As the hospitality industry finds its way out of the pandemic, our challenges may seem colossal. When it comes to finding workers, navigating food costs, and paying high rents, there is hardly an eating establishment that does not feel the pain. According to the National Restaurant Association, 50% of operators say their biggest challenge is the lack of applicants for key positions. In addition, the USDA and rental statistics are making operators sweat.
Yet, in the face of this crisis, the restaurant industry will grow by over 400,000 jobs by 2022, leaving restaurants competing for a shrinking labor pool and impacting daily operations. Even more worrisome is the long-standing University of Michigan Consumer Index Poll that shows consumer sentiment is at its lowest since 1980. What we as an industry feel economical, our customers are feeling too. Consumers become selective about where they spend their precious dollars with less disposable income.
Picking Up Where We Left Off
As one of America’s largest employers, the restaurant industry is picking itself up. It has brought back 2 million jobs as of 2022 after losing almost 3 million jobs in 2020 due to the pandemic closures and mandates that hit the industry hard. Only when we look at numbers before 2019 do we discover that hospitality started to weaken before the pandemic hit. As I’ve already discussed in my 2019 Wall Street Journal article, the issues we face today were present before but amplified during the pandemic. The Bureau of Labor Statistics showed steady growth and resounding strength in the hospitality sector until September 2017, when numbers dipped slightly, and did the same in September of 2018 until being decimated by the pandemic.
Those anomalous numbers indicate the impact of wage hikes and other labor policies on operators and their success at navigating the changes. Operators have had to get creative to sail through this tumultuous time in our industry. We saw the effects on the ground with owners slinking away from traditional pay models and restaurant concepts. In the case of Red Robin, the culling of support staff looked to be the first casualty of bad policy problems.
Management Needs a Refocus
Owners have streamlined the menus, scrutinized food costs, and cut hours with just enough success to keep doors open. But now it’s time to get back to basics. It’s time to refocus on circumstances within our reach and return to hospitality’s core. That core has always been to put the guest first. Unfortunately, with an industry treading water, the target has shifted away from what the industry does best: to provide a well-rounded experience that keeps guests returning. Energizing managers to lead and focus the staff on hospitality can shift the tide. This opportunity is one that the industry must take.
Lately overlooked is management’s important role in creating a solid guest experience. While service turns its sites to streamlining menu costs and cutting support staff positions, focusing on management roles has fallen through the cracks. Leaning into an established management team can be an added component in the arsenal owners should utilize for their benefit as they try and gain a foothold on the new normal. The tradition of managers touching tables, expediting food, and running the house like clockwork must be dusted off and put into play. These small gestures take the manager out of the office and employ their presence to ensure workers are empowered in their jobs, elevating guest confidence which leads to a higher rate of return.
Employees who feel like a shift runs smoothly and that management is present are likely to be less transitory. Coming to work knowing that problems will be appropriately handled by strong leadership will show up in the service those employees provide. That good service then shows up in customer reviews and return visits. In the face of lacking employee retention, leadership is a huge step in changing the narrative. Strong management with a hands-on approach to front-of-house operations is critical.
For unfilled lower-level management roles, set sites on high-performing staff. For example, appointing senior staff to fill these roles can round out a managerial team and help dial in guest forward steps of service that keep customers returning. Offering a higher pay rate and meal perks are great ideas to incentivize employees to take on more responsibility.
Guest Perception is Everything
The guests should never see the struggle. When we focus on the struggle instead of hospitality, the guest experience will suffer. A strong hands-on management team focused on core values of service and hospitality will help rebuild the foundation of any establishment and the industry. It is time for owners and operators to check in with management teams and ensure they are getting back to the basics and the things that make hospitality and service so great.
There is an opportunity to maximize the role of management to usher in a new era of service and hospitality to breathe stability into the industry once again.
How do you incentivize an employee to take on more responsibility?
Embracing trusted employees by delegating responsibility will build morale and leadership. Small
perks like a modest hike in base pay and shift meals can build flexibility into a management team without the major expenditure. Simple but straightforward investments of these types can be especially appealing to workers during our current inflationary environment. Offering small benefits and opportunities to grow within the workplace creates a positive work culture.
How is engaged management critical to the bottom line?
Engaged management anticipates needs, encourages best practices, and responds to customer feedback. It also lends to employee retention which lowers the high costs of hiring and training. Engaged management not only promotes teamwork it maximizes profitability by proactively addressing workers’ as well as guest satisfaction. The philosophy of being present and accountable pays dividends.