Restaurant Labor Shortage: Why Are Companies Struggling to Find Workers?
The past few years have been a whirlwind for the restaurant industry. From pandemic shutdowns to a booming recovery, restaurateurs have faced unprecedented challenges. One of the most persistent issues plaguing the industry is the ongoing labor shortage. While there have been signs of improvement, finding and retaining qualified staff remains a top concern for restaurant managers and owners.
This blog will explore the current state of the restaurant labor shortage and offer actionable strategies to help you navigate this challenging environment.
The State of the Restaurant Labor Shortage
While the situation has improved slightly compared to the peak of the shortage, the National Restaurant Association reports that the industry is still playing catch-up. Here's a breakdown of the key data points:
- Employment Levels: The food service workforce currently sits at around 15.6 million, just 0.4% below pre-pandemic levels.
- Turnover Rates: Restaurant turnover rates have decreased from the peak of 2020, settling at around 4.8% per month, which is closer to pre-pandemic norms.
- Job Openings: Despite this improvement, there's still a significant gap between job openings and available workers. The National Restaurant Association estimates a need to hire an additional 200,000 workers in 2024.
The Impact on Restaurants
The labor shortage has a significant ripple effect on restaurants, impacting everything from daily operations to financial health. Reduced staffing levels often lead to operational challenges, forcing restaurants to cut back on hours or menu offerings. This can result in longer wait times and frustrated customers, potentially harming your reputation.
The financial strain is also undeniable. Higher wages, signing bonuses, and increased training costs all eat into profit margins. Additionally, reduced hours or limited menus can lead to a loss of revenue.
Perhaps the most concerning long-term consequence is employee burnout. With fewer staff members shouldering the workload, burnout becomes a real threat. This can lead to a vicious cycle of overworked, unhappy employees leaving for other opportunities, creating even more staffing shortages.
Why Is the Restaurant Industry Still Struggling To Find Workers?
While the pandemic undoubtedly exacerbated the issue, the labor shortage has deeper roots. Let's explore some of the key reasons why restaurants are having trouble attracting and retaining staff:
- Shifting Worker Priorities: The pandemic led many to re-evaluate their work-life balance. Restaurant jobs, which are often characterized by long hours, unpredictable schedules, and demanding environments, may not be as appealing to job seekers as they once were.
- Wage Competition: The overall labor market is tight, with competition for workers across various industries. While restaurant wages have risen ([Source: Restaurant Business Online]), they might not be keeping pace with other sectors, making it harder to attract talent.
- Lack of Benefits: Many restaurant jobs traditionally offer limited or no benefits, such as health insurance, paid time off, and retirement plans. This lack of security can be a significant deterrent for potential employees, especially those seeking long-term career paths.
- Overworked Staff: The fast-paced, demanding nature of restaurant work can lead to burnout and stress. This can contribute to higher turnover rates and make it difficult for restaurants to retain valuable staff.
Strategies To Attract Top Talent in a Competitive Market
Despite the challenges, there are steps you can take to address the labor shortage and build a strong team. Here are some actionable strategies to consider:
- Competitive Wages and Benefits: Regularly review your compensation package to ensure it's competitive within your market. Consider offering benefits such as health insurance, paid time off, or retirement plans to attract and retain talent.
- Flexible Scheduling: Be open to offering flexible scheduling options to accommodate different needs and lifestyles. This could include split shifts, weekend availability options, or opportunities for remote work (in non-service roles).
- Positive Work Environment: Foster a positive work culture that prioritizes employee well-being. This includes implementing clear communication channels, offering opportunities for professional development, and recognizing and rewarding good performance.
- Training and Development: Invest in training and development programs to help your staff hone their skills and advance their careers within your company. This demonstrates your commitment to their growth and can boost employee morale.
- Technology Integration: Leverage technology to streamline operations and reduce workload. This could include online ordering systems, digital scheduling tools, or point-of-sale systems that automate tasks, freeing up your staff to focus on customer service.
Building a Restaurant for the Future: Adapting and Thriving
The restaurant industry is in a state of flux, and the way we approach staffing needs to adapt as well. By acknowledging the reasons behind the labor shortage and implementing strategies to create a more attractive workplace, you can build a resilient team that will propel your restaurant forward. Remember, your employees are the backbone of your business. By prioritizing their needs and well-being, you can foster a thriving work environment that benefits both your staff and your bottom line.
Take the Lead in Building a Stronger Team
Your leadership sets the tone for your entire team. Earning your online Food Manager Certification demonstrates a commitment to excellence that will resonate with potential employees. This valuable credential not only ensures food safety compliance but also showcases your dedication to upholding high standards.
By enrolling in our Food Manager Certification & Training course, you’ll learn how to confidently manage food safety protocols in your restaurant. This will empower you to create a safer work environment for your staff and instill trust in your customers. A strong focus on food safety is a competitive advantage in today's market.
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Part Of The Restaurant Worker Shortage Is Because They're Just…Gone
We actually had a restaurant labor shortage – particularly back-of-house – before the pandemic, due to Trump-era immigration policy.
In 2014, before the clamp-down, undocumented workers made up 9% of the hospitality industry, and documented immigrants made up another 12%. In other words, more than a fifth of the hospitality workforce was already diminished by four years of an immigration squeeze.
In March 2020, borders closed, freezing documented and undocumented immigrant labor at the reduced levels.
