Now, there are 22 states are saying it is time to get back to work and want to end federal unemployment benefits by June or July instead of waiting until the fall. The impetus is that with vaccine numbers increasing and the CDC easing COVID-19 restrictions, Americans are getting back out there, trying to resume a pre-pandemic lifestyle. If businesses like restaurants don’t have the labor force in place to resume business as usual, the supply-demand theory will be off-kilter again, which affects that cash register.
So, what’s the solution? Right now, the average restaurant is between 25–40 percent understaffed. That’s not a good formula for customer service and satisfaction. But restaurants are resilient and strategic. There is great innovative thinking out there. Ideas encouraging workers to come back include increasing pay. Money talks, and no one is paying minimum wage. Savvy workers are seeing this as an opportunity to be heard and keep the increased pay as a standard. According to an ABC News report, groups are asking for a federal minimum wage increase to $15 an hour. Labor reports show that in March, the demand for workers pushed the hourly wage to just over $16 an hour.
Another option is that some restaurants are offering signing bonuses and referral payments, concepts typically used by larger corporations in order to attract workers. Some are paying a stipend of as much as $50 to simply complete an application, much less accept a job. Others are cashing employees out and paying them at the end of each shift rather than having them wait for their regularly scheduled payday. Those restaurants doing it right are also utilizing social media as essentially an electronic “help wanted” sign. They are using technology to hire and digital advertising to attract workers. The world has changed, and the pivots continue. Brands that are historically doing things as they always did, or pre-pandemic, will not survive. A single online ad or putting applications and a sign near the door will not cut it today. Restaurants are going to have to give employees a reason to join the team, raise the wage overall, and provide incentives for working with the brand.
The bottom line is the overall solution is to remove the incentive to make more money staying home than going to work. The government intervention has essentially stirred the pot by artificially inflating unemployment benefits and inadvertently creating this crisis.
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.