Recent numbers suggest restaurant hiring trends have normalized a bit at this turn in the post-2020 journey. The restaurant and bar field, in October, added 3,700 jobs at an unemployment rate of 3.7 percent, according to the Bureau of Labor Statistics. While a massive downturn from September, when 39,000 jobs were added (a figure that was significantly scaled back from preliminary reports of 70,000), it does reflect seasonality trends more aligned with schedules than past years, when consumers weren’t following traditional patterns. Essentially, restaurants are settling, staffing, and getting set for a holiday rush, with potentially more hires ahead.
From a higher level, the industry is still above its pre-COVID peaks of 12.3 million jobs in February 2020 by nearly 118,000. Full service remains about 4 percent (234,000 jobs) below, while quick service was 3 percent (156,000) higher from where it was. Given the cafeterias/grills buffets/buffets segment alone reported down 33 percent from 2020 indicates some of this owes to closures on one side (full service) and growth on the other (quick service).
But as we’ve covered in the past, elevated job data doesn’t necessarily mean it’s business as usual. The “Great Resignation” and reality restaurants today are often hiring from a labor pool that came into working age during COVID or in the aftermath, has led to a different set of expectations. 7shifts surveyed 973 restaurant managers on compensation, technology use, retention tactics, and more to once again get a sense of how labor is shaping up as the calendar turns to 2025.
The background-setter is the labor pool, like always in this sector, feels tight as industries continue to compete for talent amid rising wages. So many employees who once gravitated toward restaurants are finding other options at the entry point. 7shifts said, despite the economy’s growth, restaurants still struggle to attract workers who view the opportunity as a viable long-term option. Election-year turmoil didn’t help, either. When asked to describe the current state of the restaurant labor market in their area, 65 percent of respondents noted it was “tight” or “very tight.” Just 28 percent called it “balanced” and 7 percent “easy.”
You see this in the bifurcation of job growth—it’s been driven mostly by segments that typically employ fewer people (quick-serves).
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In the survey, 30 percent cited recruiting as their top challenge, while 27 percent pointed to retention. Nearly 40 percent (39) said the quality of applicants was better than previous years; 38 percent said it hasn’t changed much, year-over-year.
What strategies have you deployed to improve retention this year?
- Flexible scheduling: 70 percent
- Increased wages: 53 percent
- Employee recognition programs: 36 percent
- Career development opportunities: 26 percent
- Improved benefits: 21 percent
- Changes to tip distribution: 17 percent
- None: 8 percent
- Other: 1 percent
As shared in the survey, from Danielle Hester, director of team member experience at fast casual gusto!: “We revamped our hiring process by training managers and producing resource guides to help them interview and hire better. We’re not a typical organization; we prioritize our values, pushing core tenets down to the shop level. We’ve started measuring employee development and performance based on those values. Since we began aligning our operations with our company values, I’ve noticed a positive impact on turnover rates.” Read more about the 14-unit brand’s culture-driven growth here.
There’s ample whitespace to meet changing demands. Per the data, 69 percent of respondents said their restaurants don’t offer benefits like childcare or mental health support.
Pay wise, there’s little doubt operators are forking up more. The median base wage year-over-year is up to $14.20 per hour from $13.64, or 4 percent. Median total comp climbed to $18.16 per hour from $17.45.
What is the average wage increase (if any) that you’ve implemented for hourly employees in 2024?
- No increase: 20 percent
- 1–2 percent: 41 percent
- 3–5 percent: 32 percent
- 6 percent or more: 7 percent
Hester added gusto! changed its pay scale to offer better benefits and now provides a 401(k) plan and better medical insurance in an effort to retain employees.
Naturally, the wage discussion varies by region.
According to Square’s Payroll Index, Seattle-Tacoma-Bellevue, Washington, rose 3.5 percent to $25.35 on the average hourly earnings median. San Francisco-Oakland-Berkely, California, lifted 1.98 percent to $25.34. Portland-Vancouver, Hillsboro, Oregon/Washington, hiked 3.49 percent to $23.02. San Jose-Sunnyvale-Santa Clara, California increased 2 percent to $22.30. San Diego-Chula Vista-Carlsbad, California, upped 3.75 percent to $22.15.
