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    Lion's Choice Attacks the Labor Battle Head On

  • The 51-year-old brand donated a location to help grow jobs in its home market.

    Web Exclusive August 13, 2019 By Danny Klein
    Lion's Choice
    Lion's Choice is staying agile in its battle for quality workers.

    What’s unfolding in St. Louis is an all too familiar tale for restaurants. Since 2015, the city and its surrounding markets witnessed an increase in restaurant units of 30 percent. Meanwhile, St. Louis’ population growth is flat, and has been throughout that same span. In fact, in the city itself, it’s fallen a shade over 1 percent.

    And here’s the kicker: State data shows there are more than 1,000 restaurant job openings in the area, every day.

    “When you start suddenly creating a different supply—a 30 percent increase in [quick-service restaurant] units and you don’t have a new, growing population base to staff it? It’s tough. It’s real tough,” says Michael Kupstas, chief executive officer of Lion’s Choice, a local 30-unit chain founded in 1967.

    According to the National Restaurant Association’s Education Foundation, more than 5 million people between the ages of 16–24 are neither enrolled in school or working today in the U.S. Recent studies note that more than 75 percent of these disconnected young people, known as “opportunity youth,” seek gainful employment to improve their quality of life.

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    The Department of Labor’s Bureau of Labor Statistics found that 1.7 million teens worked in restaurants in 2018—the same number as 2007. While that sounds decent at surface level, it’s unfolded as the number of restaurants ballooned close to 16 percent in the past decade. Per the same data set and timeframe, restaurant workers ballooned by 2 million.

    From 2010–2017, restaurants accounted for one out of every seven new jobs, according to The Wall Street Journal

    Another data point: In TDn2K’s latest Black Box report, 70 percent of companies reported an increase in their hourly employee headcount during the second quarter—the highest level of reporting in the last three years.

    What this boils down to is exactly what Kupstas mentioned: Restaurant growth is outpacing population growth. It’s requiring more jobs, but unemployment figures are at 50-year lows. Turnover is rising due to the gig economy and options available. Yet, also according to TDn2K, 44 percent of operators said they expect to up their number of restaurant managers. With hourly employees, 52 percent of restaurants expect a rise in staffing, with only 5 percent planning a reduction.

    Too many restaurants. Too many jobs. Not enough workers to fill them.

    However, to the NRAEF’s point, there are “opportunity youth” pools of employees and other untapped resources waiting to be harnessed. McDonald’s recently partnered with the AARP to attract older employees. A move on trend, seeing as the U.S. Bureau of Labor Statistics named the 55-plus population as the fastest growing segment of the workforce. By 2024, they will represent nearly 25 percent of the civilian work base, it predicts. McDonald’s hires nearly 250,000 new people each summer.

    All of these realities (and more) swirled through Kupstas’ mind in June when Lion’s Choice saw a chance to flip an unfortunate turn into a positive development.

    The brand’s restaurant at 3407 Dunn Road in North St. Louis County was closing due to dynamic changes in its trade area. It was a tough call, Kupstas says, but, after 38 years, the store simply didn’t have any life left.

    Robert Millstone, managing partner of Millstone Capital Advisors, Lion’s Choice’s parent company, suggested the team connect with Michael McMillan, the president and CEO of Urban League of Metropolitan St. Louis.

    Lion's Choice
    Lion's Choice's goal is to add five restaurants per year for the time being.

    McMillan had a front row seat to the workforce difficulties taking shape each day in St. Louis. “We felt that providing a community training program could help fulfill this extreme demand for talent,” he said of the 1,000 restaurant job openings a day. “Applicants could confidently enter the workforce with the necessary short-term training needed to obtain these jobs.”

    Lion’s Choice answer: The brand donated the 2,771-square-foot restaurant and .95-acre site to the Urban League.

    In partnership with the Missouri Restaurant Association and chancellor Jeff Pittman of St. Louis Community College, the restaurant will now become a training center for people interested in seeking gainful employment in the restaurant industry.

    This branch of the Urban League is actually the second largest in the country. It has deep roots transitioning young people from the area into the workface. When Lion’s Choice connected, Kupstas says, the chain didn’t realize a curriculum was already built. After falling through on three different properties, the program was just looking for a home to get started.

    Five years in development, it allows for post-high school work without a culinary degree, focusing on educating and teaching basic restaurant skills in the front and back of the house. The curriculum provides a pathway into the middle class, Kupstas says.

    One positive thing about the spot, too, is that it’s a working restaurant ready to simulate real life. Lion’s Choice left some tables, chairs, the walk-in, cooler, stainless shelving, and other equipment.

    And yes, people who progress through the program could end up employed and helping Lion’s Choice. Kupstas says the brand has more units not fully staffed today than any other time in its history. The company employs roughly 625 people. “I can honestly say I wish we had another 10–15 percent more,” he says.

