How to Survive Restaurant Industry Labor Shortage?

Is your restaurant business struggling to survive the restaurant industry labor shortage? Then, you are not the only one who is facing issues in hiring and filling vacancies admist the restaurant industry labor shortage. Around 30% of the restaurant staff is at risk of leaving the industry in the next two years, according to a report.  

However, there are many valid reasons why people are forced to leave the industry, and applicants are not ready to apply for the vacancies. For instance, the average pay of a worker in the food industry is just $10/hour. Most of the jobs in the restaurant industry are low-paying, and in this high-rising economy, these low-paying jobs that have no bright future have no chance of being completely fulfilled.

Another important reason for the labor shortage is that employee staff do not receive proper benefits, such as health insurance, sick leave, and other benefits. The reasons are many; however, we need to focus on how to overcome the shortage.

There is a solution for every problem, but to find the solution, it is essential to know the root cause. This blog discusses all the main reasons for the labor shortage in the restaurant industry and solutions to hire new employees and retain them. One effective approach is leveraging Restaurant Management Software, which can streamline employee scheduling, task management, and performance tracking to improve workforce efficiency and retention.

How To Retain Your Employees?

While hiring a suitable candidate is challenging, it is more challenging to retain your existing employees. Workplace productivity is directly linked to employees’ happiness, and no one will want to leave your restaurant if they are happy.

However, on the other hand, your workforce is not satisfied or burnt out if your restaurant is not performing well. So, here are some tips to keep your employees happy and reduce employee turnover rates.

1. Recognize your staff and value their efforts. Implement a system where you award an employee of the month to a staff member for excellent performance. This will inspire other employees to work harder and perform their best.
2. Increase the compensation to ensure that your staff gets for they are valued for. Celebrate their birthdays and work anniversaries so the employees feel they are valued.
3. Allow the employees to speak their minds and share their thoughts with the senior management. Most employees hesitate to speak their thoughts due to the fear of retribution, so foster a safe workplace environment where no one hesitates to voice their feelings freely.
4. Use software and other engagement tools to track employee performance and set up meetings with those whose performance has been downgraded. Understand their problems and find solutions to boost productivity.
5. Stay away from micromanaging because it hampers productivity and turns off high-performing employees to stick around.
6. As a manager, you are likely to keep your best employees performing the same duties. However, this can become monotonous and encourage the employee to switch jobs for better responsibilities. Hence, invest in them and offer better opportunities so they do not mentally check out.

Nowadays, hiring managers are offering flexible timings to improve the chance of hiring. So, offer existing employees the flexibility to work as per their preference as well. 

How to Improve the Chance of Hiring?

You may not be able to attract and hire the right person because your hiring ads don’t reach the desired target audience. The right people will not apply for the job if it doesn’t reach them. While you are working on alluring the candidate to apply for the job and retaining the employees, you should also work on ensuring the job ad reaches the right and wide target audience.

Here are some best ways that you can ensure the job ad reaches the right people.

1. Take advantage of the employee referral program, where your existing employees and freelancers can suggest reliable candidates from their network to apply for the job. This helps you save resources and time in finding the right candidate.
2. Focus on building employer building to create a positive and appealing image in the market which makes everyone want to work in your restaurant. Post how many employees while working at your restaurant through social media posts, websites, and worker testimonials.
3. Post the job requirement on your social media page. This will allow you to reach a wide number of people, and the right ones will definitely reach out to you.
4. Draft a clear job description so only the applicants who think they can meet your requirements and expectations can apply.
5. Use innovative AI tools and softwares to streamline the hiring process and close the hiring promptly.

Main Reasons For The Labor Shortage In The Restaurant Industry

The restaurant industry is experiencing a labor shortage on a large scale due to a variety of factors, including the impact of COVID-19, many workers leaving their jobs due to consistent and stable employment, wage increases (inflation), insufficient affordable education for their children, and poor working conditions. As a result, restaurant owners are struggling to attract employees, which has a negative impact on business growth.

Let’s understand the reasons in the detail.

Pandemic and Its Impact

One of the major contributors to the ongoing labor shortage in the restaurant industry is COVID-19. Many restaurants and cafes closed down during the pandemic because the entire world was under lockdown and locked in their homes. This forced many workers to switch their jobs to better opportunities, and many changed their career paths.

Child Care

The rising costs of childcare are another reason why many young parents do not prefer working their heart and soul and long hours into low-paying jobs. The average cost of childcare is now $13.85/hour, and many parents find it difficult to accept entry-level jobs.

Poor Quality of Life

The restaurant industry doesn’t offer many perks and benefits to every employee compared to other industries. Many food service workers find it difficult to take sick leave, go on vacation to clear their minds, or enjoy other benefits like other employees do. This is why many restaurants struggle with sudden absenteeism and exacerbate employee shortages.

No Job Security

There is no job security in the restaurant industry because many employees are hired on a part-time or temporary basis. As a result, the staff does not have peace of mind regarding job stability compared to employees in other industries. The lack of job security makes it difficult to plan for the future, and they are not likely to stay in the industry for the long term.

Low wages

This remains the last, but not the least, reason that the restaurant industry is struggling with labor shortage. The low-paying jobs and no career advancement opportunities make it difficult for applicants to apply for vacancies. 

How Does Technology Help In Resolving Labor Shortage Issues?

The evolution of technology can help to overcome the labor shortage issue. For instance, McDonald’s has introduced self-service ordering kiosks to emphasize order customization, improve the delivery experience, redeploy staff, and overcome the shortage. The customers can place an order and pay for it through the self-service order kiosks. Around 65% of customers would visit a restaurant more often where there is a self-service order kiosk, according to a Tillster Report. 

Investing in advanced technology is expensive, but it is essential for businesses to invest in technology to overcome the labor shortage. Every restaurant should have a Point-of-Sale (POS) system which acts as a central management of information to manage all the restaurant’s operations and provide a 360-degree view. 

There are restaurant management systems that integrates POS system with kitchen and the servers can directly send the orders from the table to respective kitchen counters. Also, the managers can get real-time insights which can be used to forecast future needs, and refine the strategy accordingly to manage the existing workforce to meet the customer needs.  

Also, the kitchen can use some robotic help to streamline cooking operations. For instance, Nala Robotics has introduced the Wingman robot, which can fry chicken wings, French fries, and other foods and season and plate them autonomously. There are other food-making robots as well, like Flippy, the hamburger-making robot from Miso Robotics. 

This is a highly revolutionized advancement in technology where voice ordering AI understands the order and passes it directly to the point-of-sale and kitchen-display systems. Del Taco has implemented Presto’s voice ordering technology, and the results were quite effective, as 95% of all the orders at drive-through orders were completed without any staff intervention. 

Wrapping up, 

The restaurant sector labor shortage continues to affect restaurants of all sizes. There are more open positions than there are workers eager to fill them. However, this does not exclude your restaurant from surviving the labor crisis and subsequently thriving with a high-profit margin. 

The lack of workers in the restaurant business is a complicated problem that calls for a well-thought-out, multipronged strategy. Restaurant owners may effectively navigate these hard times by identifying the underlying reasons for the problem and putting solutions in place, such as adopting technology, improving training, providing competitive salaries, and fostering a pleasant work culture. The objective is not just to weather the labor crisis but also to grow and change the business. Implementing these strategies is a key part of learning how to improve restaurant operations management, helping businesses run more efficiently and adapt to industry challenges.

Soumyajit