Effective Discounting Strategies for Restaurant Employee Retention

By: Anthony Giampa


Employee benefits are an essential aspect of any business, and the restaurant industry is no exception. In a highly competitive environment, where turnover rates can be substantial and staff retention is crucial, offering attractive employee benefits can make a significant difference. According to the National Restaurant Association, one third of operators believe that recruiting and retaining employees will be the most significant challenge to meet in 2024. One such benefit that can boost employee morale, retention, and brand loyalty is employee discounts.  

Restaurant managers and marketers should have a comprehensive understanding of the benefits of employee discounts. They also need to know how to leverage them in the Punchh Platform in order to provide a strategic program that fosters a positive workplace culture, which in turn, enhances customer service and ultimately drives business success.  

The Importance of Employee Discounts in the Restaurant Industry  

Offering attractive employee benefits helps your business retain staff and reduces the costs associated with hiring and training new employees. Moreover, employee discounts contribute to creating a positive workplace culture and strengthening brand loyalty among team members. By demonstrating that you value your workforce and care about their well-being, you foster a sense of belonging and motivation among your employees. Providing additional perks and incentives helps restaurant brands show their team members that they are valued and appreciated. This can lead to increased job satisfaction and a sense of loyalty among restaurant workers. 

Creating a Rewarding Workplace Culture

When employees feel valued and supported, they are more likely to remain committed to their roles and contribute to the success of the restaurant. Here are some ways employee discounts play a significant role in fostering a positive work environment and contribute to a rewarding workplace culture:  

  • Demonstrate that the restaurant values and appreciates its employees, leading to increased job satisfaction and motivation.  
  • Create a sense of belonging and loyalty among employees, reducing turnover rates and retaining top talent.  
  • Contribute to employee well-being by providing more affordable options, easing additional expenses.  
  • Foster a collaborative and supportive team environment, promoting teamwork and camaraderie among staff members.  
  • Enhance employee morale and engagement, leading to improved customer service and customer satisfaction.  

By integrating employee discounts into the workplace culture, restaurants can create a positive and rewarding environment that attracts and retains talented individuals.  

Strengthen Brand Loyalty Among Staff

Employee discounts are a powerful tool for strengthening brand loyalty among restaurant staff. When employees feel appreciated and rewarded for their hard work, they are more likely to develop an attachment to the brand. This loyalty translates into increased commitment, motivation, and overall job satisfaction.  

By providing exclusive discounts and perks to their team members, brands can foster a sense of pride and ownership among their staff. This not only boosts employee morale, but it also encourages them to become ambassadors for the restaurant. By investing in employee loyalty, restaurant brands create a strong and dedicated workforce that contributes to the success and growth of the business.  

Integrating Employee Discounts with Loyalty Programs  

Integrating employee discounts with loyalty programs is a strategic way to enhance employee engagement and customer loyalty. By combining these two initiatives, restaurants create a comprehensive rewards system that benefits both their employees and customers.  

Program Design Considerations 

When creating your employee discount program, there are some things to consider before launching. These could include:  

  • What products or discounts will you offer?  
  • Will employees be required to join the loyalty program? 
  • Will all employees receive the same discounts? 
  • How will discounts be managed when an employee leaves the business? 
  • Will there be any additional requirements for employees to utilize the discount? 

There are various types of employee discounts that restaurants can offer to their staff. These discounts can range from free meals during shifts to special discounts outside of working hours. By providing these benefits, restaurants can incentivize their employees and create a positive work environment. 

Direct Meal & Perks Discounts for Employees 

One common type of employee discount in restaurants is direct meal discounts for employees. This can include free meals during shifts or discounts on meals when dining outside of working hours. Here are some benefits of this type of discount:  

  • Provides a practical perk for employees, ensuring they have access to a meal while working.  
  • Helps employees become more familiar with the menu, enabling them to make recommendations to customers.  
  • Creates a sense of appreciation and value, making employees feel cared for by the restaurant.  
  • Fosters a positive work environment and team bonding as employees can enjoy meals together.  
  • Serves as a way to attract and retain talent, especially in a competitive labor market.  

