Why it’s a Retention Crisis as Much as a Hiring One for Restaurants

    How can operators keep employees from leaving once they sign up?

    Employee handing food out the window to a customer.
    Adobe Stock
    To increase retention, restaurants should support their employee’s lifelong learning.

    In a recent report from messaging platform Medallia Zingle, 68 percent of U.S. hospitality workers said their organization was working with fewer staff today than pre-COVID. The study also found 38 percent of hospitality workers were considering, or already have plans to, leave the industry within the next two months.

    Harri, a workplace management company, put together a Hospitality Compensation Expectations Report from a pool of 7,000-plus hospitality workers and 100-plus enterprise-grade operators. Some points to emerge:

    • 52 [percent of employers raised employee pay between two and three times in 2021 (not related to minimum wage increases)
    • 52 percent of employees were planning to change jobs to achieve a pay raise
    • 20 percent more hourly workers were paid more than $15 per house at the end of 2021 compared to the start of the year
    • 61 percent of salaried workers were paid between $51,000–$61,000-plus annually (a 5.1 percent increase from the beginning of the year)

     

    No matter where the data flows from, though, sentiments ring familiar. It remains massively difficult to staff up today, especially with higher volumes, and restaurants are churning employees even faster than they were pre-crisis (169.9 percent at the non-management level, per Black Box Intelligence).

    In addition, the country’s quit rate climbed to a record 3 percent in September, meaning 4.4 million people handed in their notice. In October, there were 10.4 million unfilled jobs. Pundits suggest it’s a sign an increasing number of Americans are switching jobs for better pay, or electing to find flexible work to counter the pandemic’s continued challenges, such as child care and the volatility of school schedules.

    For restaurant and hotel workers, the number was 863,000, or 6.6 percent of the total hospitality pool. The closest sector was retail, at 4.4 percent.

    QSR chatted with Anne Fulton, CEO of career experience platform Fuel50, to talk about one of the under-publicized realities of this arena—that it’s as much a retention problem as it is a shortage one.

    1.Talk about upskilling and reskilling, and how these techniques might be going underutilized by restaurants today in the labor shortage?

    Properly structured upskilling and reskilling programs provide employees with countless opportunities to further their careers. By implementing such training programs, companies can make sure they have access to a talent pool that can be used to fill in-demand positions with qualified employees.

    The job market is tight. Employment at bars and restaurants dropped by 7.6 percent between February 2020 and September 2021. With so many locations understaffed, restaurants need to find ways to increase productivity despite a reduced staff. Upskilling programs provide employees with the skills needed to perform their jobs more efficiently without making them have to work any harder.

    These programs are also a helpful tool to increase employee retention. Investing in your employees’ career journeys is a great way to demonstrate how much your company values its workforce. Employees want to know that they have a future in your company, like the opportunity to move up towards a management position, and they are more likely to stay if these opportunities are articulated and presented regularly. Preparing your employees to take on new, higher-paying roles may just be the best way to avoid future staffing crises.

    A recent report by Fuel50 explains that driven employees want transparency into opportunities to learn new skills, take on different assignments, shadow on projects, find coaches and volunteer opportunities, and work with different teams and managers. In other words, they are looking internally for personal development journeys and new challenges.

    2. What do you think are some factors causing this current dynamic? Is it wages, benefits, expanded unemployment, upskill training? Something else restaurants aren’t thinking about?

    There are several factors behind the labor shortage we are currently seeing, but low wages remain the main driver behind staff shortages. Employees who lost or left their jobs during the pandemic are now seeking higher-paying opportunities, sometimes in other industries. But the pursuit of higher wages isn’t the only reason some workers are abandoning the restaurant industry.

    Data from Black Box/Snagajob shows that foodservice workers want a job with consistent hours and a set schedule, which restaurant shifts don’t always provide. In addition to seeking a consistent work schedule, restaurant workers who left their jobs this past year sought roles that offer more promotional opportunities. The pandemic provided restaurant employees with the opportunity to reevaluate their careers, and many are now seeking job opportunities that offer increased professional development.

    3. How important is it for restaurants to share the career ladder message? Is that something that gets overlooked too often?

