Staff headaches remain, but things are looking up.
By Daniel McCoy
Today, restaurants face many hurdles to do what they do best: provide a great meal to a hungry client. There have been supply chain issues in the food distribution line, inflation has put a squeeze on profit margins, rent has gone up and foodservice delivery prices eat into the bottom line, but one of the largest hurdles has been finding employees willing to work.
According to the latest employment report from the U.S. Bureau of Labor Statistics, U.S. employers added 339,000 new jobs in May – 33,000 of them in foodservice and drinking places. The unemployment rate increased to a very low 3.7%, but employment in the leisure and hospitality industry still remains below its February 2020 level by 349,000, or 2.1%.
The staffing shortage is having a major impact on the foodservice industry. Restaurants are struggling to keep up with demand, and many are having to reduce their hours or even close their doors altogether. The shortage is also leading to higher prices for consumers.
According to the National Restaurant Association, the industry is expecting to grow by 500,000 jobs by the end of 2023, bringing total industry employment to 15.5 million, which will surpass pre-pandemic totals. The bigger issue is where to find people to fill these positions.
There are many factors contributing to the staffing shortage. One is the Great Resignation, which has seen millions of workers leave their jobs in search of better opportunities. Many employees chose to leave the service industry altogether for the opportunity of working remotely.
High turnover has always been an issue in the restaurant industry, as the staffing jobs lend themselves to employees looking for short-term commitment, such as students or those seeking permanent employment elsewhere, and those looking for flexibility until their work-life balance is improved.
Another factor is inflation and the rising cost of living, making it difficult for many people to afford to work in the foodservice industry. According to the latest labor statistics, positions like cooks and prep workers are averaging around just $14 an hour.
The tightening immigration policies have had a profound impact on the labor pool in the foodservice industry. Restaurants have long depended on the unskilled labor pool that immigration afforded them. Now many feel threatened that they will be deported and are not entering the employment pool.
In addition to the factors mentioned above, the staffing shortage in the foodservice industry is also being exacerbated by the following:
- The aging workforce. The average age of a restaurant worker is 38, and the industry is facing a growing shortage of younger workers.
- The high turnover rate. The turnover rate in the foodservice industry is more than 70%. This means that restaurants are constantly having to hire new workers, which can be a costly and time-consuming process.
- Changes in norms and scheduling. Many parents do not want their teens working later hours, especially during school. School years are getting longer in many areas. Some now are year-round with what used to be summer vacation being spread out through the year.
- A return to normal. Restaurants are coming back from the pandemic, creating the need for even more workers.
On the good news side, younger workers are returning to jobs after being kept home during the pandemic. As COVID relief funds began to disappear, such as the child tax credits, the solution is to find employment. And with the summer officially here for some students, the available workforce should continue to grow.
How Can You Find, Retain Employees?
There are several things that can be done to address this staffing shortage in the foodservice industry, such as offering higher wages and better benefits. Many are also making their workplaces more attractive to employees by offering flexible schedules and a positive work environment. By taking steps to attract and retain workers, restaurants can help ensure they have the staff they need to meet the needs of their customers.
Check with local colleges and even high schools. Most colleges have some type of job board that will connect employers with students looking for work.
Personal referrals are still the best. Some of my clients offer a referral bonus to their existing employees. If an employee recommends a potential new employee and that person stays for 90 days, the referring employee gets a bonus of $150. One client upped the amount to $500 if the new employee stayed 6 months.
There are many job websites that will assist in finding employees. The big ones are Indeed and Zip Recruiter, but they also have thousands of listings, so the exposure is less and competition is greater. For basic unskilled labor, SnagAJob is a good website to list on. Others include Jobs2Careers and GlassDoor for those looking for management hires.
Another great resource is the Department of Labor. Unemployed individuals must actively seek at least 3 jobs per week. The Georgia Department of Labor offers a site for employers to list open positions (employgeorgia.com) and allows the employer to view automatic matches to their job postings as well as search resumés. The employer even has the ability to invite potential candidates to apply for the position.
Apps and websites can help you fill positions, but the sign in the window still works. It attracts individuals that live near your location (close enough that they saw your sign) and often those individuals that dine with you. While the rest of us might grow tired of seeing “Help Wanted” and “We Are Hiring” in our face everywhere, it is still effective.
Finally, automation is beginning to make its way into the foodservice industry. While the personal touch will always be needed, there is room for automated systems to lessen the workload.
At many fast-food restaurants these days, you can order through an app on your phone then retrieve your order from the counter. At other fast-casual and sit-down restaurants, robots now deliver food to the table, or prepare hamburgers and drop fries. Necessity is truly the mother of invention.
Now matter how many new hires you’re looking for or where you find them, the key is to find the right person to begin with, treat them the best you can, give them the autonomy that desire and grow them with your business. Sounds easy right? Try it and see.
Daniel McCoy joined the UGA-Small Business Development Center at Kennesaw State University as a business consultant in 2017 after a successful banking career and 10+ years in the retail industry. A Certified Professional for the Society for Human Resource Management (SHRM), he has won the Flewellen Award for Consulting Excellence for four consecutive years. Daniel was also awarded Business Consultant of the Year 2022 and will represent the state of Georgia at the America’s Small Business Development Conference this September. Over the last five years, he has assisted in 140 business starts, raised $75 million in capital and logged over 4,000 consulting hours with more than 500 clients.