At a time when restaurant operators are scrambling to find staff like never before – and perhaps lowering standards to do so – Chipotle managed to attract nearly 24,000 applicants through an online job fair recently. This occurred a week after the brand announced it was raising its minimum wage to $15 per hour. It’s no coincidence: Restaurant workers are demanding greater financial stability. While not every restaurant has the resources to raise hourly wages, it’s still a good time to scrutinize labor expenses and address weak points. Even before the pandemic, the turnover rate in the hospitality sector was higher than the turnover rate in nearly all other sectors. According to The Restaurant Technology Guys even an $8-per-hour employee can end up costing a company around $3500 in direct and indirect turnover costs. The more you invest in recruiting and retention up front can minimize your costs in recovering after an employee leaves. Even if you’re unable to raise wages, taking steps to prevent payment inaccuracies and ensure employees can access their wages and tips right away can boost morale and retention. Restaurant Dive report says, 31 percent of financially insecure workers have quit a job because of a lack of financial wellness. On the flip side, more financially stable employees (87 percent) are likely to remain in their job in the next year, as opposed to workers who are financially unstable (58 percent). Every little thing you can do to promote financial stability can help you keep the people you hire.
At a time when labor challenges are at an all-time high in the restaurant industry, a number of brands are taking a look at the experience of restaurant work and improving the aspects that need help. One of the areas moving to the forefront right now is employees’ mental health, which has been hit hard during the pandemic. Historically, the restaurant industry has not been known for its focus on employees’ mental health needs – and to be sure, mental health has been a growing concern for employers across industries during the pandemic – but now a number of restaurant brands are trying to change that as a means of attracting and retaining staff. Last fall, Noodles & Company added free in-person and online counseling sessions to its benefits plan. In May, Chipotle, which already offers in-person, phone or virtual visits with a licensed counselor for employees and their families, announced it was also bolstering its support of mental health via a new virtual platform called Strive. A Restaurant Business report says the Strive platform provides one-on-one coaching and support, and according to Chipotle, “gamifies each employee’s wellness experience” by giving them an opportunity to win gift cards and save money on health insurance, among other benefits. While such benefits aren’t widespread across the industry, they may gain momentum as restaurants vie for staff and need to think of creative ways to enhance the working environment for employees. Further, mental health benefits aren’t the only ways restaurants can improve upon a culture that needs a boost. As this Restaurant Dive report indicates, restaurants that have simply communicated clearly and considered employees’ home situations and financial concerns throughout the pandemic have had an easier time retaining people.
Even before the pandemic, labor recruitment and retention was a major challenge for restaurant operators. Now that we’re in a position where business is suddenly ramping back up and all restaurants are looking for staff at once, that challenge has ballooned. It’s causing operators to create new talent pipelines, rethink roles and find ways to automate more tasks. Along those lines, the fast-casual chicken chain PDQ is expanding upon its relationship with Best Buddies International, a nonprofit organization that seeks to create opportunities for people with intellectual and developmental disabilities. Nation’s Restaurant News reports that the chain has set a goal of hiring at least one person from the organization to each of its 45 locations in Florida. Wage increases aren’t feasible for all restaurants, but some brands are trying that too, in addition to taking steps to recast restaurant jobs as careers: Chipotle, for one, is raising its hourly wage to $15 and also creating a new career path for aspiring restaurateurs that allows managers to earn salaries of $100,000 in as little as three and a half years. Finally, operators are assessing ways to speed up or automate tasks so they are less reliant on labor fluctuations. Robin Gagnon, co-founder of We Sell Restaurants, told Modern Restaurant Management that robotics are being tested at every position at a restaurant, ranging from cooks to table service, and that we’ll see more ordering via app and kiosk now that consumers have grown accustomed to it. In the kitchen, Gagnon predicts that more concepts will look to get food out more efficiently by preparing items in advance and assembling them rather than offering full service.
As restaurants reopen again in a big way, they are facing yet another unprecedented challenge, though one that probably would have been welcome last spring: having to hire new staff to handle a steep rise in business at the same time as all of the other restaurants in the area. Not only are restaurants having to make themselves appealing to customers beginning to venture out again right now, but they are also having to put their best foot forward for potential foodservice employees who can have their pick of employers. As a recent New York Times report suggests, at a time when an extra dollar or two could mean the difference between attracting an employee and not, it’s important to understand what your competitors are paying. Is there room for you to partner with other restaurants in your area to exchange ideas, share staff or pool resources that could drive interest in your businesses? Consider paying referral bonuses to existing employees who recommend another staff member once that person has been on your team for a set period of time. Take another look at your needs – could you hire someone inexperienced but eager and train them instead of holding out for a more experienced person who meets a longer list of criteria? Also assess the benefits (financial and non) that you’re able to offer, from meals to career development opportunities to loyalty bonuses for employees who stick with you for a while.
You may have decided by now that you don’t need to hire new hosts or waitstaff as you prepare your restaurant for post-pandemic service – but what about staff whose expertise is in technology? A recent report from Hospitality Tech references the southeastern U.S. restaurant brand Sonny’s BBQ, which relies on the skills of two full-time, highly skilled data analysts. These analysts synthesize industry data, sales and profits, marketing statistics and other data to develop and fine-tune strategies for data analytics, customer relationship management and personalized guest experiences. Strengthening your business and brand in these difficult times is about harnessing information – about elements ranging from your market and customers to each item and promotion on your menu. That may require you to rethink how you manage your business and what expertise you need most. Doing so can help prepare your business for future bumps – and bring some needed predictability to your business in 2021.
