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How Apprenticeships Benefit Small Restaurants

Known as the Hospitality-Sector Registered Apprenticeship (HSRA), the program was developed in partnership with American Hotel and Lodging Foundation (AHLA Foundation) and the Multicultural Food and Hospitality Association (MFHA) to ensure apprentices learn a diverse set of skills that future employers may require.

HSRA was formed in 2016, but the Department of Labor didn’t certify its standards or approve the program until the next year. It currently enrolls over 2,500 apprentices in 48 states and 870 apprenticeship sites across the country, according to NAREF’s website.

“Apprenticeship provides both new and current restaurant and foodservice employees the opportunity to advance their careers and increase their income and ensures restaurant companies maintain a competitive advantage in today’s challenging economy,” Rob Gifford, president of the NRAEF said in a statement.

Apprentices go through an earn-while-you-learn program while in HSRA. They are required to meet certain on-the-job training and classroom hours to qualify for certification. Graduates of the program currently work in restaurants such as Chili’s Bar & Grill, Maggiano’s Little Italy, and Shakey’s Pizza Parlor.

While HSRA provides plenty of opportunities for restaurant employees, some business owners are hesitant to welcome them. Common concerns include that the cost to employ an apprentice is too high and that employee productivity is too low.

But, these concerns are unfounded. A study by Case Western Reserve University and the US Department of Commerce in 2016 revealed that apprenticeships often improve productivity, reduce turnover, and improve employee engagement.

These are just a few of the HSRA benefits for small restaurants. This article will discuss a few more.

Customized Training in the Latest Skills and Technology

HSRA allows restaurant owners to customize each apprentice’s apprenticeship by giving employers discretion to determine when the apprentice has mastered a particular skill. HSRA will also help employers improve their training programs if they do not meet DOL’s standards.

For employees, this means the program will always include training in the latest skills and technology. Several studies have shown restaurants are relying more on technology to complete services, which means employees will have more opportunities to master the industry’s latest technology

Minimize Liability Costs

When restaurants employ workers with previous training in the latest skills and technology, they tend to also decrease their liability costs, such as food poisoning, slips and trips, and worker compensation claims.

Last year, AmTrust Financial, a leading restaurant insurance company, published a report detailing how liability claims impact restaurant operations. It found slips and falls typically result in four-times greater paid losses than other injuries to the tune of $198 million in all.

The report also found that if an employee files a lost-time claim, they typically take up to 30 days to return to work. Cuts, puncture, and scrapes accounted for the least lost time at just over 18 days on average. Strains averaged 47 lost days.

Increase Employee Retention

It’s no secret the coronavirus pandemic has made it difficult for restaurant managers to retain their employees. Many businesses have permanently closed, and Yelp estimates 60% of the closures are now permanent. Others have had to run skeleton staffs to stay open and comply with local dine-in restrictions.

This has exacerbated the restaurant industry’s nagging problem—its turnover rate. Toast found that the restaurant industry recorded an all-time high turnover rate of 75% in 2019. Research from the Center for Hospitality Research at Cornell found the cost of employee turnover in restaurants averages $5,864 per person.

Even though the national unemployment rate fell to 7.9% in September, according to the Bureau of Labor Statistics, the unemployment rate in the hospitality industry is more than double that. This makes it necessary for businesses to increase retention.

“Despite the challenges facing the hotel industry due to COVID-19, we are seeing a 94 percent retention rate among our apprentices with over 40 corporate employers, representing all segments of the industry, and we know that the skills they learn through the program will help them be one step ahead once travel resumes,” Rosanna Maietta, president of the American Hotel & Lodging Foundation said in a statement.

Tax Credits and Employee Tuition Benefits

As of 2019, there were 17 states that offered tax credits to businesses that hire apprentices. States like California, Delaware, and Florida also offer tuition assistance benefits to apprentices who want to achieve a college degree.

Some tax credits range from $1,250 per apprentice (New York) to $4,800 (Massachusetts). Other states offer credits for monetary contributions to youth in approved internships and deferment of property taxes.

More information about state benefits for apprenticeship programs can be found here.

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