Addressing the Restaurant Labor Shortage

Do you remember the not-so-distant past when potential employees dropped off a resume almost every day? Or you hesitated to put in an ad for a server because you knew the onslaught of calls would be arriving next? Remember?

Well, those days may be gone for now, but, like the perpetual rotation of the sun and moon, they will come back around. So, the question is, what do restaurant operators do now during one of the most significant labor shortages in recent memory?

July 2021 saw a net gain of 380,000 jobs for the leisure and hospitality industry, with restaurants and bars accounting for a little over 250,000 of these positions. At the same time, in what’s called the “Great Resignation,” one in three workers is considering quitting their jobs, with 3.6 million people leaving their jobs in May.

As pent-up demand for dining grows, restaurants are faced with difficult decisions. Do they reduce operating hours, increase wait times, or look to AI automation and robots to fill the gap?

Most operators are going back to the basics, including staff retention, word of mouth, and increasing technology solutions.

Staff Retention

Even before the pandemic hit, restaurant turnover rates were high. In 2018, one study reported a whopping 75% average restaurant turnover rate. When comparing this to the private sector’s average rate of 46%, you can see that retaining employees in the restaurant industry has always been a challenge. So, what can restaurants do to improve this statistic?

First, you’ll need to understand why your employees are leaving. When an employee quits, take the time to speak with them by scheduling an employee exit interview. Was it the hours, the culture, fellow employees, management, lack of opportunity, or wages? Solutions can only be found once the causes are determined.

Consider speaking to your existing staff as well. How do they see the company culture, and what would they improve if they were in your shoes? When employees feel like they’re part of the game plan and that their employer truly cares about their well-being, you’re guaranteed a worker that thinks twice before heading to greener pastures.

Employee Referral Program

Offering an employee bonus for staff referring potential workers not only increases the labor pool but ensures a cohesive team that works well together. This incentive also helps staff feel that they are a more significant part of the whole, creating a restaurant culture centered on respect and teamwork.

Operators can also spread the net wider by offering customers incentives to refer successfully hired candidates, such as a free meal. You may also consider localized marketing that targets potential employees in your area.

Childcare Incentive

When schools closed due to COVID-19, parents were left with a difficult decision. Who stays home with the children?

Research conducted by the Center for American Progress revealed that, as of January 2021, there were 700,000 fewer parents with a child under 5 in the labor force than one year ago. This number includes parents who quit their jobs due to childcare issues and laid-off parents who gave up trying to find work because of lack of childcare. In addition to lost jobs, restaurants and other businesses are seeing an increase in absenteeism. Between September and November 2020, COVID-19 led to a 144% increase in worker absenteeism related to childcare.

Two organizations decided to try and do something about this long-time restaurant industry issue. The Parent Care Exchange by Bay Area nonprofit Tipping Point and ROC United joined forces to create an informal care economy. Gma Village first connected parents with grandmothers looking for a little extra income and more community ties. When funding ended, they considered creating Tipping Point’s Parent Care Exchange app that helps parents trade off childcare with other parents. They hope to test it by the end of the summer of 2021.

In the meantime, McDonald’s is expected to increase wages to an average of $15 an hour by 2024. They also reported that some franchisees in the U.S. would pilot employee benefits that include emergency childcare for employees called in at the last minute.

Whether opting for expanded benefits, increased pay, or other employee retention and hiring incentives, it’s clear that restaurants finding and retaining staff are pulling out all the stops to make it happen.

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