The cafes and coffee shop industry in Australia includes shops that serve food and beverages to customers who will generally eat while seated. It does not include restaurants, takeaways, catering or fast food outlets. Cafe operations in Australia alone exceed $9 billion in revenue, with total profits exceeding $459 million. The geographic spread in this industry is closely correlated with the population spread, with over 80% of businesses located in the eastern states of New South Wales, Victoria and Queensland.
Cafes and coffee shops operate in a highly competitive environment, cafes are supported by Australia’s vibrant coffee culture and a strong demand for quality coffee. This coupled with the relatively low barriers to entry has attracted a rapidly expanding number of new entries creating fierce competition, forcing operators to maintain competitive pricing despite increased costs. The success of any business in this industry is largely determined by exceptional customer service and quality of experience.
“The Industry is highly fragmented, approximately 20,000 businesses pay out in excess of 2 billion in wages.”
Most cafes and coffee shops in Australia are small businesses hiring fewer than 20 staff. External environmental conditions have created an increasingly competitive staffing environment and driven the need to ensure staff provide an exceptional level of customer service.
Surprisingly, the industries methods for attracting the right people has remained largely unchanged over the years. A majority of small operators are still using outdated traditional recruitment channels and methods such as accepting walk-in applications. Staff turnover rates in the industry can often exceed 70%.
As an employer of approximately 139,000 staff Australia wide, the turnover cost to the cafes and coffee shop industry can exceed 1.4 billion
This is an industry in dire need of transformational change. The driving force to success in exceptional customer experience in this industry is great staff. Yet the industry continues to use old assessment methods proved invalid to source and acquire their key differentiator people. Customer loyalty demands a continuation of service, a staff member in this industry that remembers its customer’s names and favourite orders, has a magnetic personality and genuinely cares about their craft has a clear strategic advantage.
So why is turnover so high? What is happening here, and what can hiring managers and small business owners in the cafe industry do to avoid the enormous costs associated with staff turnover?
If you are a small business owner or hiring manager with limited resources and time, here are some great tips for finding and keeping great cafe staff. Developing an effective recruitment strategy supported by the right tools to ensure you never miss another exceptional candidate is critical, skipping this will cost your business in the form of poor customer experience, staff turnover and damage to your brand. In the cafe industry if you don’t hire the right people.
As a small business owner never assume your managers and team members have the same definition makes a great team. Collaborate with your team and define your business’s core values and what exceptional looks like. Involving your team in this process will establish trust, transparency and ownership of the process. More importantly, if you work collaboratively it is more likely that new hires will be warmly received and supported, recruitment should always be a team activity.
Never trust manual methods, to acquire your most expensive and valuable asset, people. This is a recipe for disaster from day one. Research shows that time poor small business owners miss exceptional candidates regularly. Throw out the email and paper resumes, track your candidate’s applications and improve your candidate experience:
- Use cloud-based recruitment software that empowers your recruitment process.
- The cost of not staying organised increases your time to hire places pressure on existing staff and decreases your profits
The Job ads you write should be well structured with no spelling mistakes (you expect this from your candidates). They should be compelling and clearly articulate to the candidate why they should want to work with you. They should inform the candidate of your unique style of service and tell a story, ask yourself if I was to read this job ad, would I apply?
See Tips on How to Write a Job Ad That Attracts Candidates for helpful information
Missing a great candidate can be as big a loss to the business as hiring poorly, so make sure you are including your team in the recruitment process. You are building a team, collaboration in the recruitment process is an essential ingredient to successful hires in any industry, in the cafe industry this is key to success. Including at least either the cafe owner or cafe manager, and a cafe team member will help to ensure the onboarding process is smoother. Once you make the hiring decision your new cafe team member is more likely to be warmly welcomed and will have several points of contact from day one. Smooth onboarding and team integration are one of the primary ways to ensure you retain your cafe staff.
