Your sous chef hands in his notice on a Tuesday afternoon, politely, in the yard, while the dry store delivery is being signed for. He has four weeks to work. You say the right things. Then you go upstairs and start doing sums that will not appear anywhere in your management accounts for the rest of the year.
That is the problem with turnover in hospitality. The cost is real, it is large, and almost none of it is recorded as a cost of turnover. It is recorded as agency spend, as overtime, as a bad month on food GP, as a dip in your average score on Google. By the time you see it, it looks like four unrelated problems.
A resignation is a purchase order you did not sign
Start with what you can price. Recruitment is advertising, your own time reading applications, trial shifts paid at the going rate, and quite often an agency fee that runs into four figures for a senior kitchen role. Then induction: food safety training, allergen training, the walk through your Safer Food, Better Business pack, a right to work check carried out properly before the first shift rather than after it. Get that last one wrong and the Home Office civil penalty runs up to £60,000 per illegal worker, a figure raised from £20,000 in February 2024, so it is not a corner anyone should cut to get a body on the section.
Then price the gap. The National Living Wage was £12.21 an hour for workers aged 21 and over from April 2025 and rose again the following April, with the Low Pay Commission recommending the rate each year. Agency cover for a skilled kitchen position sits well above that once the agency's margin, employer National Insurance and the premium for short notice are in. Employer Class 1 National Insurance was 15% above a secondary threshold of £5,000 from April 2025, so every hour of overtime you pay to plug the hole carries that on top.
Finally, price the learning curve. A new commis is not slow for a shift. They are slow for weeks. Slow means longer ticket times, more waste, more remakes, and a head chef spending service watching one person instead of watching the pass.
- Advertising, agency fees and your own hours in the process
- Paid trials and the cover needed to run them
- Induction, food safety and allergen training before the first service
- Overtime and agency premium for the weeks in between
- Waste, remakes and slower tickets while the new person learns your menu
Two of those sit in wages. Two sit in food cost. One sits in revenue you never took. Nobody adds them up.
The rota is the thing that actually breaks
One departure is an inconvenience. Two in the same month is a structural problem, because the rota stops being a plan and becomes a negotiation. The people who stay start covering, and covering is where you quietly break the law.
The Working Time Regulations 1998 want eleven consecutive hours of rest between shifts, an uninterrupted twenty minute break on a shift longer than six hours, and either twenty four hours off in seven days or forty eight in fourteen. The forty eight hour average week can be opted out of in writing, individually and voluntarily, but the daily rest cannot. A double on Friday followed by an early Saturday prep shift is the most common breach in the trade and it almost always starts with somebody covering for a leaver.
The second thing that breaks is predictability. Hospitality staff will forgive a hard Saturday. What they will not forgive for long is finding out on Thursday what they are doing next week. A rota published a fortnight out, honoured as published, is cheaper than a retention bonus and considerably more convincing.
Tips stopped being a lever you control
The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024 and changed the arithmetic. Tips, gratuities and service charges must be passed on to workers in full, without deductions, and allocated fairly. If tips are paid on more than an occasional basis you need a written policy available to staff, and you have to keep records for three years that a worker can ask to see. There is a statutory Code of Practice on fairness and transparency, and a worker who thinks you have it wrong goes to an employment tribunal.
The practical consequence is that you can no longer use the service charge as a flexible subsidy for wages, card processing or the admin of running a tronc. If distribution runs through a genuinely independent tronc, payments are still subject to PAYE income tax but sit outside National Insurance for both you and the worker, which is why so many kitchens still use one. Whatever you choose, write it down, explain it on someone's first day, and make sure the front of house and the kitchen can both recite the split without resentment. Tip disputes are one of the better predictors that somebody is already applying elsewhere.
The good kitchens are the quiet ones
Every experienced chef can tell you within one service whether a kitchen is losing people. It is not the food. It is the volume. Shouting is a symptom of a section that is badly designed, a prep list that was never finished, or a head chef who is covering three jobs because two people left in March.
Retention responds to unglamorous things. A rota published early. Breaks actually taken. A written progression route from commis to chef de partie with the pay attached to it. Staff food that is food. A head chef whose own hours are survivable, because the fastest route to losing six people is losing the person who holds the section together.
Measure it, even crudely. Count leavers in the last twelve months against your average headcount. Split it by length of service, because people leaving inside ninety days is a hiring and induction problem, and people leaving at eighteen months is a progression and pay problem. The two need completely different money spent on them.
Where this shows up in the game
Restaurants are part of Business Baron's full game, and a café or a pub costs nothing to run. Staff take time to become useful, a badly defined role produces somebody who is busy without moving the business, and the person who leaves takes what they learned with them. The cost of turnover reaches the figures before it reaches a conversation.