It seems now more than ever restaurant staffing is an issue. Historically, labor has been in short supply at restaurants, with many understaffed long before COVID-19.
However, the pandemic highlighted problems in the industry. Explore what’s behind the labor shortage and how to solve these pressing issues.
Then and Now: What’s Behind the Restaurant Staffing Shortage?
Labor shortages aren’t new to the restaurant industry. Tight labor markets existed as recently as 2018 and 2019 when 6.5% and 5.4% of all jobs in restaurants and hotels were unfilled, according to Restaurant Business, citing federal data.
We saw some of the lowest unemployment rates for restaurant workers during these years, figures that were on a decline since peaking in 2011, according to the Bureau of Labor Statistics (BLS). We also witnessed sharp increases in productivity and a steady rise in restaurant wages.
At the same time, the Brookings Institution finds teenage employment dropped sharply as more adolescents opted out of work during high school.
According to QSR, “At the beginning of 2020, “only 10% of full-service restaurant companies reported their kitchens to be fully staffed.”
However, BLS data shows the unemployment rate for restaurant workers rose sharply in 2020, hitting a high of 35.4% in April 2020 compared with 4.4% in 2019.
Post-Pandemic Restaurant Staffing Problems
Now, with restaurants anxious to get back to business, staff can’t be found.
It’s easy to blame the extended unemployment benefits. Indeed, having a safety net can encourage some former restaurant staff to hold out for other job options.
Of course, this problem is compounded because state governments lack resources to enforce existing unemployment rules, such as requiring unemployed people to perform job searches.
But unemployment benefits are one piece of the puzzle, not the whole picture.
In 2020, millions of restaurant workers, who typically live paycheck to paycheck, or shift to shift, were suddenly without a job.
Since then, plenty of hospitality employees have left the industry. Choosing, instead, to move toward stable employment offering full-time hours and benefits. These jobs were plentiful as other industries returned to business quicker than those in the food and beverage sector.
Others, who worked at a restaurant as a second or third job, decided to take up gig work, such as Uber driving. Older adults retired altogether rather than put their health at risk.
Lastly, NPR reports that caps on HB-2 visas followed by a backlog of applications left restaurant owners without a key labor market.
Why Aren’t People Flocking to Restaurant Jobs?
As vaccination rates rise and states enforce unemployment regulations, restaurateurs will fill more positions. But the employee shortage isn’t new, nor is it going away.
Aside from health reasons, vaccinations and pandemic relief payments, ongoing restaurant staffing problems stem from:
- Low wages: The median cook wage was $13.10 in 2020, whereas waiters and waitresses earned $11.42 an hour, according to BLS data.
- Fewer full-time roles: BLS data shows the average hours worked by food service workers is about 23 to 24 hours a week, making a second job mandatory for many people.
- Unpredictable income: Hours get cut during slow seasons, and tips vary widely depending on the season, weather or even when a new restaurant opens up in town.
- Workplace conditions: Restaurant work is stressful, the industry has a history of concerns about harassment. Also, poor restaurant management can tank morale.
- Little to no benefits: For servers, a sick day or vacation day is simply a day without pay, and few small restaurants offer benefits, especially to employees offered less than 30 hours weekly.
- Lack of career growth: Smaller businesses have fewer career options, meaning employees are limited to doing the same position for years.
- Low trust in employers: Workers are wary of returning to an industry that burned them in 2020 or prioritized owner profits over safety.
Restaurant Staffing Challenges and How to Overcome Them
Whether you have a full-service restaurant or coffee shop, the problem and solution revolve around human capital.
The top restaurant staffing challenges include:
- Few, if any, responses to help wanted ads
- People don’t show up to interviews
- New employees leave soon after hiring
- The costs of staffing are increasing
- It’s harder to attract younger adults and teens
To build a sustainable business model, restaurateurs can implement several of the following ideas into their workplace:
Rethink Your Approach to Help Wanted Ads
Although help wanted ads and getting assistance from a restaurant staffing agency can help attract candidates, the long game requires a more comprehensive approach.
With clear employee recruitment strategies, restaurateurs can:
- Add a career page to your website where you highlight current employees, your culture and benefits.
- Simplify the initial application process by shortening your app, making it mobile-friendly and giving people multiple ways to apply.