When you employ a new team member you make a psychological contract with them, they will expect the promises that you make are kept. Including team members in your recruitment process will help your candidate validate your promises are accurate and not just lip service.
Have you ever asked different people how the same music concert was and received totally different replies? Interviewing candidates for your cafe will be no different. If you want to recruit the best people there are really only three big questions that need to be answered:
- Can the candidate do the job effectively? (experience and aptitude)
- Does the candidate want to do the job (desire, attitude)
- Will the candidate fit well within the team? (values, persona)
Structured interviews need planning, the goal of the recruitment process is to hire staff that make your cafe team better. Interview questions should focus on eliciting only the answers to the three magic questions. When you keep these three questions in mind it will help you shape a structured interview with objective and fair measurements throughout your recruitment process.
Create a grading rubric ask yourself what answers are indicative of a person who will be successful in the role.
To minimise bias every candidate should be asked the same questions, capture exact responses and compare it to your grading rubric. When interviewing, take the time to ask follow-up questions to garner additional information that may help the candidate to succeed.
All answers should be graded on a scale from don’t hire to hire example:
- No, Maybe, Yes (1 – 2 or 3 points)
The candidate that is the best fit for the three magic questions is your top candidate for the role if you keep your promises it is probable that this candidate will stay longer.
Always remember skills and knowledge can always be taught, a person’s attitude is hard to alter. Hiring a candidate with an attitude that does not align with your cafes service standards will damage your reputation and destroy your customer experience. Never be fooled by an impressive resume if the candidate has a different attitude or values to those you wish to foster in your team don’t hire them it is always a costly mistake.
When visiting a cafe do you want to be met with a smile and warm open body language? I know I do! Look for non-verbal cues in the interview process that tell you more about the candidate’s attitude such as:
- Sitting comfortably and upright (posture can say a lot about confidence)
- Slightly forward posture (implies engagement)
- Does your candidate maintain eye contact (implies engagement)
- Watch for facial expressions (do they match the words spoken)
- Effective gestures (are gestures natural and genuine)
- Dressing the part (make sure casual is just that and not sloppy)
- Voice tone (it’s not what you said it’s how you said it)
There are complete books written on non-verbal cues when interviewing cafe staff listen with your eyes as well as your ears.
There is extensive research out there to support employers gut feelings get it wrong up to 80% of the time. Use pre-employment testing. The most popular categories of pre-employment testing include;
- Job knowledge tests
- Integrity tests
- Cognitive ability tests
- Personality tests
- Emotional intelligence tests
- Skills assessment tests
- Physical ability tests
- Background check tests
- Drug tests
Statistically, more than 50% of resumes contain inaccuracies. Research shows cafe owners and hiring managers that use transparent pre-employment screening methods as a part of their recruitment process realise a number of important benefits they include;
- When a candidate knows they will be tested they are less likely to stretch the truth
- Accurately identifies candidates that will have longer tenure
- Reduced time to hire
- Reduced number of poor quality hires
- Reduced turnover
At the end of the day, hiring the best quality cafe staff requires diligence, the more you know about a candidate, the better your hiring decisions will be. Keeping your best staff requires as much diligence as hiring them in the first place. Here are a few rules of thumb for keeping great cafe staff;
- Keep your promises (no trust = no employee)
- Maintain good relationships with your team (happy staff love their boss and stay)
- Recognise and reward good performance
- Resolve conflict quickly and fairly
- Give your staff a challenging environment (bored staff leave)
- Foster team relationships (employees go the extra mile for people they like)
- Give your staff the opportunity to use and develop their skills
- Empower autonomy and independence (don’t micro-manage)
- Provide meaningful work
- Provide knowledge of your financial stability (worried staff leave)
- Never ever compromise your culture (bad hires are a form of culture poison)
Anthony Goodwin is a founder, entrepreneur, consultant, data scientist and coach with 25+ years of experience in business management, recruitment, and human resources. He holds a bachelor of business management – human resource management and postgraduate qualifications in data science.