Exploring Solutions to Labor Woes in the Restaurant Industry

Marcus Lemonis of The Profit on CNBC refers to key components of a business as People, Product & Process. When consulting with restaurant owners we talk about these components and find the ‘people’ component to be the most challenging. Mainly, being understaffed or poorly staffed is an issue that has a ripple effect throughout a restaurant. Often, we find staffing to be reactive to immediate needs as opposed to proactive to a plan and goals. 

Try this exercise. Build your restaurant on paper as if you were starting in business today. Determine your break even point based upon today’s market for construction, cost of goods, etc. Now compare the numbers to your current operations. Adjust according to the current market, not against what it took to operate your restaurant profitably pre-pandemic. Make changes and move forward. After all, if you started today, you’d have nothing to compare against except to the current market. 

Of course, this isn’t the only solution to a challenging labor market for restaurant operators. To that end, below please find several articles that I have found very enlightening on the subject.

Restaurant Industry Labor Shortage

Good people are hard to find and even harder to keep in today’s restaurant labor market. Even prior to the pandemic, recruitment and retention have long been major challenges for restaurant owners and operators.

COVID-19 pandemic ushered in massive change in the restaurant industry. Many restaurants were forced to close, and others had to make the challenging decision to let go of valued staff and reduce their workforce. 

Now industry is up against a volatile environment riddled with surging inflation, soaring restaurant food costs, and continued supply chain and commodities volatility.

Great food and service are at the core of successful restaurants. Both factors require skilled employees — and a lack of which leads to real challenges. So how do you manage in a market with a labor shortage and record employee churn? Check out the Restaurant Industry Labor Shortage guide by Toast HERE.

Labor Shortages for Restaurants: A Look at A Long-Term Solution

Walk into nearly any restaurant and the effects of the labor shortage can be felt. Servers covering impossibly large sections, with long wait times revealing the kitchen is undoubtedly just as short-staffed. Understanding customers have actually become better tippers, with tipping increases out-stripping inflation, but such kindness can only go so far. To help counteract the skeleton crews and increased prices caused by inflation, employers rely ever more on their staff to provide quality service to keep customers coming back.

Even before the Great Resignation hit the workforce, restaurants had difficulty staying fully staffed. However, while many industries have been able to overcome the impact of the pandemic by increasing remote work, these options are simply unavailable to the restaurant industry. While other industries were able to offer remote work to coerce employees back to their computers, such options are not available for restaurants. Read the full article HERE.

Three Staffing Solutions to Help Restaurants & Hotels Thrive

Turnover in the restaurant and hotel industries has been a costly and time-consuming challenge for management long before the pandemic ensued. Serving as one of the world’s largest employers of part-time labor, the annual turnover rate in the restaurants and accommodations sector exceeds 74%  – much higher than the national average, which sits between 10 and 15%. Combining the costs of recruiting, onboarding, training, and even productivity loss associated with the quick churn, the cost of employee turnover averages at around $5,864 per person. Read more HERE.

Let’s keep this important conversation moving along. Thank you in advance for submitting your insight and perspective below or directly to me at Paul@Acceler8Success.com.

Have a great day. make it happen. Make it count!