Despite the new technologies in foodservice that were accelerated by demand during the pandemic, streamlined amenities like online ordering, curbside pickup, to-go, delivery, and meal prep kits have one thing in common—workers. Those services cannot be offered unless you have the bodies in place to make it happen. When a labor-intensive industry faces a deficit in that department, the trickle-down is what we’ve been experiencing as of late; reduced services, shorter hours, smaller menus, and at times, two-to-three-day closures designed to help a shop, “re-group.”
When restrictions were lifted at the onset of vaccine distribution, customers returned to restaurants in droves, hungry for pre-pandemic normalcy. The problem was, temporary federal unemployment relief programs had not yet ended for workers who were forced to scramble amid the 2020 shutdowns. Therefore, the foodservice industry was ill-equipped for the onslaught of customers.
The bright spot came on, ironically, Labor Day. All temporary federal relief programs ended, making some 7.5 million workers who were still getting aid eligible to be back in the workforce.
Question was, how do restaurants get workers back?
The restaurant industry had some creative ideas. They provided incentives to entice workers using motivation tactics not seen before. Some job seekers were paid as a thank you for simply filling out an application. Other perks include paying higher than minimum wage, free meals, signing bonuses, never-before-seen benefits, child care options, tuition payments, good performance bonuses, and financial rewards for bringing in other workers.
It seems to be working, albeit slowly. It appears the newest demographic for labor in the foodservice industry is none other than Generation Z, current high schoolers, and college students.
This is an interesting generation, already recognizing their value in the American workforce. Which means industries must adapt to their needs. Savvy business owners are recognizing the value in this newest group of employees. Keeping workers happy, satisfied, and motivated means meeting them on their terms in order to create a tenable workforce.
Recruiting the high-tech generation means help wanted signs in the window doesn’t cut it anymore. Operators must reach them in their own space. This is why there’s been an explosion in social media hiring. Lately, large fast-food companies are targeting Gen Z, sometimes referred to as “Zoomers,” through apps like TikTok, Instagram, and Snapchat. With just a click, companies can view short video resumes or applications.
Beyond dangling the carrot, restaurant operators must deliver. Recruiting workers to get them in the door is one issue; retention is another. The most common requirement workers are looking for is flexible scheduling. While they want guaranteed hours, workers put value on quality of life. Once dubbed “work-life balance,” it is now referred to as “work-life integration.”
Restaurant owners are also discovering that to be competitive, they must incentivize with increased pay, which may not be easy for the bottom line but a necessary ingredient to keeping their doors open. In addition to paychecks, young workers also want ample job training. The rapid pace of restaurant hiring has proven challenging, not only to owners and managers but also employees, who were hired so quickly they don’t feel competently trained for the jobs. Add to the mix looming COVID fears, mask mandates, and often cranky customers, and you have a recipe for high stress and additional turnover unless your staff feels prepared to handle the job.
For restaurants, focusing on hiring workers and providing higher pay, better schedules, benefits, and incentives carries a hefty price tag. Those who are willing to make this kind of investment in their staff will want to retain them. The ideal scenario would equate to staff feeling valued by providing a positive culture, job training, and competitive pay, making them productive and happy, which trickles down to a profitable bottom line.
Economically, these changes will shrink profit margins. Mounting debt from 18 months of pandemic pivots, increased supply costs, and now increased labor pay, which is already about a third of overhead, doesn’t paint a profitable picture. These things are necessary through a rebuilding phase, however. Consumers will absorb the costs through decreased menu options and increased prices.
It is working thus far, but recovery is slow. Numbers are showing that there are still challenges ahead. For example, full-service chains took the biggest hit during the pandemic punch, having to completely re-group after dining rooms were closed, adopting a take-out-only model. Franchises and quick serve restaurants are performing better, due to their business models’ capability to adapt to changes more quickly. Overall, according to insights from industry research provided by Black Box, restaurants are seeing positive sales growth.
This proves the value the foodservice industry provides to this country. During the past year and a half, no other industry had to pivot as much as restaurants. Not just to survive but to provide essential services to customers greatly in need of some semblance of normalcy during unprecedented times. The foodservice industry stepped up and delivered. Restaurants will continue transforming to a new normal with a new generation of workers. Adjust, adapt, and pivot, including with a new labor force, is what the industry does best.
Robin Gagnon is the CEO and Co-Founder of We Sell Restaurants, the nation’s largest restaurant brokerage firm and the only national franchise specializing in restaurant sales.