Business is coming back. Consumers are excited to frequent restaurants again. And operators are happy to see an increase in revenue. While the transition phase toward the “next normal” has not been easy, operators over the last 15 months have learned a tremendous amount about themselves and their business operations.

Nothing stood out more during the pandemic than the need to pivot or adapt to what arrives next. And more flexibility is required as we prepare for that moment.

The transition phase to the “new normal” was supposed to look and feel pretty close to the old normal. However, labor shortages and supply chain disruption have been at the forefront of fresh obstacles operators now have to face. In part one of this series, we look at short- and long-term challenges to labor shortages and how restaurants can overcome them.

Labor shortages

Operators are looking for employees and are willing to pay and do more to hire and retain workers. Despite operators’ best efforts, however, the labor pool is thin and the level of loyalty is marginal at best.

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Inside the Restaurant Industry’s Critical Labor Shortage

The long-term approach requires adjustments. Learnings gathered over the last 15 months have provided operators the know-how to adapt. Doing more with less requires change. Without change, staff burnout will be a factor and customers will stop visiting those restaurants. Instead, they will embrace new favorite places that have figured out how to provide the food, service, and experiences they covet.

Short-term Solutions

Increase what you pay your employees. Paying employees minimum wage is often not an option today because everyone is paying more to get employees back to work. Operators essentially have to pay what it takes to be able to staff restaurants if they want to be able to maximize hours of operation and execute to the standards of their customers. Quality of staff, even if it costs more, is the direction that many operators are moving toward as hiring cheap or inadequate staff will only hurt the brand and ultimately cost operators more. 

Provide additional perks. Incentivizing employees to drive added sales can be a factor in having a happy, stable staff. As opposed to a traditional bonus program—that is difficult to attain and where payment takes a while—the incentives need to be more “spur of the moment” and flexible, such as promoting LTOs or adding sides or desserts to increase average check.

Free meals for family. An employee who who can provide their family with a perk can create some instant loyalty. Once the seed is planted, it becomes more of an incentive for an employee to stay at the job and perform well because their family is reaping some of the benefits.

Employee referral program. Happy employees typically recruit potentially more happy employees. They understand the brand, the roles and responsibilities and pluses and minuses of the position. In times of limited labor pools, recruiting “from within” is viable and well worth the cost of paying employees the recruitment incentive.

Flexible schedules. Flexibility has become a significant element of everything operators have been dealing with from the start of COVID to the point they are at today. In general, most people have been living with limited work structure in their lives and employees are looking for some of that flexibility as they pursue new jobs. Knowing that they can switch hours with other employees or make reasonable requests for time off provides added incentive beyond salary.

Long-term Solutions

Menu simplification and SKU reduction. Throughout COVID and as operators transitioned to the next normal, simplification continued to be the solution to many challenges. Keeping menus simple does not mean they are not innovative. Simplification is about avoiding unnecessary complexities that require more labor and ingredients, specifically with items that are used in multiple recipes. It also results in better execution and happier consumers who are getting an operator’s best products instead of largest amount of options.

Enhanced productivity in a compressed footprint. A smaller, more efficient space in a high traffic location can provide superior results. With limited seating, simple production, a menu easy to execute—even with customization, a smaller staff is needed. Instead of focusing on comfort and the experience that comes with it, there is a focus on providing a high quality product that can be ordered in multiple ways and picked up or delivered to the satisfaction of the consumer.

Special people vs specialists. Operators have always valued experience when evaluating who they would hire. Rightfully so, there are many positions within restaurants that require experience. But as we transition to less complexity in the next normal, people who are personable and looking to learn and be part of a team become more important. It is essentially a blank canvas and operators can create a beautiful picture if they have a strategy to make these special people, great employees.

Lifestyle improvements and cultural changes. Beyond hiring employees and managers, it is also about keeping them. Operators are all looking for brand ambassadors. Those are employees that love the brand, love their job and are a big part of driving customer loyalty and frequency of visits. Employees want to be paid fairly, but also want a lifestyle where they get ample time off and flexibility in their lives. Managers want to avoid burnout and four-day work weeks are becoming part of the restaurant culture.

Technology to make it easier for customers and staff. Making it easier for the customer is the one solution to making it easier for an operator’s staff and ultimately reducing the number of employees in the operation. It starts with an App and website that is easy to navigate and allows the consumer to order, customize and pay. In addition, artificial intelligence is going to continue to have a major impact with facial recognition as a big part of it. Automation within the four walls, from pick-up lockers, to back of house robotics will all support greater productivity and reduced labor.

Consumers may understand an operator’s labor obstacles, but ultimately, it is not their problem since they are paying for quality food, service, and more. Those operators that make the necessary adjustments will win over these consumers and create more loyalty and ultimately increase frequency of visits. The focus remains to do what you do well and to do it consistently.

Journey to the Next Normal Part 2: Supply Chain Disruption

In part 2 of the Journey to the Next Normal series, Kinetic12 will look at supply chain disruption. What is causing supply chain issues and how is labor factoring into the problem?

Bruce Reinstein and Tim Hand are partners with Kinetic12 Consulting, a Chicago-based Foodservice and general management consulting firm. The firm works with leading Foodservice suppliers, operators and organizations on customized strategic initiatives as well as guiding multiple collaborative forums and best practice projects. They also engage as key note speakers at operator franchise conferences and supplier sales meetings. Their previous leadership roles in restaurant chain operations and at Foodservice manufacturers provide a balanced industry perspective. Contact us to talk or learn more about how we can help your organization understand the Restaurant of the Future and how Emerging & Growth Chains will define the future of Foodservice. Kinetic12.com. Bruce@Kinetic12.com or Tim@Kinetic12.com