“Show me the money!”

It’s the battle cry of job seekers and the common hiring strategy for urgent restaurant and hospitality openings. When demand for top-performing managers spikes, job boards fill with high salaries and bonuses galore.

But here’s the real question: Are employers throwing cash at a talent problem, or does competitive pay genuinely drive performance and retention?

While the answer is nuanced, this is the gist:

• Higher salaries attract, motivate, and prevent burnout.
• Pay dissatisfaction is only a piece of what’s driving turnover and disengagement.
• Great performance requires ongoing workforce investments.

Let’s dive deeper into the true impact of a competitive salary in the hospitality industry.

A Competitive Salary Is Powerful

Let’s get real: Money talks.

When you’ve got an attractive pay range on your job listing, your talent pool expands. Offering a competitive salary shows experienced hospitality managers that you value their skills. Plus, it proves you’re serious about building a top-notch team, not just filling critical gaps. For frontline managers, who are feeling the pinch of declining tips, a high base salary carries even greater weight.

The power of competitive compensation extends beyond the recruitment phase. Once you’ve got top talent on board, above-market salaries can also:

• Boost morale: 87% of employees who feel appreciated are also more motivated at work.
• Prevent burnout: High pay reduces workplace stress and financial strain, keeping employees engaged and focused on their role.
• Inspire referrals: Well-paid employees may become brand ambassadors who attract other high performers.

Consider the alternative: Our 2024 Salary Survey revealed 48% of restaurant and hospitality managers who made a career transition did so for a better income opportunity.

Poor compensation is an easy way to lose a great leader—but is a competitive salary enough to inspire loyalty?

Curbing Turnover Requires Cultural Change

Truth be told, pay dissatisfaction is only a piece of what’s driving turnover and disengagement. While there are no winners in a low-salary organization, competitive compensation isn’t a cure-all. According to Gallup, 70% of preventable turnover is driven by management, organization, career advancement, staffing, and workload concerns.

A high salary alone can attract job hoppers who are always looking for greener pastures. However, when that salary is part of a broader retention strategy, it becomes incredibly valuable.

Reap the attrition-cutting benefits of high compensation by making cultural improvements such as:

• Building flexible scheduling policies that respect work-life balance without sacrificing service quality.
• Implementing regular feedback sessions that catch frustrations before they lead to resignations.
• Fostering a culture of recognition where exceptional performance gets noticed and rewarded beyond base pay.
• Developing cross-training opportunities that allow for professional development and build valuable backup coverage.

Great Retention Strategies Aren’t One and Done

Let’s say your compensation and retention strategies are going great. Then, after a year, your productivity metrics start sinking once again. Your high-performing team seems less engaged, and whispers of competitor offers are circulating. What gives?

Here’s the reality of hospitality workforce investments: They require constant evaluation and adjustment. That competitive salary you offered last year? It might already be falling behind market rates.

Periodic compensation reviews are key to keeping pay satisfaction high. And if you want top performers to stay top performing, you need development programs that continually sharpen their skills as the hospitality industry evolves. Mentorship programs, career pathing, and continuous learning opportunities are all needed to support the positive impact of competitive salaries.

Developing a Strategic Edge Beyond Compensation

When wrestling with compensation strategy and top talent acquisition, many leaders overlook their most powerful ally: specialized recruitment firms.

Experienced restaurant and hospitality management recruiters give you a competitive edge by unlocking access to thousands of qualified professionals nationwide. Beyond expanding your talent pool, Gecko Hospitality takes the time to build a custom, strategic search plan—ensuring every placement drives performance. Our market intelligence further helps you optimize your salaries and maximize your hiring ROI.

Optimize your hospitality management recruitment strategy. Connect with Gecko Hospitality today.

Contact Gecko Hospitality