By offering direct meal discounts, restaurants provide tangible benefits to their staff while enhancing their overall dining experience.  

Seasonal and Event-Based Discounts for Staff  

Offering seasonal and event-based discounts exclusively for staff is a creative way to reward employees and boost staff retention. For example, during slower seasons, restaurants can provide discounted meals or special offers to staff. Additionally, on special occasions or holidays, restaurants can offer exclusive discounts or perks to show appreciation for their employees’ hard work and dedication. These types of discounts create excitement and motivate staff to remain loyal to the restaurant, such as offering a gift card as a reward for employee loyalty on their work anniversary.  

How To Manage Employee Discounts using the Punchh Platform

The Punchh Platform offers brands a few different ways that employee discounts can be managed including Campaigns, Coupons, and a Stored Value integration.  

The key benefit of managing employee discounts using the Punchh Platform is added control and visibility around the usage of the discounts you provide, as you can require that these discounts are only associated with your employees’ loyalty program account. 

Via the Campaigns module, brands have the ability to distribute employee discounts on a recurring basis, either daily, weekly, or monthly. Any type of discount available to configure in the Punchh Platform can also be used for employee discounts. Just keep in mind that some discounts will resonate more with your employees than others. You can create anything from free menu items, bundles, reduced pricing on menu items, flat dollar amount discounts, percentage discounts, and more. For loyalty programs that utilize banked currency as a loyalty reward, gifting currency is also a great option. 

The next way that employee discounts can be managed is through Coupons. Punchh Coupons can be used to unlock one-time or recurring discounts. Coupons can be set up to only be used with a loyalty account in your mobile app to help ensure only the intended recipient (your employee) is able to take advantage of the benefit. 

Measuring the Impact of Employee Discounts  

Tracking Employee Satisfaction and Turnover Rates

Employee satisfaction and turnover rates are important indicators of the effectiveness of employee discount programs. By regularly surveying employees and tracking staff turnover rates, restaurants can assess the impact of their discount programs on employee satisfaction and retention. Positive outcomes, such as higher satisfaction levels and lower turnover rates, indicate that the employee discount program is contributing to a positive work environment and employee well-being.  

Analyzing Customer Feedback and Employee Performance 

Analyzing customer feedback and employee performance can provide valuable insights into the impact of employee discount programs. By monitoring customer satisfaction ratings, reviews, and feedback, restaurants can assess the correlation between employee discounts and customer perception of service quality. Additionally, evaluating employee performance metrics, such as upselling or customer retention rates, can help identify any positive impact on employee motivation and job performance.  

Best Practices for Communicating Discount Policies  

Clear and effective communication of discount policies is essential to ensure employees understand the benefits available to them and how to access them. Here are some best practices for communicating discount policies:  

Clear Guidelines for Use and Eligibility

To avoid confusion and ensure fairness, discount policies should include clear guidelines for use and eligibility. This includes specifying who is eligible for discounts, any limitations or restrictions, and the process for redeeming discounts. By providing clear guidelines, restaurants can avoid misunderstandings and ensure all employees have equal access to the benefits.  

Training Staff on the Benefits of Discount Programs  

Training staff on the benefits of discount programs is crucial for ensuring employees understand and appreciate the value of the discounts available to them. By providing training sessions or resources that outline the benefits and advantages of the discount program, restaurants can enhance employee engagement and encourage participation in the program. Moreover, training can also serve as an opportunity for professional development, as employees can learn about customer service skills, upselling techniques, and other relevant topics related to the app. LinkedIn Learning, a popular online platform for professional training, offers a variety of courses on business and service skills that can benefit restaurant employees.  

Employee discounts in the restaurant industry play a crucial role in boosting morale, retention, and brand loyalty. Implementing a well-structured and strategic discount program is important for fostering a positive work environment, especially during a peak season such as summer. By tracking your impact through employee turnover rates and customer feedback, restaurant brands can measure success and further engage their employees. By leveraging the employee discounting capabilities with Punchh, you can ensure that your employees feel valued and appreciated on a consistent basis.   

Ready to transform the way you reward your employees? Request a personalized demo for your brand and see how Punchh can get you started on delivering exceptional benefits to your team.  

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