After 18 months of only modest improvement, the restaurant industry’s labor shortage has become a familiar burden. Employment levels and wages have inched upward, but a gulf remains between current staffing levels and pre-pandemic labor availability – stoking operator anxiety.
In June, foodservice added about 41,000 jobs. But restaurant industry employment still lags some 728,000 jobs behind its pre-pandemic high, or about 6% of the February 2020 foodservice workforce, according to the Bureau of Labor Statistics. In May, wages in foodservice edged up about 1%, keeping pace with the consumer price index.
At this year’s National Restaurant Association Show in Chicago, Restaurant Dive spoke to operators, executives and specialists about strategies restaurants can use to succeed in a tight labor market. Throughout these discussions, four key areas of focus emerged: recruitment, retention, operational efficiency and employee communication.
Recruitment efforts don’t need to be limited to corporate marketing campaigns, Jill Waite, Portillo’s chief human resource officer, suggests. Restaurant employees can be effective recruiters if they’re happy with their jobs, Waite said during an NRA panel.
“Thirty percent of our team members that work for Portillo’s came because they either wanted to work with a friend or a family member. So they're a great brand ambassador for you,” Waite said. Referral bonuses and other incentives can help enlist current employees in the recruitment process.
Jordan Ekers, COO at Nudge, an employee communications and training platform, said clients of his are interested in recruiting through employees’ personal networks.
“We rolled out a recruitment module. So I can nudge frontline staff to encourage individuals in their network to apply for a job at that brand,” Ekers said.
Transparency about DEI initiatives offered at a company can also draw applicants, Sue Petersen, executive vice president of inclusion, diversity and people at Noodles & Company, said.
“We have people who come to us and specifically apply because of what they see us doing in this space,” Petersen said during an interview at the NRA Show. “Whether it's because they were in the restaurant and [saw] team members with the pronoun pins, or, you know, they see us celebrating the different heritage months.”
Waite also said Portillo’s will rehire past employees who left the company in good standing, as they require less training and are already familiar with the brand’s operations. Sharing individual workers’ stories through company channels can also generate applications, Waite said, as many prospective employees are more interested in learning what a shift at a brand looks like rather than hearing a pitch from HR or executives.
Once applicants have turned in their applications, employers can incentivize applicants to show up for interviews by dangling a sample of the restaurants’ fare, Patrick Yearout, director of innovation at Ivar’s Restaurants, said at the same panel as Waite.
“Instead of inviting them in for an interview, we invite them in for a conversation and a meal. So we definitely bribe them with free food,” Yearout said.
Keeping employees after they’ve been hired is another challenge, as turnover in the industry has eroded many staffing gains, with about 5.7% of workers leaving their jobs in foodservice in May.
One key tool that can aid in both recruitment and retention, Petersen said, is aligning benefits with demographics.
“We've started tracking or trending our benefits to [see usage by] the segments that we feel are targeted by that benefit, and then we look for gaps,” Petersen said.
Noodles immigration reimbursement plan, for example, filled a gap in benefits for immigrant workers. Sometimes, Petersen said, tracking benefits reveals programs with little usage, such as its backup childcare for employees. The program was only used by two employees in a whole year, Petersen said.
Compensation and employee recognition are two drivers of retention, Ekers said. Responsiveness to employee feedback is another major driver of retention, as it makes employees feel valued.
Finding ways to boost revenue and ensure staff have meaningful work can help maintain staffing levels, Rishi Nigam, founder and CEO of host kitchen platform Franklin Junction, said.
“Everybody wants to make more money, I don't think restaurant employees are afraid of working,” Nigam said. “But when you make them do stuff that doesn't produce results, then you cost yourself a lot of goodwill. So you're making people work extra, but you're not earning the revenue to pay them better.”
To that end, adding new revenue streams or improving the profitability of operations can help improve morale, Nigam said.
One way to improve profitability is to find new efficiencies, freeing up labor for other tasks in the restaurant.
While robots are an obvious example of a labor-saving solution, little changes like QR code menus, which make it easier for customers to order and pay, can also help take pressure off staff.
“QR code menus, that don’t just display the menu, but actually allow the diner to place an order and process their payment seamlessly, takes a lot of the burden, from a staffing perspective, off of the restaurant,” Brian Cotlove, chief business officer at restaurant tech company BentoBox, said.
Answering calls, for example, can be a major pain point for restaurants that take orders or reservations by phone, said Brendan Sweeney, CEO of Popmenu, a company that offers a phone-answering automation tool. By ensuring customers always get an answer from the phone system, even if it’s just a text message with a link to a direct ordering platform, small front-of-house automations can draw customers in and free up workers elsewhere, Sweeney said.
“It's always just a series of these small inefficiencies and small opportunities to gain revenue and gain margin. Every single phone call is a transactional opportunity,” Sweeney said.
Sometimes efficiency can come from unit design, especially in the QSR segment, Frank Inoa, Inspire Brands’ vice president of design and engineering innovation, said during a panel conversation. Inspire has created modular designs for drive-thru only units, which saves construction time and eliminates the need for some front-of-house labor, allowing workers to focus exclusively on off-premise orders. Dunkin’, one of Inspire’s chains, opened a digital-only store last summer that has a similar staffing level to traditional units, using workers who would otherwise focus on the front-of-house to prepare food.
Shaun Jackson, executive director of risk management at Panda Restaurant Group, echoed Inspire’s emphasis on nontraditional units driving efficiencies.
“We've never seen the kind of efficiency numbers that we get out of a [ghost kitchen] out of a standalone,” Jackson said. “When you eliminate the dining room, and you really have just third-party orders, it's a phenomenal model for sustainability. And that's one of the drivers of ghost kitchens.”
Marginal efficiencies, recruiting through employees’ social networks and targeting benefits to specific populations can all help restaurants save on labor costs and reduce turnover. But a major factor in retention, at least according to Ekers, is how restaurants communicate with workers.
Employee communication is second only to pay as a driver of employee longevity, Ekers said. Many restaurants think they communicate effectively, but a sizable gulf exists between management and employee perceptions perceptions, Ekers said.
“A fraction of the employees believe that they get effective communication that helps them better perform. A fraction of employees believe that they're being asked for feedback,” Ekers said.
For Peterson, consistency is one cornerstone of good employee communication. Workers should know what to expect out of a shift regardless of which managers are on duty. Personal relationships also impact whether employees listen to, and are heard by, management.
“Don't just sit down and learn about what shifts are available and what [candidates’] prior work is. Get to know the individual. Learn one or two things about them personally, what was important to them, and then carry that through,” Petersen suggested.
Ekers, whose company makes an employee communication platform, also said a personal touch matters, even if it's from a digital tool.
“The more targeted information is to a particular individual and their role and their skill set, the more impactful it's going to be to drive a behavior,” Ekers said. Digital tools are more effective than bulletin boards, and more consistent than verbal briefings, Ekers said.
Even with all these strategies in place, the overall labor market is still tight, Nigam said.
“There's always a labor issue of some sort or another. I think that what's always important is having that contact with your ground team, and knowing what's going to make their lives easier and better,” Nigam said.