In an industry known for its dynamic pace, workforce stability remains a critical challenge for restaurant operators. Analysis of U.S. Bureau of Labor Statistics (BLS) data indicates that the average annual turnover rate in the restaurant industry has hovered around 80% over the last decade.

This report synthesizes current data from the BLS, respected industry sources like Toast and Paytronix, and other research to provide operators with reliable benchmarks, cost implications, and evidence-based strategies to stabilize their workforce. Understanding your employee retention rate, and how it compares to national benchmarks, is the first step toward building a stable team that delivers consistent guest experiences and protects your bottom line.

Retention by Restaurant Segment and Position — 2026

While it is widely accepted that retention rates vary significantly across different restaurant segments and job roles, precise, publicly available benchmarks for 2025 and 2026 are limited. General trends indicate that fine dining establishments tend to have higher retention due to better compensation and career paths, whereas quick-service restaurants (QSR) often experience the highest turnover rates, frequently exceeding 100% annually.

Restaurant Segment Estimated Retention Pattern
Fine Dining Higher retention (better pay, career paths)
Casual/Full-Service Moderate retention
Quick-Service (QSR) Highest turnover (often >100% annually)

Similarly, retention differs by position. Management roles typically show stronger retention due to salaried compensation and benefits. In contrast, high-stress, entry-level positions often see the most churn. A 2025 survey by Toast found that while employees value their jobs, key pain points can drive them away, highlighting the importance of strong leadership and a positive work environment across all roles

The True Cost of Restaurant Turnover — 2026

The economic impact of employee turnover extends far beyond recruitment expenses. The cost to replace a single hourly employee is significant, with credible estimates placing the figure at approximately $5,864 when accounting for recruiting, onboarding, training, and lost productivity.

For an average restaurant, these individual costs accumulate quickly. Industry analysis from Paytronix suggests that a typical restaurant can lose $150,000 annually due to staff turnover alone.2 This financial drain underscores the high return on investment associated with effective retention strategies.

Position Category Average Replacement Cost (Estimate) Key Cost Components
Hourly Staff (FOH & BOH) ~$5,864 Recruiting, interviewing, training, productivity loss, service errors
Restaurant & General Managers $10,000 - $20,000+ Executive search fees, extended training, operational disruption, team morale impact

Note: Cost estimates are aggregated from multiple industry sources and can vary based on location, brand, and role complexity.

Restaurant Industry Separation Rates — 2020-2024

These challenges affect thousands of restaurants, bars, and hospitality operators daily.

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Hospitality workforce volatility has remained elevated even as the broader U.S. employment market has stabilized. The accommodation and food services sector consistently reports one of the highest separation rates (which includes quits, layoffs, and other departures) of any industry.

To understand the full scope of restaurant workforce instability, it's essential to look at official government data on employee separations. The table below presents the annual average total separations rates for the Accommodation and Food Services sector, according to official data from the U.S. Bureau of Labor Statistics (BLS).

Year Average Annual Separation Rate (Accommodation & Food Services)
2020 10.9%
2021 7.1%
2022 7.0%
2023 6.3%
2024 5.5%

Source: U.S. Bureau of Labor Statistics, JOLTS, Table 20

Key Insights from Separation Rate Data

Post-Pandemic Normalization: After a turbulent period, separation rates have shown a steady decline since 2021, suggesting a gradual stabilization of the workforce. Persistent Volatility: Despite improvements, the separation rate in hospitality remains significantly higher than the average for all private sector industries, which stood at 3.7% in 2024.

Top Drivers of Restaurant Employee Turnover

Understanding why employees leave is essential to designing effective retention strategies. A 2025 survey of over 600 restaurant workers conducted by Toast provides clear insights into the primary pain points driving turnover.

Turnover Driver % of Employees Citing as a Top Pain Point
Poor Hourly Pay 33%
Difficult Managers 30%
Difficult Co-workers 28%
Lack of Recognition for Hard Work 25%
Lack of Available Shifts 26%
Lack of Long-Term Growth 19%

Key Insights from Employee Feedback

Compensation is Key: One-third of employees cite poor hourly pay as a primary frustration, making competitive and transparent compensation a foundational element of any retention strategy.

Management Matters: Poor leadership is a major factor, with 30% of employees identifying difficult managers as a top pain point. This aligns with long-standing research from Gallup, which found that managers can influence at least 75% of the reasons for voluntary turnover.

Culture and Recognition are Crucial: Beyond pay, a lack of recognition (25%) and difficult relationships with coworkers (28%) are significant drivers of turnover, highlighting the importance of a positive and supportive workplace culture.

Industry Comparison: Restaurant Retention vs. Other Sectors

Restaurants are not alone in facing retention challenges, but the accommodation and food services industry consistently leads in workforce churn. The table below compares the annual separation rates across several major U.S. industries, based on 2024 data from the BLS

Industry Average Annual Separation Rate (2024)
Government 1.4%
Finance & Insurance 1.9%
Manufacturing 2.7%
Healthcare & Social Assistance 3.0%
Retail Trade 4.0%
Hospitality & Food Services 5.5%

Source: U.S. Bureau of Labor Statistics, JOLTS, Table 20

How Gratuity Solutions Helps You Keep Your Best People

This research demonstrates that while a high employee retention rate is a persistent challenge in the hospitality industry, its impacts can be mitigated with the right strategies and tools. Our platform at Gratuity Solutions eliminates manual tip calculation errors, ensures federal and state compliance, and enables same-day pay that directly addresses the compensation-related pain points driving employees away.

If you would like to learn more about how automated tip distribution can improve your employee retention rate, you can reach out at sales@gratsync.com.

For a step-by-step plan to reduce these costs, see our guide on [7 Proven Strategies to Improve Restaurant Retention].

References

[1] Toast. (2024). What is the Average Restaurant Industry Turnover Rate for Employees?.
https://pos.toasttab.com/blog/on-the-line/restaurant-turnover-rate

[2] Paytronix. (2025, May 13). 4 Statistics About Restaurant Staff Turnover [2026].
https://www.paytronix.com/blog/restaurant-staff-turnover

[3] Toast. (2025). What Restaurant Workers Want in 2025 [New Data].
https://pos.toasttab.com/blog/data/restaurant-employee-insights

[4] HigherMe. (n.d.). The Real Cost of Restaurant Turnover.
https://higherme.com/blog/the-real-cost-of-restaurant-turnover-5864-per-employee-and-how-to-reduce-it

[5] U.S. Bureau of Labor Statistics. (2025, March 11). Table 20. Annual average total separations rates by industry and region, not seasonally adjusted. JOLTS.
https://www.bls.gov/news.release/jolts.t20.html

[6] Robison, J. (2008, May 8). Turning Around Employee Turnover. Gallup Business Journal.
https://news.gallup.com/businessjournal/106912/turning-around-your-turnover-problem.aspx