Even restaurant operators with the best of intentions struggle when it comes to building and maintaining a healthy, supportive employee culture. Will COVID-19 change that? While it may seem like an impossible time for restaurants to invest in better pay and benefits for staff, some believe the current climate will create a bigger opportunity for operators who already have the building blocks of a strong team culture in place – and create yet another obstacle for those who don’t. For instance, restaurants with a strong existing employee culture have not had difficulty rehiring staff – even at a time when many workers are not seeing the benefit of coming off of unemployment. In a Forbes report, owner of the Cincinnati restaurant MashedRoots said, “I think it has become apparent that the way the industry is structured does not create healthy, stable work environments that are able to absorb disruptions and quickly adapt to changes.” As a result, he is changing the way he runs his business and develops staff. Has the pandemic brought to light any aspects of your restaurant culture that, with some adjustments, could fortify your business to survive challenges in the long term?
Longtime restaurant workers learn a wide range of hard and soft skills that can apply widely within the foodservice industry and outside of it – from team leadership to supply chain oversight to customer care. A new AI-based service called Talent Exchange is helping workers impacted by COVID-19 to quickly find jobs that align with their skillset. Backed by McKinsey & Company, the company counts Starbucks, Mondelez International and Pizza Hut among its participating companies. It may be worth considering if you’re an operator helping a longtime team member find a temporary job or if you’re scaling your staff back up. Restaurant Business reports that companies can upload a list of information about their furloughed or laid-off employees, then AI can suggest candidates to hiring businesses based on how well they are likely to match a role. Managers can also keep track of where furloughed employees landed so they can reconnect with them down the line.
The need for many U.S. states to revert to tightening safety procedures due to rising COVID-19 infection rates has added yet another challenge to the list of obstacles restaurant operators are managing right now: How to manage fluctuating labor needs. At a time when many operators were rehiring – both to meet consumer demand and the requirements of the Paycheck Protection Program – the closure of dining rooms and renewed consumer wariness about the safety of eating out have made it necessary for operators to pull back on hiring once again. It raises the question of how restaurant operators and the industry overall can hang on to their top talent. Your practices around employee engagement and development can help you differentiate yourself. Focus on relationships. The co-owners of the a Baltimore based restaurant group told Restaurant Dive that during the temporary closure of 14 of its 15 restaurants, they called their hourly workers every week to check in, raised money (and matched it) for gift cards for those employees, and held weekly grocery giveaways for workers. Another operator assisted with employee transport via Lyft and also increased wages to demonstrate a willingness to invest in employees in not only good times but also in difficult times too. Of course, providing financial rewards isn’t possible for everyone right now, so finding ways to make the work meaningful continues to be important. In a recent Eater report, a Miami restaurant manager said she is trying to take her current service model – which is basically that of a food fulfillment center that bags food and sends it out the door – and make it a meaningful one for employees who are used to making the in-restaurant experience memorable for guests. How can you make your current restaurant experience a meaningful one for your team?
In 2019, the annual employee turnover rate in the restaurant industry reached 75 percent – an all-time high. Labor challenges – whether in finding and hiring talent, providing training, allocating resources to pay and reward staff, or some combination of the above – are a key concern for the vast majority of restaurant operators. COVID-19 has added yet another wrinkle to those challenges. If labor is a challenge for you, you might learn something from Susan Reilly-Salgado, a former doctoral student who, more than 20 years ago, wanted to write her dissertation on the successful hospitality culture that restaurateur Danny Meyer had developed. She approached Meyer, agreed to work in his restaurant for six months, and then partnered with him to create the Hospitality Quotient (HQ) – a set of six soft skills they thought a high-performing employee in Meyer’s restaurants should possess. These skills – curiosity, empathy, integrity, kindness, self-awareness and work ethic – comprise just over half of the skills an employee should possess to do their job well, they believed, with the remaining skills being the technical skills needed to do a specific job. Even if your restaurant offers very different food or serves a different clientele, these qualities should translate. An empathetic employee will make an effort to ensure a guest with a severe food allergy receives the correct dish – and will be mindful of their safety as we emerge from the pandemic. A curious employee will take an interest in learning new skills on the job and will likely spark the kinds of new ideas you need to operate successfully in the current environment. As you look to bring employees back on board or even hire new staff, consider it an opportunity to elevate your service. When you screen applicants, what questions can you ask that will bring HQ qualities to the surface – or demonstrate that a person lacks those qualities?
Amid the rise of restaurant technology, many restaurant industry leaders have held that while robots and other technology would progressively be used to handle repetitive tasks once completed by employees, the employment landscape would also change, not just eliminating jobs but creating new roles that require human skills and allow people to build longer-term careers in the industry. This could be the year when that shift becomes more visible. In a QSR Magazine article predicting 2020 trends, GJ Hart, the CEO of Torchy’s Tacos, predicts this year will bring increased efforts by operators to attract and retain talent, such as providing educational benefits and other programs that help employees climb the corporate ladder. Torchy’s, for one, has a managing partners program that allows restaurant managers to operate their own locations. Taco Bell is also raising the bar when it comes to employee incentives. A recent Bloomberg article reports that the brand will be testing a higher salary – $100,000 – for restaurant managers in select U.S. restaurants in the midwest and northeast. (Current salaries for general managers at company-owned stores fall between $50,000 and $80,000, the report says.) While other brands may not be able to afford to transition to this kind of model, brands that are making such changes stand to alter the competitive landscape when it comes to hiring – and perhaps shift the kind of worker restaurants are able to attract. This year, what actions can you take – large or small – to make your business attractive as a long-term career prospect for the people you hire?