Those were the top metros. Here’s the other side of the spectrum.
- Charlotte-Concord-Gastonia, Carolinas: 5.22 percent increase to $15
- Houston-The Woodlands-Sugar Land, Texas: 2.8 percent bump to $15
- Cincinnati, Ohio-Kentucky-Indiana: 7.37 percent higher to $15.27
- Dallas-Fort Worth-Arlington, Texas: 1.49 percent lift to $15.28
- San Antonio-New Braunfels, Texas: 1.74 percent rise to $15.50
“The bottom line is that restaurant workers take home more than they did in 2023,” 7shifts said. “This also makes it more challenging for operators dealing with rising costs everywhere, cutting into already thin profit margins. Seventy-three percent of those surveyed say increased wages have impacted their bottom line this past year.”
The company’s survey also found tipping practices haven’t adjusted all that much of late. Sixty-three percent of restaurants reported no adjustment in their tipping models. This could reflect the industry’s reluctance to move away from tipping, 7shifts noted, given it still serves as a vital source of income for many workers, particularly in regions where base wages are lower (and the tip credit remains in play).
However, some operators did report experimenting with alternative compensation models, including service charges or higher menu prices to offset the elimination of tips (often in areas where the tip credit vanished). While these models are gaining some traction, widespread adoption has not quite arrived.
What’s also worth bringing into the conversation is how tipping in quick service has further blurred the price tiers across segments. That, too, is an evolution in progress but one that’s grayed the proposition in categories like fast casual and casual dining. It’s helped full-service brands strengthen value as quick-serves work to balance their barbells to provide options for value seekers as well as higher-income diners willing to spend more.
“It’s a fluid issue that incites opinions from diners and servers alike. Change may be on the horizon, as the incoming Trump Administration has promised to end taxes on tips for service workers,” 7shifts said of tipping overall. “State governments have joined in as well, with junk fee bans leaving some restaurants unsure if service charges will be allowed to continue.”
Although murky, what is clear is employees are more in tune today to how money gets to them and what’s available job to job.
Here’s a look at some 2025 hiring trends from experts in the report:
Closer to Home
Jana Domanico, HR operations at BOKA Restaurant Group:
“From onboarding hourly employees this year, I have noticed that more and more employees are trying to eliminate their commute and work closer to home. It used to be that employees looked for the busiest restaurants in the trendiest neighborhoods, but maybe that is shifting slightly. Employees prioritize their time and try to save money on parking/transit. It seems positive for locals with higher-level service backgrounds to work in their communities with knowledge and love for the area.”
A Big Reset
Alice Cheng, founder and CEO of Culinary Agents. Read more on Alice’s story in this article.
“Overall, this year has been many businesses’ reset, planning, and growth year. For the most part, we saw [and continue to see] businesses get more efficient with the tools they’re using and streamlining operations. Businesses using tools they invested into their full capability are having the most success.”
Pulse Check
Hester of gusto!:
“If we see that people are leaving around the six-month mark, we’d implement 120-day surveys to get a pulse on how they’re feeling and to take a more data-driven approach to retention.”
7shifts’ survey also asked operators how they’re deploying tech to manage challenges.
What tech restaurants adopted in 2024 to assist in team management
- Scheduling software: 27 percent
- Payroll/HR software: 33 percent
- Tip management software: 12 percent
- Task management software: 16 percent
- Performance management tools: 21 percent
- Training platforms: 29 percent
- None: 32 percent
- Other: 1 percent
In sum, 65 percent of restaurants reported leveraging some form of tech to improve efficiency and tackle the labor challenge. A quarter said they use HR software to track employee performance and nearly half (48 percent) noted using cloud-based software for shift scheduling. Regarding team communication, 48 percent of operators said they use messaging apps for essential updates; 22 percent deploy dedicated scheduling or HR software.
There’s plenty of space to evolve. Twenty-seven percent of respondents said they still schedule on paper or whiteboards and 23 percent rely on Excel or Google Sheets. Sixty-four percent added they track tasks manually via paper or a spreadsheet, making it more difficult to keep teams accountable. “Those who invest in these technologies stand to improve their operational efficiency and ability to retain top talent in an increasingly competitive market,” 7shifts said.
