employment outside the industry.
Despite being severely affected by the pandemic, the F&B industry moved quickly to recover in the following year. After the government allowed eateries to reopen to the public, the average turnover percentage also decreased. Singapore’s F&B turnover rate improved to 2.8%. This decline occurred not only because of the need for labor to return to normal numbers, but also because workers needed to recover financially from the crisis they faced during the pandemic. Hence, employees tend to stay in the workplace for a more stable income.
Read More: How to Spice Up Employee Retention in Your F&B Establishment
Seasonality also seems to affect turnover. In Singapore, the major holidays are in Q1, Q2 and Q4 which are influenced by religious festivals and celebrations such as Chinese New Year (Q1), Ramadan & Hari Raya (Q2), and Deepavali & Christmas (Q4). These holidays can cause an increase in labor demand and seasonal employment opportunities. The Q3 period which in fact has fewer or no major cyclical celebrations or events may lead to high employee turnover due to reduced working hours or seasonal job instability. Some staff may still choose to leave during this slower period to find other opportunities.
Correlation Between Workforce Type and Staff Turnover Rate in Restaurant
Some of you may have asked, is there any correlation between workforce type and staff turnover rate? In fact, this correlation is clear based on the pattern drawn from the last 5 years of data we got from MOM.
In the data, the government defines the type of F&B workers into three categories. The first category, let’s call it category A, consists of professionals, managers, executives & technicians. The second category or category B consists of clerical, sales and services workers, and the last one or category C is the type of workers consisting of production & transport operators, cleaners & laborers.
Source : Labour Market Survey, Manpower Research & Statistics Department, MOM Singapore
Clerical sales and services employees have the highest resignation rate in the F&B industry, with an average of 4%. This is probably due to the high level of stress and mental fatigue when they are dealing directly with customers every day. Category of workers from production & transport operators, cleaners & laborers created an average of 3.1% turnover rate. Meanwhile, professional labor types such as Managers, Executives & Technicians only experienced a turnover rate of 1.9%.
This significant difference in numbers is not only influenced by stress levels and mental fatigue. Career clarity is also a determining factor. A career development survey of Singaporean workers found that the professionals, managers, executives and technicians (PMET) category was significantly more likely to find meaning and purpose in their work compared to administrative or service workers and cleaners and laborers.
PMET roles usually require specialized skills, education, or professional qualifications, providing a structured pathway for career progression. According to the Skills Utilisation Survey in Singapore, PMET jobs utilize more skills in almost all areas than non-PMET jobs. As many PMETs are in positions that influence how work is done or designed, their role is key to upskilling jobs as well as augmenting productivity.
Learnings for F&B Businesses From Other Industries about Turnover Management
While it’s a good sign that the turnover rate of the F&B industry has been on a downward trend in the last 5 years, it does not mean that business owners and managers are not having problems retaining their best talent. In fact, the F&B industry experiences the highest employee turnover when compared to the other 11 industries defined by MOM.
The data shows that the average staff turnover rate in the last five years is 3.4%, which puts the industry at the top of the list, followed by the administrative and support services industry (3.2%). Meanwhile, the lowest turnover rate is experienced by the community, social and personal services industry, with an average of 1.1%.
Source : Labour Market Survey, Manpower Research & Statistics Department, MOM Singapore
One reason why community, social, and personal services often experience lower turnover rates compared to the F&B industry is because of the strong sense of purpose and job satisfaction that employees find in roles related to helping others. To minimize procedural errors when interacting socially with others, people in this industry are usually equipped with customer service skills and a positive work spirit. Since this industry has similarities with F&B, learning from their approach to staff training, customer service, and fostering a positive work environment can benefit F&B companies.
Wholesale and Retail Trade also shares similarities and problems with the F&B industry. However, the average employee turnover rate in that industry is much smaller at 1.8%. The retail sector often faces high turnover rates due to factors such as seasonal work and demanding working conditions. A common tactic used by retailers that F&B businesses can learn from is using flexible scheduling, incentives, and employee recognition to retain employees during peak seasons.
One way to increase both employee satisfaction and sales performance is to use incentive programs to drive staff action. In the F&B industry, adding incentives to outlet staff that meet or outperform sales targets helps keep staff engaged, motivated and working towards increasing sales. To enable such sales incentive programs and tracking of performance, using software that allows you to gamify and monitor such activity can come in handy.
Aside from cross industry learnings, the effective use of technology in turnover management can also help in reducing employee turnover and creating a more positive work environment. For example, if you are facing problems with scheduling and timesheet management that lead to schedule conflicts which may increase stress in the work environment, then it’s time to consider using smart scheduling and rostering software like StaffAny.
Case Study: How Ya Kun Avoided Higher Labor Costs Due to Shift Errors
With this software, workers won’t have to worry about switching their work schedules or making mistakes when figuring out how much they’ve earned based on the hours they’ve worked. By investing in technology that simplifies administrative tasks, and acknowledges employee contributions, F&B businesses can create a more engaging and satisfying work environment, ultimately reducing turnover rates.
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