In areas with a high cost of living, strict lockdown rules, or both, many industry workers apparently picked up and left town for cheaper pastures – or for areas where lax pandemic restrictions let them put their skills to use. While we don’t have any good numbers, there's a lot of anecdotal support for this contributing to the worker shortage. Managers contact former staff only to learn they now live elsewhere.
And, of course, some workers actually died. A University of California San Francisco (UCSF) study calculated "excess mortality" by job during the pandemic. They found that the industry with the highest number of additional deaths was food and agriculture, which includes restaurant work.
The pandemic caused a whopping 39% increase in death for the entire sector. Back-of-house restaurant workers were especially at risk due to crowded conditions, poor ventilation, and high take-out demand at the height of COVID's spread. Cooks actually had the highest increase of any occupation: 60% more deaths than an average year.
There's a Worker Shortage Because Many Are Still Scared For Their Health
Restaurant workers that avoided infection saw many of their coworkers get hospitalized. Over half of restaurant workers know someone who died of COVID.
They're also likely to have risk factors themselves. One study found that between 49.7% and 61% of essential workers are at increased risk for a severe case, should they catch COVID-19, due to health and lifestyle conditions.
Now masks are optional, indoor dining is on, and these at-risk workers have no way of knowing who is vaccinated. This especially concerns workers in areas with low vaccination rates.
They don't have to worry if they're vaccinated, right? Many restaurant workers aren't fully protected yet. Despite their "essential hero" label, they were excluded them from early eligibility in most places. Those without qualifying conditions only became eligible for their shot in mid-March or even April, and it can take up to 6 weeks to gain full protection.
The restaurant industry's lack of health insurance (or, at best, subsidized plans they can't afford) also became a dealbreaker for workers over the last year. Many who were laid off became eligible for free or affordable health care under ACA, so going back to their old jobs means losing their insurance. Some have experienced that peace of mind for the first time in their lives. Understandably, they don’t want to give it up.
The Restaurant Worker Shortage is Partly Because Many Switched To More Stable Jobs
You know how people are always telling food service workers, "get a better job"?
Some did.
In the past, it wasn't so simple – the churn of not enough money, long hours, and exhausting work made it impossible to think of anything but getting by. Going back to school? With what money? And job interviews are hard to schedule when you can be called to work at any time (and be fired if you say no).
As this year exacerbated all the problems in the industry and brought unworkable instability to the restaurant job market, many took that time (and increased unemployment) to evaluate their options and make a change. Cyclical layoffs made the decision easier and made a worker shortage almost inevitable.
Some were snapped up early on by online retailers for warehouse work, and despite the labor issues in that industry, many found it to be an improvement: regular hours, more benefits, and physical challenges not so different than they're used to.
Undocumented immigrants – ineligible for unemployment – took whatever work they could find if restaurants laid them off. Construction never stopped in many places, so they changed careers
According to a UC Berkeley/One Fair Wage report, 53% of all workers have considered leaving their restaurant job during the pandemic. In a survey by Joblist, their most desired new careers are jobs in offices, retail, warehouse/factory, and healthcare.
Ultimately, Restaurant Worker Shortages Are About Saying No To Terrible Working Conditions
The fact is, the challenges of the pandemic were just the last straw for many employees. They commonly report that multiple layoffs and extended unemployment made them realize how exploitative their jobs have always been.
For older restaurant workers with a decade or more in the industry, being out of the grind made them aware of how unsustainable their jobs are as they age.
Even under the best circumstances, the work itself is physically, mentally, and emotionally demanding – and the best circumstances don't exist in most restaurants. From the workers' perspective, the restaurant labor shortage is actually a wage and basic respect shortage.
Labor violations are common, including no time to eat or take a break. They usually go unpunished, because workers can't afford to refuse shifts, speak up for their rights, or even take sick time. Missing a shift might mean no groceries that week. Requesting a day off can get you fired, even if you're clearly ill. For undocumented workers, there's the threat of calling ICE.
And then there's the way workers are treated – regularly berated by supervisors and customers, often for circumstances beyond their control.
The pay leaves most workers struggling to meet their basic needs. Sure, some make a killing off of tips, but most don't. Since 1991, the federal minimum wage for restaurant servers and tipped employees has been $2.13 an hour. Theoretically, tips should make up for that but often don't.
On top of all that, wage theft is rampant, including tactics like requiring unpaid work, ignoring overtime and failing to meet minimum wage requirements, shaving hours, skimming tips, and other tricks.
According to an Economic Policy Institute report, the Department of Labor investigated 9,000 restaurants over two years as part of a compliance sweep. They found that 83.8% of these restaurants committed wage and hour violations…to the tune of $56.8 million in back pay for 82,000 workers.
Honestly, who would want to go back to that?
It's Time for Industry-Wide Change in Food Service
Restaurants that offer rarities like a living wage, benefits, or respectful working conditions report they've having no problem finding labor.
Instead of blaming unemployment or laziness, we should take this "labor shortage" as a wake-up call to the industry. Right now, employers are drawing people in with higher wages, signing bonuses, unheard-of benefits, and other incentives out of desperation. That's great, but these changes can't dry up when the worker shortage does.
We need a permanent change in the workplace culture for food service. Restaurant workers deserve a living wage, humane work conditions, and the courtesy of respect in exchange for making the dining experience possible.