    It is extremely important. The key message here is that restaurants have unique opportunities to provide a career path for people that does not require tertiary education as a precursor. So, if you want an industry that can create a future for you that is self-driven and self-sustainable, hospitality has a unique value proposition. There is a low barrier to entry, but the opportunities are infinite. Some of the wealthiest people in our community have started on the front counter at a McDonald’s and worked their way to eventually become franchise owners or have created their own unique restaurant chains by starting at the very beginning.

    Many restaurant chains provide unique and amazing learning and reskilling opportunities with great investment in their people’s learning. McDonald’s, for example, offers their employees a variety of development opportunities, which range from world-class training programs to high school completion courses and higher education tuition assistance. If they want to ramp up their recruitment efforts, restaurants need to showcase the long-term career opportunities they provide.

    According to Rob Lauber, former chief learning officer at McDonald’s, “The roles found in restaurants and retail have been stigmatized over the years as dead-end jobs when in fact, they provide valuable ‘first job’ opportunities where people can learn how to work, team with others, communicate with customers, handle conflict, and much more. It is critical that hospitality, and almost any industry with entry level roles, can articulate how they can provide access to a future, either within that business or elsewhere.”

    Ultimately, if they want to ramp up their recruitment efforts, restaurants need to showcase the long-term career opportunities they provide.

    4. What are some other retention strategies restaurants should invest in?

    To increase retention, restaurants should support their employee’s lifelong learning. Many of the food and restaurant chains will support whatever long-term learning plans employees have and are keen to see them grow, even if it means that they eventually fly on to other things. One example is McDonald’s Archways to Opportunity, a comprehensive education strategy with multiple programs focused on upskilling the workforce, regardless of where they are on their journey.

    “Restaurants are under a lot of stress right now trying to staff critical roles. Beyond articulating a future there, these businesses also need to lean further in to providing scheduling flexibility,” Lauber said. “So often, a manager is the one who sets the schedule by putting names against shifts without getting input from the workers themselves about their availability. This leads to absences and turnover which further challenges operations in these businesses. Recognizing that there needs to be a balance, restaurants need to work even harder to demonstrate flexibility. I have seen a few technologies emerging that make this even easier for restaurants to make a reality. Investing in this area is of equal importance to showing a future. Both create places where people want to work.”

    A recent SHRM survey highlights other steps employers are taking to attract and retain workers, including offering referral bonuses, hiring external or temp workers, upskilling and reskilling staff, and increasing pay. Offering incentives like referral bonuses doesn’t just provide you with leads to new workers, but it can also serve as a great retention tool for current employees looking to boost their pay.

    5. How long do you think this labor shortage will last? Should we buckle up for the long-term?

    Predictions about the ongoing length of the current labor shortage range from months to years. The direst projections estimate that the labor shortage is somewhat permanent and employee retention will never return to pre-pandemic levels. Because the end of the labor shortage remains uncertain, it’s more important than ever for business owners to rethink how to attract employees, all while being mindful of the challenges that come along with unforeseen concerns over the pandemic.

    Fortunately, trends over the past year have shown a gradual return to the workforce. While the return doesn’t quite meet the demands of business owners, it looks like the labor market is heading in the right direction.

    6. And in what ways might this crisis forever change how restaurants recruit, retain, and treat workers?

    Creating newly energized and democratic partnerships between employees and the restaurant—true partners in the future of their team—are likely to be a compelling new ethos for this industry. After all, who didn’t have a stint as wait-staff or bar staff sometime in their career? And we can all remember some valuable life learnings from these experiences. A necessity for every professional at some point in their lives is to have all the learnings associated with front-line service and teamwork.

    As the demands of consumers rise, restaurant owners will need to reevaluate their recruiting, hiring, and retention processes to entice employees to return to work. A focus on tech-driven staffing solutions, greater flexibility in schedules, and more benefits will be needed to entice employees to work in the restaurant industry. Improvements in tech, flexible working hours, and benefits like a retirement fund and health insurance should not be limited to the corporate world. Finally, offering upskilling and reskilling programs show that you are invested in your people, increasing their skillset which benefits both you and them.