The current labor crisis is one of the biggest hurdles facing restaurants in 2022. The National Restaurant Association’s 2022 State of the Restaurant Industry report confirmed what we, deep down, already know—the labor shortage isn’t going away anytime soon.
The report found that seven out of 10 restaurant operators did not have enough employees to meet their needs and support the increasing demand. This aligns with another poll conducted in September 2021 that found 85% of restaurants surveyed were having difficulty finding sufficient staff. Even before COVID-19 hit, turnovers were high and expensive, and dependable, hard-working employees were not always easy to find.
While glimpses of hope surface now and then, many experts in the field feel that we’ll be looking at a continued labor crunch at least through 2022.
I’ve written about the importance of a restaurant’s culture in bringing in new staff and retaining them. But, some of the restaurants with the best cultures in the business—team-oriented, upbeat, flexible scheduling, and higher than average pay—are still facing shortages that have left them cutting hours or closing down sections of their restaurant.
Recently, I had the pleasure of speaking with Mathew Focht, CEO of EMERGING, co-founder of Consolidated Concepts, and founder of Emerging Concepts. All of his brands are designed to support those in the restaurant industry. He saw the issues looming once restaurants started reopening and knew he had to find a way to help his clients with what he saw as the two most pressing needs: labor and menu pricing in relation to rising inflation and supply chain upheavals.
In this article, Focht discusses the solution he came up with for the labor shortage. Those in the restaurant industry may want to pay close attention.
Mathew Focht and Target Workforce
Traditionally, our business has been in real estate, data science, support, supply chain, and finance. We knew about nine months to a year ago what was coming ahead of us and that we had to do something. We weren’t focused on labor shortages or menu pricing, and we knew we needed to tackle these because of what our clients were reporting. In tackling these for our clients, we came up with two solutions.
For labor pains, we developed Target Workforce.
The restaurants we support needed to start hiring as they came out of COVID. One of these, a restaurant-entertainment concept, needed to hire 170 employees but could only come up with 140. As a result, they couldn’t open up part of the restaurant due to the staffing shortage.
Even though they were performing extremely well, this was hampering their revenue opportunities. This brand is a front-leading, exciting, awesome concept that’s not lacking. It has a great culture and offers an above-average competitive wage that’s well above the local market. It’s the kind of exciting venue that servers and bartenders would want to work for.
So, what happened? We saw that those in the hospitality sector before the pandemic struck either switched careers or went back to the restaurants they worked at before COVID. Of course, those restaurants greeted them with open arms, “Yes, please come back!”
The labor pool has shrunk to such a significant level that it’s led to an insufficient number of employees returning. There are also very few people looking to start working in the restaurant industry after the effects of COVID and those that do have minimal hospitality experience.
Advertising That’s Not Working
Many operators turn to Indeed and Facebook when advertising for employees. Unfortunately, the candidates they find often have little experience and are not of the same caliber that they would have considered hiring before the pandemic. As a result, when they find applicants and schedule interviews, only about 50% of these people show up.
So, we asked ourselves, how do we reach potential servers and other employees when not many people are coming into the industry?
The Answer: Hyper-Targeted Marketing
Our data science division was working with a company that has the only U.S. patent for linking a phone’s IP address to the person’s home address. They’ve mapped out the entire U.S. and every home to an IP address. And that allows us to do a couple of things.
We use geo-framing and GPS to locate like operators and restaurants in our client’s area. We may pick restaurants that we know have good training programs, are known for their quality culture, and friendly, reliable staff. We then look at these restaurants to see what staff have shown up consistently for the last 60 days so that we know they are trained and dependable workers. We can see this through the IP addresses on their phones, the ones that have consistently been present at the restaurant for the last 60 days. We know that these phones belong to the servers, bartenders, and other staff.
And now we can advertise and promote our open positions directly to these phones. We can advertise on the channels they use 97% of the time on their phones, such as their apps and browsers. We can reach these highly qualified people by sending targeted ads on the most popular websites at the right time.
We can also advertise on their other devices, such as their home TVs. We can put great packages together that let them know we’re hiring and would love to consider them for the position and then target them through mailers. This is really effective when you’re opening in a new market or your first restaurant. You can get ahead of it and focus on high-quality servers and other staff.
If they decide to apply for the position, we can verify and validate where they came from. We can perform a 30-day look back, verifying their IP and home addresses and that it was a person we targeted and a good return on the investment.
This type of advertising is so much more affordable than going through Indeed, Facebook, and other channels because it’s so hyper-targeted. That’s why we call it Target Workforce, and it may well change the way restaurant operators find employees.
Gonzalo Ulivi, CEO of Silverspot state-of-the-art cinemas, had this to say about Target Workforce, “Target Workforce has allowed us to identify higher qualified potential hires than other means. A great technology that serves us well in these challenging industry times.”
