Brands that offer GMs bonuses between 16 and 35 percent of their base salary outpace competitors by 8.3 percent.
If a kitchen is the heart of a restaurant, then a general manager is almost certainly the brain. New data from Black Box Intelligence reaffirms the value of this role and reveals a strong correlation between long-tenured GMs and industry-leading performance.
“The data tells us the impact of retention ... is proven to drive the success of a restaurant,” Mary Hamill, senior vice president of customer success at Black Box Intelligence, said during a State of the Industry Workforce webinar in November. “What we know is there’s nobody more important than the general manager.”
And though workforce numbers are improving across the board, challenges persist. As of August, a large portion of non-management workers (44 percent for front of house and 43 percent for back of house) have only been at their current posts six months or less; two years prior, that employee pool accounted for a third.
At the same time, managers are leaving, too, and their departures only compound exits at the worker level.
"Understanding the systemic causes of turnover in our restaurants can really help us make changes," Hamill said. "We know there’s a correlation between management turnover and hourly turnover, and it really starts with being able to retain our GMs.”
Black Box Intelligence zeroed in on the reasons why general managers leave. Tied for the top spot are higher compensation at another company and poor work-life balance. And per the data, GMs have very concrete reasons for being dissatisfied with their wages.
"The No. 1 driver of performance in a restaurant is your GM," Hamill said. "However, when you look at the total comp year over year, they're actually making less."
In late 2021 and early 2022, bonuses increased dramatically compared to the prior year when bonuses were slashed. But total compensation began to slow, and by August, GMs were earning nearly 1 percent less than they had in 2021.
"If you take into account the conversation around general managers, their pay is declining, the expectation on pay increases is low, and the fact the cost to replace them is high, I'd argue we're headed in the wrong direction," Hamill said.
Brands that offer GMs bonuses between 16 and 35 percent of their base salary outpace competitors by 8.3 percent. For bonuses higher than 35 percent, it's a 16.5 percent gap.
"We need to make changes to incentivize and retain individuals who are the most important to the success of our restaurants," Hamill said.