Robin Gagnon is the co-founder of We sell restaurantsa franchise for business brokers focused on the sale of restaurants.
The labor crisis is widespread. Although it affects many industries, it is especially pronounced in restaurants. This shortage, especially in functions such as cooks, washing machines and wait staff, is taking a toll and seems to be going nowhere. This is despite the workforce in the restaurant industry expected to grow by an estimated 400,000 jobs by the end of this year.
In April, the stop rate in accommodation and food services was 9.1%, according to data released by the US Bureau of Labor Statistics. According to CNN, only five states report that they the same number of employees as before the pandemic, and a majority of restaurant operators expect the labor shortage to continue into 2023.
The effects of the staff shortage in restaurants
The ongoing mass exodus from the restaurant industry is creating a sticky situation for restaurant owners. As restaurants have fewer and fewer staff, they produce less, leading to lower profits. This creates a vicious circle of employees who are overworked with demanding schedules and very little incentive to stay.
In addition to labor, restaurant operators see other worrisome factors as to why people are leaving the industry: closure or restriction of hours due to the pandemic; adapting to security measures and business models; and not so much interest in these positions among the millennial generation. As a result, restaurant employers face a frustrating amount of turnover, hiring and training.
In a survey by the National Restaurant Association, 72% of operators rated hiring and retention as their biggest challenge. Many workers are moving to other industries that have seen growth since the pandemic, such as home delivery services, or have joined the entrepreneurship to start their own businesses.
6 ways restaurant operators can tackle the labor shortage
Restaurant owners consistently navigate the ever-changing conditions and challenges of the industry. To address the severely reduced workforce, these business leaders should consider the following strategies.
1. Get creative with recruiting
Be willing to promote jobs online, partner with restaurant staffing agencies, and advertise in your local community, such as at local schools and community centers. Take advantage of social media and find someone who knows how to showcase the restaurant’s strengths so that it stands out from the crowd. Consider offering an employee referral bonus as an incentive to encourage current employees to hire and reward more staff.
2. Invest in technology
With restaurant staff working long hours for uncompetitive wages, you need to ensure that what your staff does is imperative to their job description. Piling up non-essential tasks can fuel the cycle of feeling overworked and undervalued. Invest in technology to reduce more time-consuming administrative tasks, such as online reservation services or automated inventory systems. Freeing your staff from these menial tasks leads to more productivity and higher retention.
3. Additional benefits for employees
If your restaurant is able to offer competitive wages, that’s a good start. If not, consider offering professional training, development opportunities, and paid corporate events to boost morale and overtime. If you have the capacity to convert part-time employees to full-time and offer fringe benefits, that’s a huge step.
4. Offer flexibility in salary and scheduling
Find ways to better meet employees’ time and financial needs. For example, some restaurants are moving to apps that allow employees to record a single shift in an instant instead of being stuck two weeks in the future. Others embrace payroll systems that allow employees to work and get paid the next day. Any flexibility offered to employees greatly contributes to developing loyalty and covering necessary work hours.
5. Change your management style
A simple strategy for retaining talent is to consider your approach to managing staff. Open communication and transparency strengthen the relationship between owner and staff. For example, try to involve your employees in high-level decisions that affect their daily routine. This will help create a culture of trust and empower everyone involved.
6. Partner up
Contact your community for support. Build relationships with local organizations, high schools, college scholarships, and after-school programs to offer free training or skill-building workshops to people in exchange for a benefit. Becoming a pillar of the community lays the foundation for harmonious partnerships where the restaurant gets staff and the employees gain valuable skills as they enter the job market.
The challenges for restaurants will continue to evolve, but if owners are willing to be flexible and change with the tide to meet the challenges where they are, they can better deal with labor shortages. This will lead to a more resilient company. If there’s one thing we know, it’s that restaurants have proven their resilience.