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How the restaurant industry can survive the labor shortage
The restaurant industry is suffering whiplash as it careens from a world of mandated closures that permanently shuttered one in 10 restaurants to a massive labor shortage that has left the industry one million jobs shy of its pre-pandemic levels as of July.
In the short term, restaurant owners can staunch the bleeding by working with skeleton crews and embracing an “on-demand” workforce. But long-term success will require meaningful changes; there’s no going back to “the way things were.”
The good news is the strategies restaurants need to survive the labor shortage—creating a better workplace and investing in technology—will also make them more resilient and profitable after the pandemic has passed.
Hire your workforce “on demand”
The restaurant industry remains 10 behind pre-pandemic levels.
Restaurant-specific, on-demand hiring apps can help you ride out the labor shortage with temporary staff. Think of them like Uber for restaurants. Managers can use them to hire gig workers for a single shift on short notice.
Juggling last-minute scheduling changes can be challenging, especially when you’re already operating with a small staff. These apps fill vacant shifts on short notice.
Each one uses an internal vetting process to pre-qualify candidates and ensure the temporary employees hired have a baseline set of skills to step in and fill a shift.
In the short term, restaurants face a ton of uncertainty. Temporary workers allow you to scale up or throttle back on staffing based on demand. This means you can provide the service your guests expect with less overstaffing if circumstances change or public health restrictions return.
Workers hired through these apps are going to cost you more than your permanent employees, both because of the higher hourly rate and the fee charged by the app for the service.
Introducing independent contractors to a restaurant’s workforce means learning a whole new set of employment rules regarding taxes, benefits, and hours. Besides federal rules, the distinction between independent contractors and employees can trigger different rules at the city and state levels. It’s up to employers to understand these differences.
Another drawback is that gig workers naturally won’t be as productive as the employees your restaurant has trained on your stations, procedures, and menu. Although, having technology that many restaurant workers are familiar with is helpful.
Ultimately, the extra costs and potential drawbacks can be worth it in a pinch.
If it comes down to not being able to open tomorrow because there is no one to staff the kitchen, or the threat of not delivering the experience guests expect because the front of the house will have too few servers, then temporary workers are worth it to ensure the restaurant’s reputation remains untarnished.
Take online training
The traditional model for training in the restaurant industry involved paying your ace server a little extra to “team up” with a new hire. Scrap the old model in favor of online training because it’s repeatable, scalable, and can hold new employees accountable.
Online training allows you to make sure employees are completing specific training sessions. It also creates a simple system for employees to earn promotions.
For example, online training creates objective measurements of a server’s progress, so if they complete x, y, and z training modules, then they can qualify for a promotion to senior server.
Online training also helps new hires get up to speed fast. The training can be sent to a new staff member immediately upon hire, so they can nail the basics before their first shift. This means less time ‘team training,’ which allows top servers to get back to taking their own tables faster.
The old training model leads to a never-ending churn of wasting your top servers’ time if the new hire doesn’t stick around.
Online training allows restaurant owners to measure how effective the training is and how it can be improved.
For example, if employees are skipping over certain parts of a video, it may be worth revising those sections to make them feel more relevant or interesting. Conversely, if viewers repeatedly rewind the same part of a video, it might mean the section is unclear. The analytics from online training videos can show you all this information and more.
Consider better benefits (and pay)
The better a restaurant pays its employees, the more competitive it can be in a tight labor market. But the pay isn’t the only way to stand out as an employer.
Be daring. Consider benefits workers don’t traditionally expect to find in the restaurant industry.
These benefits can take many forms, such as:
- Paid time off and guaranteed days off
- Sign-on bonuses: in some markets, restaurants are offering bonuses that range anywhere from $500 to $2,000 if new hires stay on for six months. That was unheard of before the pandemic, but that kind of thing gets eyeballs in a competitive hiring market like this.
- Better shift meals
- Tip pools for more consistent pay for each shift: restaurants are increasingly specifying the tip policy they offer employees in the job description.
The benefits being offered today are amazing compared to the past. But, the benefit to restaurant owners is better benefits is likely to draw better employees.
While better pay and benefits are obvious advantages for hiring, there are still low-cost ways restaurants can keep employees engaged and happy. These strategies improve retention and can help a restaurant build its reputation as a good place to work.
- Involve employees in non-traditional tasks: for example, invite employees to help develop the menus. This has been a trend in the bartending world for a while now. Many people go to certain bars to engage with a specific bartender. Innovative restaurants may find similar opportunities and freedom for other staff to let their creativity shine, too.
- Provide transparency and insight into sales goals: ensuring all are aware of the needs and goals for the restaurant’s success creates buy-in. Creating leaderboards for different goals and giving awards for accomplishments in pursuit of those goals can provide extra incentives for employees to stay engaged.
Restaurant owners can also use technology and new organizational approaches to get the most out of their restaurant workforce. These techniques help cut wasted time and make life easier for your employees, too.
Investigate opportunities like:
Investing in scheduling software
Ditch printed calendars and traditional scheduling methods. Industry-specific software allows employees to see their schedules the moment they’re posted, request shift swaps from their phones, and have scheduling changes approved by a supervisor, all without setting foot in the restaurant.
The software also provides a way to eliminate time-clock padding when employees clock in before their shifts start or after the end of their shifts.
Adopting online reservation systems
Allow guests to reserve tables and check in online, saving the host time. Online reservation systems also offer an opportunity to collect data about guests to tailor their next visit to their preferences.
Using inventory management software
Software that saves managers time and effort can also improve the bottom line.
Picture a manager in the back office facing a long night of inventorying after the restaurant has closed.
Putting the software in her hands to condense a five-step process down to two steps let her go home earlier, versus a manager who is still counting supplies with a pen and clipboard in hand–who do you think is going to stick around and work for you?
Centralizing your kitchen prep
Not all workforce streamlining requires new technology. Owners of multiple restaurants should consider pulling the prep out of each site and placing it in a single, central location. This minimizes the number of staff needed for prep, allows larger batches of food to be prepared, and improves consistency.
Adaptation will strengthen your restaurant for tomorrow
Being an employer of choice requires some investment, but offering employees better benefits and time-saving technology can help you recruit staff.
Adaptations like online training, centralized kitchens, and online reservation systems will allow restaurants to run leaner, more efficient operations long after the current labor shortage eases.
The challenges thrown at the restaurant industry during the pandemic continue to change, but if restaurant owners evolve to meet these challenges, it will lead to a more resilient business in the future.