    “I feel like there’s more work-life balance challenges that [younger generations] are attempting to deal with, which does mean that we’ve got to be flexible and accommodating. At the same time, there’s no better place than the restaurant business, right?” — Michael Kupstas, Lion's Choice CEO and president.

    But beyond just filling roles, Kupstas believes the opportunity could turn into much more than a gap-stopper for these workers. According to the National Restaurant Association, nine out of 10 restaurant managers and eight out of 10 restaurant owners started their careers in entry-level positions. Why not look at this chance as the start of something much larger?

    “The restaurant and hospitality industry is a huge point of entry for any career you choose,” Kupstas says. “It teaches great business skills. It teaches specific food handling and restaurant skills.”

    “I think, for whatever reason, restaurants and hospitality are already seen as a last resort,” he adds. “Like, I’ll go find a job somewhere else and if I can’t find one I know that will always be there. It’s sad with all the focus and all the great success stories that exist where people start, stay in it, make good livings, and find it to be gratifying, that it still has a bit of a blemish on it.”

    The program, though, puts restaurant work on a pedestal. “It shows this really can be a pathway to a great living and a great career,” Kupstas says. “We’re anxious to help in any way with this facility, whether it’s in systems, in teaching, or additional funds or equipment. Let’s just see if this really works. Let’s see if we can make a dent in a real tough labor market.”

    Lion's Choice
    It’s about creating a culture employees enjoy being a part of, anchored by good wages and solid benefits, says Lion's Choice CEO Michael Kupstas.

    While Lion’s Choice has faced down its share of labor challenges, Kupstas says, it benefits from long-standing equity in the community, and its tenured employees reflect that. There are managers who have been around 30-plus years. Kupstas says he just celebrated a worker who hit four decades with Lion’s Choice.

    Yet, like restaurants across the wage pressure lexicon, Lion’s Choice has dealt with increasing market rates as demand rises. “We just spent time in our open enrollment and negotiated hard to actually stabilize benefit costs and to get a slight decrease,” Kupstas says. “We think that’s a big attractant point right now, where health care and benefits are going up across the country for the most part based on a bunch of factors. Historically, we’ve been able to take that down.”

    Lion’s Choice announced to employees recently, those eligible for benefits, that it’s providing a decrease in health care. “I think, ultimately, what we hear from our managers and our team members all the time—what makes them stay with us and why they like it here—is that they feel part of the family and part of something special. That’s a point of leverage that we have that I’m going to suggest others don’t.”

    It’s about creating a culture employees enjoy being a part of, anchored by good wages and solid benefits. One they wouldn’t consider leaving.

    And here’s another seldom-cited reality of restaurant employment. This up-and-coming generation simply has a different set of priorities than past groups.

    “I feel like there’s more work-life balance challenges that they are attempting to deal with, which does mean that we’ve got to be flexible and accommodating,” Kupstas says. “At the same time, there’s no better place than the restaurant business, right?”

    Lion’s Choice is agile with its hiring, offering hours that flex to schedules. There are couples in the system, Kupstas says, where one works mornings, the other afternoons. Someone from Monday to Friday. Another on the weekends. “That’s a big factor in this industry,” he says. “The 9-5 office jobs for couples who both have other choice they have to make. Here they can still be able to raise a family and have children, and enjoy each other’s company.”

    Lion’s Choice’s
    Lion's Choice pulses LTOs, like this Sweet ‘N Smoky BBQ Pulled Pork Sandwich, but its core menu sticks to simplicity, and execution.

    There are Lion’s Choice stores where people work a day or two a week. This is especially powerful with people hoping to load up on extra-curricular activities headed into college.

    “Again, it’s that market breakdown,” Kupstas says. “What’s great in central St. Louis isn’t good is West County. We just have to be flexible enough to adapt and provide the needs of the potential employees.”

    Lion’s Choice’s simple menu helps as well, he adds. It gives employees the opportunity to focus on quality and preparation and presentation and less about a multitude of options.

    There are four product pillars: Roast beef, fries cooked through a three-step process, and customization. But even there, Lion’s Choice doesn’t flood itself with complexity.

    It has a 25-foot sauce bar that lets guests take the reins without bottlenecking operations. “I think the simplification of that, yet the great execution of it, does make it an easier place than a menu that has 16 panels and wants to be something to everyone. That’s not in our mission or vision. That’s not the way we execute,” Kupstas says.

    Despite closing this particular store, Lion’s Choice is in growth mode. The brand is working to open five units a year and prove it can thrive outside St. Louis. Two stores opened in Kansas City over the past year, with three more in the pipeline. Lion’s Choice is also in the midst of a remodel program to show guests and potential employees the brand is riding an upward trajectory.

    “As we start to add those layers, as we grow from market to market, it’s our hope that provides yet another opportunity for hiring to appeal to that group,” Kupstas says.