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Restaurant Operators and the Gig Economy

One of the many standouts from the National Restaurant Association’s 2024 State of the Restaurant Industry Report was the continued labor shortage. While it’s often been one of the top challenges for operators, the report revealed that 45% still have trouble filling all their positions. 

One of the solutions these restaurants are turning to is gig workers, with 25% of those surveyed believing this practice will become more common as 2024 advances. Let’s explore what this practice looks like and the role gig workers play.

The Gig Economy and the Restaurant Industry

The gig economy refers to short-term, freelance work provided as “gigs.” Businesses hire workers to perform a task, complete a shift, or work on a particular project. Today, numerous apps are making it possible for restaurants to turn to gig workers to help them combat the labor shortage. The following represent just a few of the many apps leading this trend:

  • Gigpro: The app connects hospitality workers with restaurants, hotels, bars, and resorts. Since 2019, they’ve connected businesses to workers, completing over 130,000 shifts. Restaurants post gigs, which may be a one-time shift, seasonal, or temporary-to-hire. Workers apply, and restaurants select their preferred applicant. 
  • Poached Shifts: Restaurants book workers as contract employees through the Poached app. They pay a $39 service fee and the worker’s wage. The shifts typically range between $15 – $30 an hour. 
  • Qwick: This app vets freelancers and ensures a minimum of one year of experience. Then, they use algorithms to pair each shift with the best match.

The Draw to the Gig Economy

Why are more people than ever drawn to the gig economy? Many report the flexibility that enables them to manage their own schedule and the ability to earn more income. Some find a good fit as a full-time employee with one of the restaurants that hire them for a shift. Restaurants may find their ideal staff member amidst the many shift workers they bring on when needed. What the gig economy does not provide is stability and benefits. However, for those participating, the freedom to choose often outweighs the drawbacks. 

For restaurants, hiring gig workers seems like a no-brainer. Hiring a specialized workforce when you need them would help tremendously with the industry’s high turnover rates and no-shows. Until it doesn’t.  

The Downside of Restaurants Integrating Gig Workers

There seems to be a never-ending battle between regulatory agencies and those companies entrenched in the gig economy, such as third-party delivery services. From minimum wage requirements to job classifications, thus far, the debate seems to be ongoing. When does a worker qualify as an independent contractor under the Fair Labor Standards Act? Good question.

The IRS defines independent contractors as: “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” 

Then, there lies the question: Would hospitality gig workers be as drawn to this approach if restaurants offered benefits, such as health insurance? Zia Sheikh, a restaurant worker who’s managed some of the top kitchens in Philadelphia and New York and worked as a gig worker, told the Washington Post, “Other professions have hard, unappreciated lives: teachers, cops, firefighters, nurses. But they have health insurance, 401Ks, severance…unions, pensions. We have none of that…It’s a broken system that breaks us, too.”

Restaurants Use Another Approach

Restaurants are also embracing another approach to hiring and finding qualified talent. Target Workforce uses advanced geo-location, mobile tracking, and IP address verification technology to find high-quality, trained staff at the lowest recruiting costs.  

Technology is redefining the restaurant industry. Perhaps it’s time it reimagined the possibilities in recruiting the best hospitality employees on the market. To learn more about Target Workforce or to schedule a consultation, contact EMERGING today.

FAQS

What percent of U.S. workers participate in the gig economy?

Upwork shows about 39% of U.S. workers performed freelance work in 2022. Their Future Workforce Report also revealed that 66% of hiring managers who use independent workers plan on increasing their number of freelance workers in the next two years.

Is the gig economy the future of the workforce?

The rise of the gig economy has disrupted the conventional employment model. Short-term roles defined by specialized tasks provide the ability to scale down or up as the demand or circumstances change.

While shown to benefit workers and businesses, there is an ongoing debate about job quality and workers’ rights. Today, one of the more challenging elements is the classification of workers. Prioritizing fair wages is one way to foster the well-being of gig workers. Is the gig economy the future? While growing, there is still a high demand for full-time employees.

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