Staffing
Replacing a single frontline hourly employee averages $5,684, once you factor in recruiting, onboarding, training and lost productivity.
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November 18, 2025 by Tal Clark — CEO, Instant Financial
In recent months, I’ve spoken with dozens of restaurant operators, franchise CFOs and HR leaders about what’s keeping them up at night. The conversation always comes back to the same two items: food and labor.
Ingredient prices fluctuate beyond anyone’s control, so attention inevitably shifts to labor costs, particularly turnover, which has quietly become one of the industry’s largest hidden expenses.
Replacing a single frontline hourly employee averages $5,684, once you factor in recruiting, onboarding, training and lost productivity, according to the Center for Hospitality Research at Cornell, In an industry where margins are often just a few percentage points, losing even a handful of workers each month can erase profits.
At the same time, most restaurant employees are young — many in their teens or early twenties — and for nearly one-third, it’s their very first job. That reality makes retention an even steeper challenge. Younger workers often see restaurant roles as temporary, and if they feel unsupported or financially stressed, they have little hesitation about walking next door to a competitor offering a few cents more per hour or a faster way to access their pay.
A new definition of “benefits”
For decades, restaurants competed on wages and scheduling flexibility. Those levers still matter, but today’s workforce expects more holistic support, especially in a post-pandemic economy where inflation continues to outpace wage growth. According to Instant Financial’s research, 86% of hourly workers say they would stay longer in a job that lets them access their earned wages instantly.
Earned Wage Access has rapidly moved from a “nice-to-have” perk to a valuable retention tool. The same is true of instant tip payouts. Imagine being a waitress and receiving your hard-earned tips immediately after your shift instead of having to wait until payroll is processed. These offerings form a new kind of safety net that meets employees where they are, financially and personally.
As Matt Umholtz, President of AllianceHCM, told me recently: “Turnover is one of the biggest controllable costs operators have, and the best-run restaurants are realizing that investing in their people actually saves them money. When employees feel supported, they’re not job-hopping, they’re showing up.”
That sentiment comes up in nearly every conversation I’ve had with operators recently. When a server can walk out of a Friday-night shift with digital access to their tips instead of waiting for a cash count or a paper check, that immediacy builds trust. When a line cook can cover a surprise car repair without resorting to a payday loan, that peace of mind translates into reliability. The business outcomes are measurable: lower absenteeism, higher engagement, and a better guest experience that drives repeat visits.
What I’m hearing from operators
Restaurant finance leaders tell me they’re under immense pressure to maintain profitability amid rising labor and food costs. Yet many are realizing that investing in the workforce is one of the most controllable levers they have.
We’ve seen brands save on operating costs by implementing financial benefits to employees. For example, one of our multi-unit restaurant customers was able to save considerably on bank fees related to frequent cash deposits and withdrawals for tip payouts. By moving their cash payments to digital tips, not only were restaurant managers and employees safer, due to less cash handling, the company was able to have more transparency and consistency with nightly tip payments while reducing operating costs.
As Kevin O’Bold, VP of Finance for Ultra Steak, Inc., put it: “We can’t control commodity prices or delivery fees, but we can control how we treat our people. When we invest in tools that reduce financial stress, it pays us back in retention and better guest service.”
The math is simple: happier employees stay longer, call out less, and create better customer experiences. Every restaurateur understands the downstream impact of a disengaged team: slower service, inconsistent food quality, and, ultimately, lost sales.
Building financial wellness
Still, pay access alone isn’t the finish line. The next evolution is financial wellness — helping employees learn how to manage the earnings they can now access in real time. Short, mobile-friendly modules on saving and credit building can make an enormous difference, especially for younger workers building new habits..
Equally important is offering a path for career development. Many restaurants already have strong training cultures but struggle to communicate upward mobility. Highlighting internal success stories, showing how a dishwasher became a shift lead, or a cashier moved into marketing, helps reframe the job from “temporary” to “transformational.”
Kep Sweeney, CEO of PDQ Restaurants, said: “We call it People Dedicated to Quality for a reason. When you invest in people, not just paychecks, that investment comes back tenfold in loyalty, energy, and culture. Our job as leaders is to make sure everyone sees a path forward.”
Combining these efforts creates a positive cycle: employees feel valued, which leads to better performance, which in turn improves business results.
The future of work in restaurants
The labor crisis of the last few years forced the industry to innovate faster than it ever imagined. What started as emergency measures — contactless ordering, mobile pay, flexible schedules — has become standard operating procedure. The same trajectory is now unfolding with real-time pay and financial wellness tools.
As technology continues to lower barriers, every restaurant, from single-location cafés to national brands, has the opportunity to build stronger financial foundations for their teams. Doing so isn’t just good ethics, it’s good economics.
If the past few years have taught us anything, it’s that the people who make, serve, and deliver our food are the heartbeat of the hospitality business. Taking care of them through smarter pay access, meaningful benefits, and clear career paths isn’t optional. It’s a recipe for long-term success.
About Tal Clark
Tal Clark is the CEO of Instant Financial, the fintech company modernizing payments and earned wage access for employees. With over 30 years of experience in financial services, payments, and payroll innovation, Tal has led transformative initiatives at companies like First Data (now Fiserv) and was part of the founding team of Money Network, the first platform to introduce electronic pay solutions for all employees. As a former U.S. Marine Corps Captain and helicopter pilot, Tal holds an MBA from the University of San Francisco and a BS from Mississippi State University.
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