Foodservice is facing a staffing crisis as many laid off workers show understandable reluctance to return. So what can operators do?
By Tom Nightingale
It’s been well-documented that the effects of the COVID-19 pandemic on tight-margin industries like foodservice and hospitality were particularly devastating as closures and numerous restrictions have affected the last 16 months. Amid those effects has been the laying off of multitude of restaurant workers, either temporarily or permanently.
Now, though, as reopenings continue expanding across the country, employers need to attract workers back to the business, and the demand for labour is expected to ramp up as restrictions continue to ease.
The problem is, with COVID-19 having exposed the sheer uncertainty that plagues foodservice and hospitality, many restaurant workers have begun looking elsewhere, often exiting the industry altogether in search of more secure and sustainable long-term employment.
That poses perhaps an unprecedented quandary when it comes to restaurant hiring.
“The staffing challenges are very real and going far beyond the usual,” David Hopkins, President of the restaurant consultancy firm The Fifteen Group, tells RestoBiz. “We’re seeing challenges with the front of house, with servers, even with management. The shutdowns saw so many people laid off, and many of them got other jobs in other industries.”
Hopkins surmises that the restaurant industry usually attracts two types of workers: those who are in the industry for the love of it and the desire to remain in the workforce in the long term, and those who fall into the industry on a temporary basis — for example, while trying to figure out their career path or to help pay their way through college.
“Because of that, when people left the industry to find other jobs during the pandemic, many had no real inclination or motivation to come back,” Hopkins says.
It had also led to another concern in training. Ensuring a top-quality guest experience is a vital component for foodservice operations.
“That is likely to be a concern,” acknowledges Hopkins. “A lot of restaurants are worried about how they’re going to staff. But you don’t just want staff; you want good staff and people that can execute and are engaged and that you can train. I think it’s a huge challenge for restaurants right now. “
Another factor is that the wage subsidies and other worker relief introduced by the government has in no small measure led to some people taking the top-up money to continue their unemployment.
That is echoed by Tanya Gullison, chief revenue officer at global HR consulting firm LHH Canada.
“There has been subsidization that has somewhat discouraged in some cases people from re-entering the market, though obviously there may also still be concerns with respect to health and safety issues,” Gullison says, per Bloomberg Canada.
Are perks the key?
As a result of the exodus of the workforce and the struggle to staff during reopening, restaurants, as well as businesses in other industries like retail, are increasingly offering perks and benefits in attempts to attract and retain staff as a labour crunch increases competition for employees.
“I think what we’re going to find is that employers do have to offer a lot of incentives and reasons to attract workers because they’re not going to stay in the workforce in those part-time jobs if they don’t feel that it is advantageous to them,” says Gullison.
Measures seen from restaurateurs in recent months have been upping wages and offering bonuses like free meals and drinks during shifts, says Todd Barclay, president and CEO of Restaurants Canada.
“We’re hearing from operators across the country that finding folks to come back to work in restaurants is a challenge,” Barclay says, via Bloomberg Canada. “Hiring is in full swing but a lot of people have left the industry because of the uncertainty.”
One example is described by Bruce Miller, brand leader for a number of MTY Group restaurants including The WORKS Craft Burgers & Beer and South Street Burger. He says his company is offering its restaurant workers a free meal with every full shift, free unlimited non-alcoholic drinks, a free uniform, and a wage review after six months.
Certainly, Hopkins emphasizes that these sorts of measures can reap rewards. “Perks like free meals can make it a more lucrative and easier job, and also sometimes have better value than the actual money.” Using free meals as an example, he explains that while providing a free meal to a worker may cost a restaurant $5, it means the staff member doesn’t have to go home and cook dinner or buy a meal themselves at a higher price. That adds a layer of convenience that multiplies the appeal.
As for other perks that could be introduced, measures like retention bonuseses or tuition coverage can provide added incentive for an often-temporary workforce as they give potential employees an extra boost that they can’t find in government support.
Hopkins also noted that his company is talking to a number of restaurants (mainly full-service restaurants) about the redistribution of tips to help support back of house or other positions more.
Serving staff tend to be the best-paid people in the business after tips, often more even than the management of the restaurant,” Hopkins explains. “Most restaurants tip into a house pool that gets redistributed to some of the other staff. Maybe it’s time to revisit that and make those tip pools even bigger and distribute it to all the other staff.”
Hopkins notes that could have a significant effect.
The Fifteen Group’s studies show that consumers are now tipping more or at least as much as they did before the pandemic, so servers are making even more money right now per guest.
Hopkins and his company have long been advocates throughout the pandemic of restaurants’ raising their prices a little. He stresses that can have a big benefit here, as well. If an operator puts their prices up 10 per cent, servers’ tips also go up 10 per cent, and that gives more reason to redistribute a little more of that to back of house, kitchen staff, and other positions, as well as yielding more bottom-line profit which allows for the raising of wages and more competitive hiring.
Know what workers want
However, while low wages are the most common reason people cite for leaving foodservice work, one recent survey found that more than half of hospitality and restaurant workers who’ve quit said no amount of pay would get them to return.
Indeed, Hopkins stresses that while perks have their place, there is no substitute for being a warm, welcoming, and caring workplace.
“Treating staff properly has often historically been a problem in foodservice, but it’s even more important now,” he tells RestoBiz. “One of the best ways to attract staff is through referrals from your existing team. A lot of restaurants will give incentives where, say, if you refer a new staff member, you’ll get a $500 finders fee or whatever it may be. Obviously, those programs only really work if your staff really love working for you – nobody’s going to refer their friends if it’s not a great environment.”
Hopkins adds that while 20 years ago, structures around labour laws and paid overtime were severely lacking in foodservice, much progress has been made. However, he adds that he hopes the current climate can prompt “a bit of a reset”.
“This could get some restaurants thinking a lot smarter about their hours of operation and a lot may re-evaluate where they are making that money because of staffing issues,” he notes.
Knowing what would-be and current workers want will be key.
Data from One Fair Wage recently found that U.S. restaurant workers want a full, stable and livable wage (69 per cent), paid sick leave and health benefits (63 per cent), and improve working environment with less hostility (56 per cent), better COVID-19 protocols and enforcement (44 per cent), and increased hours (25 per cent).
A brighter future?
Hopkins predicts that the foodservice and hospitality labour market should see something of a rebound in the later summer and fall when government subsidies get cut back and the industry is past the initial urgent rush to restaff.
In North America, we’ve started to see some progress already.
Major chains like Chipotle, Olive Garden, and McDonald’s, have raised their entry-level pay, and employers are paying people just to show up for interviews, adding signing bonuses, and recruiting younger workers via TikTok.
It’s certainly become clear that old restaurant hiring methods are no longer adequate and adaptation is needed. If operators can embrace offering not just financial rewards but improved work-life balance and a better culture, they can still reap the rewards.