The hospitality industry is extremely fast-paced, and restaurants must face persistent challenges with a strong determination, will, and competitive advantage.
The average lifespan of a restaurant is short-lived, with a vast majority of new venues closing their doors within their first year of operations. Of those who remain, there is a 70 percent chance that they will close within the next three to five years.
These statistics have always lingered in the industry, discouraging potential restaurant owners from chasing their dreams. The good news is that there is a high probability that a restaurant will remain in business after its first five years of operations—it just has to survive until then. And luckily, there is an all-inclusive answer to the high turnover that created these statistics in the first place: the gig economy.
This post will explore the power of the gig economy and how it can help the quick-service industry survive and thrive.
The Gig Economy: Redefining Workforce Flexibility
Freelancers are becoming more prevalent in society. Now, those with a highly demanded skill do not have to tie themselves down to just one opportunity. With the growth of the gig economy in the hospitality industry, gig work has synchronized with the traditional job market, offering a specialized workforce without the need for onboarding or on-site training.
Historically, following a traditional staffing model in hospitality has been an ineffective practice, as the industry has consistently championed exceedingly high turnover rates, leading to tens of thousands of dollars lost each month in turnover costs. Now, there is a solution that will save restaurants from burning through their bottom line and, instead, allow them to keep their doors open.
The gig economy empowers individuals to offer their skills and experience in the form of “gigs,” in addition to their regular employment, all at their leisure. This increases operational efficiency and lowers turnover costs for the venues where the gigs take place, creating a mutually beneficial situation for both sides.
The Power of Gig Workers in High-Volume Shifts
Gig work is essential for restaurants to get the help they need, when they need it most, without having to catch someone up to speed. Here are the powerful benefits of contracting gig workers during peak hours and busy seasons:
Flexibility and On-Demand Access
Scheduling high-volume shifts involves long lead times and fixed commitments from regular employees, which can cause problems. Regularly scheduled 40-hour work weeks are unheard of in the hospitality industry, and a large percentage of shifts end up being assigned at the last minute.
Since the gig economy offers staffing assistance on demand, restaurants can remain flexible and prepared, having gained access to a talented pool of candidates who are available on short notice. This is especially beneficial if they find themselves needing to staff an impromptu BEO, an overbooked Saturday night, or even a simple call-out.
Replacing Subpar Team Members
Due to labor shortages, restaurant managers and owners may feel like they don't have much control over who gets to be on their team. Some employees may be underperforming, yet managers usually hesitate to let them go, facing concerns about being understaffed without them.
The gig economy is a proactive approach that not only brings in specialized help but allows restaurants to replace subpar staff altogether.
Reducing Turnover Costs
The Center for Hospitality Research estimates that the cost of turnover per employee is well over $5,000, with the majority of the cost being productivity loss. Of course, this can be much higher if restaurants are consistently unable to find quality team members, creating a vicious cycle of training and turnover.
Embracing gig workers significantly cuts turnover costs, especially in times of vacancy. These costs theoretically could be nullified altogether if managers had enough time to search for candidates without feeling pressured to accept the first person who applied for the role.
Managers can now spend their time ensuring that their new hires are of a higher caliber, reducing turnover and positively impacting service in the long term.
Eliminating Instances of Low Productivity
In this industry, productivity can suffer for various reasons. For example, an unspecialized workforce may have low productivity not due to skill issues but because of a lack of motivation. Gig workers can inspire the workforce and unify the team of in-house employees by bringing passion for the industry back into the workplace.
Keeping a full staff on hand also brings down productivity. Underutilized resources can become apparent during slower periods, as they clearly reveal who is (and isn’t) pulling their weight on the team. By keeping the workforce flexible and on-demand, managers can eliminate and/or allocate resources as needed.
Preventing Existing Employees from Feeling Overworked
In most successful restaurants, there usually are a handful of team members who excel at their job and display loyalty to the brand. Keeping the workforce lean and relying heavily on these employees may temporarily be great for revenue, but it eventually causes burnout and stress, leading to resentment and turnover over time.
It is well-known that internal employee satisfaction is highly correlated with profits. The gig economy enables top performers to rest and take time off, and it helps increase overall job satisfaction, morale, and recognition during peak hours.
Embracing the Gig Economy for Sustainable Growth
The gig economy has propelled the hospitality industry to be even more dynamic, and it has also enabled new strategies for driving restaurant growth. By ensuring that all of their high-volume shifts remain covered without exhausting their in-house staff, managers can maintain optimal service levels and unlock their full potential through both employee and guest satisfaction.
The agility offered by an on-demand workforce helps restaurants in the quick-service industry adapt to changing business demands seamlessly by providing a cost-effective solution to high turnover costs, staffing fluctuations, extended hours, and employee burnout.
With specialized gig platforms, restaurants can adopt sustainable growth and a competitive edge in an evolving industry.
Starr Douglas, the visionary CEO and Founder of FrontHouz, offers an innovative solution for front-of-house restaurant staffing. With experience across multiple front-of-house roles, her industry insights inspired the creation of FrontHouz, revolutionizing the hospitality sector and boosting venue efficiency.