The Post-Pandemic Labor Shortage: How Restaurants Can Handle Staffing Issues

The restaurant industry had it hard throughout the coronavirus pandemic last year. Food industry research firm Datassential estimated that 10% of restaurants closed permanently during the pandemic. Many restaurant and hospitality industry workers were laid off during COVID-19 and had to file for unemployment insurance and start collecting unemployment benefits. Customers have started eating and drinking at restaurants again as the pandemic abates, but now restaurants are facing a new challenge: restaurant workers are reluctant, unwilling, or unable to come back. Many have moved on to other jobs in different industries.

Restaurant owners are having trouble staffing their reopening establishments as consumer demand for dining returns post-pandemic fueled by a strong economy and extra funds from stimulus checks. Many restaurants are finding that restaurant jobs are not a top choice among job seekers right now. According to Restaurant.org, restaurant employment has been rising but “staffing levels remain well below pre-pandemic readings. Restaurants added a net 186,000 jobs in May on a seasonally-adjusted basis, according to preliminary data from the Bureau of Labor Statistics (BLS).” Many restauranteurs are reporting that they are having a very challenging time attracting staff to work in food service roles as waiters, hosts, and cooks. According to Restaurant.org, “in May 2021, 72% of restaurant operators said recruiting and retaining employees was their top operational challenge. That was up from 57% in April, and represented the highest reading in the nearly 20-year history of the Association’s monthly tracking survey.” On an earnings call, Texas Roadhouse CEO, for example, said that “It’s never been more difficult to attract and retain employees.”

If you are a restaurateur, you may be encountering staffing issues and exploring different strategies to attract and retain top talent. This article describes strategies restaurant owners can use to push through the post-pandemic labor shortage.

Be imaginative and generous in your compensation

Pre-pandemic, service industry workers long complained of low or minimum wages. One known step to attract talent in a worker shortage is to raise wages. In May, McDonald’s announced that they would raise pay an average of 10% in company-owned stores. The aforementioned Texas Roadhouse raised wages to stay competitive. Their CEO explained the flipside in their earnings call, which is that they now are raising their menu prices by 1.75% to afford the higher wages. Chipotle also had to raise their wages by 4% to cope with increased labor costs.

In addition to directly implementing higher wages, you can also add a compensation structure that appeals to workers including guaranteed wages, spreading tips or compensation evenly throughout the house staff (kitchen, hostesses, back-of-house, line cooks), extra compensation for specific shifts, or bonuses for retention. There are also other incentives you can offer to employees that can help them feel like a valued member of your team including free food, swag, and quality branded items, greater flexibility in scheduling, spot surprise bonuses for performance or for everyone, additional paid or unpaid vacation time, health insurance coverage or contribution, flexible shift scheduling, takeout meals, or childcare coverage. You might also offer considerable incentives for employees who can recruit their friends, family, or acquaintances, including extra lucrative referral bonuses for in-demand positions.

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Show that you prioritize employee health and well being

At the peak of the pandemic, many restaurants and other essential workers felt unsafe returning to work. As cases have abated, your prior labor force and potential new employees may still be anxious about COVID exposure at work.

As an employer, you can set clear policies that show your care and concern for employee safety such as providing paid sick time, letting staff members know it is ok to stay home if they are sick, performing daily health checks, encouraging vaccination, and providing PPE and other materials that can help your employees feel safer while interacting with customers. You may wish to install sneeze guards, if you haven’t already, and to provide quality masks, gloves, and disinfectants for employees to use (and so that they don’t have to pay for these things out of their own pockets). Communicate these policies clearly and openly, such as posting them in a conspicuous location and emphasizing them when you have the opportunity. Be sure to communicate these procedures and practices to any new hires so that they are also aware of all that you are doing to support employees.

Aside from the pandemic, it is important to show your workers that you can care about their health and well-being more broadly. Communicate that you care about employee well being first and foremost and show it by providing a safe work environment free of hazards, clear policies supporting sick employees, ergonomic improvements (anti-fatigue mats, step stools), ample breaks, tools that have been quality checked, and health insurance coverage or healthcare subsidies. Show and discuss these steps with your employees to explain that you made them with their well-being in mind. Be sure to show new employees these policies and procedures and occasionally refresh with your staff – don’t let your efforts go unnoticed.

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Solicit ideas and feedback – listen to your team

Your employees can be your best resource to learn what is and is not going well in your business. Take the time to listen to them to make sure they feel heard. Solicit anonymous feedback through a period survey or slips of paper – make sure you can collect honest feedback in many forms. Do what you can to action their suggestions. Empower them to take on projects or initiatives that improve the restaurant and its operations. This can help engage team members and empower them to feel ownership over the restaurant and their jobs.

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Make your restaurant fun and positive place to work – and then advertise that!

Invest in making your restaurant a place where people feel supported and love to work. This can come in many forms. Think about ways you can make your working environment full of fun, humor, trust, and respect. Do what you say you’ll do and treat everyone fairly. Celebrate your staff and make sure everyone knows how important they are to the success of your restaurant. Celebrate staff and joyous work moments on your social media to boost your brand as an employer of choice – you never know who might see the post. Most of all, thank your employees regularly for their hard work.



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