- Join local hiring events by putting together an immersive booth where job searchers can interact via phone using a quick response (QR) code and on-the-spot interviews.
- Create “We Are Hiring” cards to place in delivery or carry-out orders and encourage managers to hand them out to on-premise guests.
- Instead of listing job requirements right off the bat in your job ad, highlight what makes your restaurant different from others immediately.
- Use social media marketing to get the message out, including established platforms such as Facebook and favorites of younger generations such as TikTok.
Encourage Employee Referrals
An employee referral program is an excellent way to attract new team members. But referral programs don’t always gain traction in small businesses. The key is to give your crew the tools to recruit.
Start by designing a designated landing page for referrals and connect a QR code to it. Next, create mini templates for text and social media messages that your staff can use. Lastly, give each employee a custom link using urchin tracking module (UTM) codes to make tracking easy.
Offer On-Demand Pay Options
As many restaurant workers live below the poverty line, giving them access to their pay sooner can be a major benefit.
Westgate Resorts uses the platform DailyPay and realized several benefits upon implementation, such as:
- “Two-thirds of new hires sign up for DailyPay“
- Tenure increased by 115%
- Workers check balances about 7 times a week
Evaluate Management, Morale and Culture
Many restaurants have worked hard to overcome the negative perception of the restaurant industry. But poor management can lead to higher employee turnover rates. Indeed, managers are often overworked and underpaid in the sector, leading to unengaged supervisors who feel resentful.
Assess your managers and actively take steps to improve their workplace experience. If you already have great managers, then look at your overall morale and culture.
How can you show job candidates that you value them? That your restaurant won’t shut down and leave them high and dry in a few months or during a slow season, or worse if another outbreak occurs.
While it’s difficult to make promises about uncertain futures, restaurant owners can aim for transparency and clear communication.
Create Messages Targeted to Specific Demographics
A diverse staff is beneficial to all small businesses. With this in mind, create targeted hiring messages to attract a mix of job candidates.
For instance, consider:
- Getting involved with high school work programs
- Offering high schoolers help with resume development
- Working with colleges to create an internship program
- Highlighting the benefits of short shifts for stay-at-home parents of school-age kids
- Providing a relocation bonus to capture people moving to your area
- Showing retirees how a position helps them stay involved with the community
Take a Hard Look at Benefits and Wages
With slim profit margins, talking about benefits and wages is a touchy subject for restaurant owners.
Regardless of where you stand on the minimum wage issue, the fact is that if you want people to accept a position at your restaurant and stay with your company, they need enough money to live close to where your business is located.
Head over to the Massachusetts Institute of Technology living wage calculator, where you can select your state and county to see living wages versus poverty wages for your area.
If you can’t provide full-time hours, offer flexible schedules so restaurant workers can take on a second or third job. Additionally, it should be easy to see schedules, request time off and swap shifts. Today, a digital scheduling program like HotSchedules is essential.
Yes, you may need to increase meal prices or add a service charge to cover wage increases. But, if you can’t raise your rates, look for other ways to add value, such as:
- Offering paid sick leave or other fringe benefits
- Providing employee discounts on meals
- Giving a free weekly “family” meal for workers to take home
- Assisting staff with finding health care or applying for benefits
Beef Up Your Onboarding and Training Processes
Too little training and your employees can’t do their job well. But lengthy onboarding eats up funds and time.
Look at your current process and find ways to streamline your approach. Perhaps, new hires could fill out employment documents online or download the scheduling app before their first day.
Shadowing staff is one of the best ways to learn on the job. However, your onboarding and training documents should be viewable on a mobile device and interactive, with fun quizzes or polls.
Plus, don’t forget about compensating your in-house trainers and mentoring them on the best ways to train a new employee.
Consider Updating Your Business Model
If you tried everything above and can’t find people, think about changing your business model. Restaurants are doing several things to cope with reduced staff, such as:
- Creating smaller, simpler menus
- Introducing pay-at-the-table technologies
- Using kiosks or apps for ordering
- Switching to disposable tableware
Alleviate Your Staffing Woes
Although many experts expect the hiring crunch to ease up by mid-summer or fall, these suggestions can help overcome short-term barriers, restaurant owners still need to address the greater issues for a sustainable future.