Unable to reimplement pre-COVID-19 operating hours, restaurants must rethink, retool, and revitalize how to attract and retain employees.
In today’s crazy environment in which staff is hard to find and keep, you must embrace change to keep brands alive.
Are you ready for a more flexible workplace environment? Your employees are. This past year has demonstrated all businesses need to think differently about how they service their customers and how they can best retain and attract talent. This is especially true of restaurants that are now forced to try Herculean tactics to get applicants in their doors.
There’s more than coffee brewing in our nation’s restaurants. Demand to eat tableside and barside is plentiful, yet the inability to hire and retain sufficient staff is creating a perfect storm.
Restaurants that made it through temporary closures and decreased revenue the past 15 months—thousands of which laid-off and furloughed staff—can’t attract and/or retain enough workers, many of whom found jobs in other industries or are collecting more in unemployment benefits than they can make working in restaurants.
Some frustrated restaurateurs are hanging the “No one wants to work anymore” sign because their efforts to attract workers are futile. But what’s a restaurant owner or operator to do?
Perhaps it’s time to get creative by offering incentives you might not have previously considered or simply haven’t implemented. But before heading down that route, let’s look at what’s happening in the ultra-competitive restaurant world.
High Turnover—Nothing New
Long before the pandemic, retention issues were the norm for an industry where turnover is notoriously high. During the 2015–2017 period, for instance, the Bureau of Labor Statistics reported that turnover rate for the restaurant sector was 81.9%, but industry estimates reached 150%.
Restaurant staff has long been thought of as expendable and replaceable, although training new staff obviously takes time and costs money. The Center for Hospitality Research at Cornell University estimates the cost of employee turnover averages $5,864 per person for a typical front-line employee. The revolving door has been spinning faster the last few years as restaurant workers look for better pay, conditions, hours, benefits, and treatment. After all, who wants to work until midnight on a Saturday?
This industry relies heavily on teenagers, many of whom are working their first jobs. This demographic is easily swayed to leave their current job to pursue “greener grass” elsewhere. The pay is always better, the tips are higher, and that new, chic bistro? “It’s the bomb!”
And COVID-19 restaurant closures and limited hours have only exacerbated these issues.
What’s Up with This Whole Unemployment Thing?
According to the National Restaurant Association, the eating and drinking industry lost 2.5 million jobs in 2020—20% below pre-pandemic employment levels. And while more restaurant jobs have been steadily opening up since January 2021, many former workers are saying, “no thanks.”
They can sit at home, stay in place, and bring in sufficient income on unemployment. They feel safer staying put than venturing out in public. At restaurants, they come in close contact with other employees and the public, many of whom may not have been vaccinated. Plus, they’re tired of being thought of as so easily replaceable.
Mix that together and add this to the recipe: there are approximately two million fewer 16- to 34-year-olds in the labor force—the most common age group in the restaurant industry. During the pandemic, while some teens went to work to help family finances when parents were laid off, others avoided entering the workplace to eliminate the risk.
If restaurants want to retain current staff, attract employees, and try to rebuild customer loyalty, restaurant executives need to think, do, act, and behave differently.
Incentivize Rather Than Upsize
Before throwing in the proverbial towel, think about processes you can implement and change to reduce turnover, improve retention, and attract much-needed newer staff. For instance, consider the following.
Flexible pay options. Many employees, particularly hourly ones, have limited or no access to traditional banking services. Enable them to tap into their paycheck on demand through earned wage access (EWA) solutions. More than half (60%) of HR executives surveyed reported workers citing financial concerns, leading to stress, which in turn, leads to decreased on-the-job performance. Help potential newbies and current staff get closer to financial wellness through things like EWA—enabling them to access earned wages between paychecks.
Upskilling opportunities. Employees value ongoing career development, often as much as they value competitive pay. Provide a career with your brand and set them up with a mentor who can show them the ropes and offer advice along the way. When you invest in their success and let them know hard work (with your brand) pays off, you’re more likely to keep them around.
Recognizing top dogs. No, this isn’t about, “We need to talk about your flair” (remember Office Space?). Flair not necessary! However, if you lack an employee recognition program, think about starting one to encourage employees and potential ones to reach for the stars. When workers feel as if their contributions matter, turnover reduces dramatically. Including a cash incentive and recognition helps them feel appreciated and much less like an expendable commodity.
Paying competitively. McDonald’s is increasing its wages by an average 10% to try and attract employees. Further, one of its Florida franchises is offering $50 to anyone who simply shows up for an interview. Money talks, so consider ponying up and offering more of it to attract and retain talent.
Doling out referral bonuses. Ask your current employees to help with the staffing situation. Provide referral bonuses to employees for suggesting a friend for an open position. Offer sign-on bonuses for joining their team or a bonus for staying a specific length of time—such as nine months.
Partying hardy. Rather than a same ole, same ole hiring event, copy Taco Bell’s four-year initiative of hosting a hiring party. A la Taco Bell, think about using your patio, parking lot, hiring or inside space to inject some fun into the hiring process. How about offering up samples of customers’ favorite fare or providing an appetizer to nibble on while interviewing candidates? Why not provide some branded bling, such as a beverage koozie or t-shirt to make them feel welcome.
Keep Yourself Alive
So, here’s the deal. Consumers want to dine in at your restaurant(s). Yet, staffers are few and far between. Get creative. Offer things you’ve never offered before. If it seems crazy to elicit an interview with a $50 (or whatever) bonus, it is! Yet, in today’s crazy environment in which staff is hard to find and keep, you must embrace change to keep brands alive. And, to keep those hungry-for-in-person-dining customers coming back for more.
Are you in or are you in? •
Brian Brinkley has over 30 years of experience in enterprise and start-ups. He is a leader in omnichannel commerce and digital payments technology. Brian founded Zave Networks which was acquired by Google in 2011 and became a key component of Google Wallet. Brian has held executive roles at Sprint PCS and Lucent Technologies. Brian joined QRails as CTO in 2019 and was asked to lead QRails growth strategy as CEO in 2021.
This article was first published in QSR Magazine on July 1, 2021.