Let’s talk about the overarching issue at hand. Is the restaurant industry facing a labor crisis right now?
I wouldn’t call it a “crisis” per se; however, the industry is facing a strong abrupt need to adapt. According to the National Restaurant Association, there are about 12.5 million restaurant employees through the end of 2020, down 3.1 million from expected levels. Regardless of how one perceives the severity of the situation, the industry is challenged with significant pressure to attract stable talent as restaurants return to full occupancy. From both internal and external data we’re seeing, the industry is ultimately looking optimistic as businesses increase capacity from easing government restrictions, which vary regionally, and revenue levels rise accordingly along with tailwinds of pent-up demand. Plus, with a new emphasis on better working conditions that, if executed properly, will help increase employee satisfaction and retention the industry will see workers return.
Often, experts credit expanded unemployment benefits for people not wanting to work. AKA, they can make more at home than in a restaurant. Is this something you’re seeing as well?
Yes, and this is not isolated to just restaurants. This industry hires a majority of employees at minimum-to-low wages that are less than the amount of unemployment benefits one could receive. Based on first-hand accounts courtesy of our Franchise Advisory Board, there are numerous workers (including those outside of the restaurant space) choosing to not work and collecting unemployment benefits. This is unsurprising as it’s natural human behavior to choose receiving more money while staying home than working a highly demanding job for less.
But what are some other issues, perhaps some getting overlooked? Do restaurants need to take a status check when it comes to work-life environments, benefits, and what people really want from employers today?
Owners definitely need to reevaluate. We initially thought restaurant workers and those in similar jobs simply don’t want to work in closed, high-engagement environments. However, what we’re seeing is candidates are more selective in where they want to work due to the cushion of receiving unemployment and alternative industries offering better work-life environments and attractive benefits. Recommended by some of our third-party partners, to meet this increased selectiveness, owners more than ever need to have fuller (and more creative) job descriptions, not only to attract talent but to also define clear, measurable goals to which to hold staff accountable, which is directly tied to the business’ culture. I’m pleased to see many of our small business clients ask us how to construct effective job descriptions with the tools and resources we provide because effective business culture is a growing key to employee satisfaction and retention.
Additionally, restaurants are finding more creative ways to offer benefits to applicants as a way attract talent. Some businesses are providing incentives for showing up for the interview and then offering larger than normal referral bonuses to employees who recommended an applicant who is hired, onboarded and stays employed for a period of time. Moreover, the benefits that employers are providing to retain employees are becoming more lucrative. We have partners that facilitate employers helping employees with paying down student loan debt. Others are offering perks that were traditionally available only to larger companies and others are even offering tuition reimbursement.
Talk about the competition of virtual jobs now. Or remote work in general. How big of an issue is this potentially for restaurants?
This is an issue that seems to have no direct solution since there is no way to serve dine-in patrons virtually. The pandemic is creating more opportunity for virtual jobs, and workers now have more alternative and competitive options than just traditional in-person jobs, like restaurants. However, we do not feel this is a big issue; the data we’re seeing is that pent-up demand for restaurants is very high and as just discussed workers will return as owners revamp their operations properly.
We have seen however that certain technology is allowing some restaurants to take drive-thru orders and call ahead orders with remote employees. This requires additional training, software and management skills that are entirely new to this sector. For the restaurant that can take advantage of this technology, they may be able to see reduced labor expenses because they can staff only for peak times.
Elaborate on what you’re seeing in terms of health-safety risks, and how that’s factoring in. Are workers gravitating toward “safer” industries, like delivery service? And if so, how can restaurants combat this?
Yes, now with the aforementioned new job options available, workers have a much larger variety of lower-contact jobs to apply for and therefore can be more selective. It’s really a job seeker’s market right now. Humans are generally risk-adverse, and we are seeing restaurants having to get creative to counter the new stigma of "risky" environments. Restaurant owners should stay updated and compliant on regulatory requirements (i.e., PPE, temperature checks, etc.) and include those proactive measures in job descriptions. They can also establish or expand delivery and curb-side pickup services, so employees feel more comfortable in these lower-contact areas.
Related to this is that consumers have become more aware of food safety and are now accustomed to enhanced safety protocol. Additionally, the convenience of curbside pickup and expanded delivery through third party delivery providers has changed consumer expectations. So what was began as COVID safety compliance, we think will evolve to a new normal. As a result, employers will need to ensure they have policies and safety training will be come standard to services the new expectation of diners.