A persistent labor shortage is testing quick-service, fast-casual, and full-service restaurants. There were 500,000 fewer restaurant workers in October 2022 compared to February 2020, and tens of thousands of hospitality jobs are now being advertised in an uber-competitive hiring market. Execs from Burger King, Popeye’s and Checkers have had to deal with the labor shortage’s impact on their businesses. More granularly, fast-casual chains IHOP and Applebee’s Grill had 10 percent less staff in August 2022 compared to 2019, and a new Toast survey found that one in three restaurants have had a difficult time hiring this year. 

Restaurants that manage the labor shortage successfully in the coming months will be rewarded.
Due to inflationary grocery prices, families and friends could be eating out or ordering takeout more than usual after seeing a spike in such activity in 2021. And, as menu inflation has slowed, dining out instead of eating at home has already been a trend in recent months.  

Technology can help with the challenges of being understaffed and allow restaurants to distinguish themselves from competitors by offering an experience that puts diners more in control. Here are a few big ways technology can help with the labor shortage.  

Digital tools improve the employee experience

Table servers, cashiers and kitchen staff are strained. Restaurant operators need simple and unified solutions like platform technology to streamline the front and back of the house, eliminating unwanted tasks and mundane chores, making the employee experience (EX) more enjoyable and creating an atmosphere more likely to retain staffers and attract new ones. 

Simultaneously, the supply chain crisis hasn’t made restaurant operators’ jobs any easier. And they are turning to technology to help themselves and their staff.

For instance, Georgia-based Zunzi’s has two restaurants offering “South African-inspired” sandwiches. Taking a layered approach to technology, Zunzi’s utilizes mobile ordering at the table, kiosks for self-ordering, as well as handheld mobile tablets to allow the customer to order food based on their own preference, which bolsters a better customer experience (CX). By implementing this technology, 75 percent of its orders come from mobile ordering and kiosks, meaning the restaurant can run smoother with less staff doing the manual work of taking orders. Staff can therefore take on more tables, enabling the team to earn more tips. Zunzi’s is an example of investing in technology to improve both the employee experience (EX) and CX, and that’s making its owner and managers in the back office happy. 

Or take Groot Hospitality, which operates hotels, restaurants, venues, and clubs in the Miami area. After implementing a handheld POS system, it saw improvements from both customers and staff. 

The backend is sometimes an unheralded part of the technology challenge that restaurants face. Yet, in our Toast study, managing inventory and cost of goods topped the list of top tech challenges in 2022. Brands are starting to understand how back-of-the-house technology can help keep employees happy in their roles. For instance, Chipotle in September began testing a kitchen management technology to alleviate manual tasks for cooks and food-prep staffers.

Invoicing features and other digital record-keeping tools have become increasingly key for the everyday operations of restaurant brands of all sizes. Take Harris’ Restaurant, a San Francisco steakhouse that has increased its investment in restaurant tech and learned that having the right backend tools helped them generate an impressive ROI, smoother operations, and happier staff. 

Tech drives tips

Technology can help enable restaurant gigs to be more satisfying—and better paying. Across restaurants and hospitality businesses, touch-screen tablets are becoming the norm, allowing restaurant customers to easily order more menu items at their table without waiting for a server. At the end of a meal, touch screens allow diners to pay at their convenience and leave a 15 percent, 20 percent, or 25 percent tip with the touch of a button. On top of that, restaurants can set their own default tipping rates to help servers earn more. 

Here’s a scenario to show how the digitization of the restaurant experience helps to create the conditions for larger tips. If the dinner-and-drinks ticket for two is $100 rather than $60 because the customers could have an extra drink and time for dessert, the tip at 20 percent will be $8 greater. Servers with the opportunity to earn more should also be more likely to l be happier, more productive and stay with an employer. 

What’s more, with payment technology in the hands of guests, front-of-house staff can focus more time on welcoming patrons, detailing specials of the day, advising them on menu items, and checking in instead of spending valuable time scurrying back and forth to the point-of-sale terminal to swipe credit cards. Those are more rewarding activities that better the EX, encouraging retention and driving word-of-mouth among the local hospitality community.

Investment wins the day

Labor has been on the minds of restaurant operators all year. The National Restaurant Association’s 2022 State of the Restaurant Industry Report found that 50 percent of restaurant operators in the full-service, quick-service, and fast-casual segments saw recruiting and retaining employees as their top challenge.

Unfortunately, the labor shortage doesn’t seem to be going anywhere, anytime soon. But restaurants that embrace the challenge as an opportunity and invest in technology are more likely to win the day this quarter, during the holidays and well into 2023.

Aman Narang is President, co-founder, Chief Operating Officer, and a Director of Toast.