Labor Shortage Defined:

  • Simply put:  Employers in the restaurant sector cannot find workers to perform the job at the current wages they’re offering. 
    • Wages do not necessarily mean $

Labor Shortage Causation:

  • It existed prior to the pandemic
  • Safety
  • Wages
  • Home needs
  • Covid related family care
  • Child care
  • Job security – lack there of
  • Acceleration of trends/dreams
  • Juice ain’t worth the sqeeze

Outlook:

  • While other sectors struggled with growth, the leisure and hospitality sector (restaurants included) added:
    • 285,900 in February 2021
    • 280,00 in March 2021
    • 331,000 jobs in April 2021. 
  • Notable junctures:
    • Vaccination count increases (rates decreasing) – safety concerns
    • The unemployment buffer ends June 26th, 2021
    • Most, if not all colleges resuming in-person activities in Summer/Fall 2021
      • Not living at home; have to support themselves
    • Schools/Day Care fully open in September (child care less of an issue)
      • 15% of Ohio schools either fully remote or hybrid
      • 25% of Day Cares closed Nationally
    • Restaurant surge to slow down?
      • Supply & Demand of staff
  • Unemployment rates in Hosptality Leisure:
    • Feb. 2020 5.7%            Feb 2021 13.5%
    • Mar 2020 8.1%            Mar 2021 13%
    • April 2020 39.3%         April 2021 10%

Tactics:

  • Better job descriptions (Highlight your workplace truthfully!)
  • Increased wages – not uncommon in shortages
  • Increased benefits
    • Health insurance
    • Tuition/educational programs (Chipotle)
    • PTO
    • Ride share credits
    • Day care partnerships/discounts
  • Hiring fairs
  • Sign-on bonuses
  • Referral bonuses
  • Stability plans/employment safety nets
  • More flexibility – larger labor pool of part-time workers
  • COMPETITIVE ADVANTAGE

Pro Tips (Courtesy of Chuck Helden, Professional Recruiter and Friend of the Show!)  

  • The best restaurant organizations are doing two main things.
    • Being honest with employees from the start about the expectations, and
    • Have a culture in place to communicate, with them, especially appreciation for what they do – but critique as well.  The complaints I hear most often from restaurant managers that are unhappy is that the work is not what was originally described, and that they get no feedback on their performance
  • I think the labor pool will get a bit better as the unemployment goes away, especially among hourly workers. 
    • There are valuable long-range lessons here for restaurants.  One is, you should always – ALWAYS – be looking for talent…..not just to replace those mediocre employees, but also to know that you best employees are not staying with you forever.  (There are people like me always looking for them!).  The other is more of a total industry lesson, and that is there is a cultural change taking place, and even hourly employees are going to have to be handled differently than in the past.
  • High wages are band aids; very short term solutions to the labor situation. So if someone accepts a new position, but their old company says, “here’s another $3,000 to stay”, I ask them if that extra $70 a paycheck is now going to alleviate all the issues that made them unhappy.
  • Is there anything you would want our listeners to hear about the labor issue in general?
    • The owners who are good business people know and understand that people are their #1 asset, and people are also their biggest cost.   The time, effort, and money involved in bringing on a new employee, onboarding them, training them, etc. is huge.  And when that employee either leaves or doesn’t work out after a month or 3 months, those are lost costs.  It sets the restaurant back.  So I understand that in an emergency situation, operators will grab any port in a storm.  But no matter what the current labor situation is, not doing due diligence with your hiring, and not attending to your staff, is crippling restaurants, and could be death knell for small independents.  


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