The benefit wars are heating up amongst employers who are trying to overcome the labor shortage. After laying off and furloughing employees during the pandemic, many companies have struggled to attract applicants as they attempt to restaff and grow, including many restaurants. Over the summer, restaurant chains like Papa John’s, McDonald’s, BurgerFi, and P.F. Chang’s announced wage increases and signing bonuses. But “Now Hiring” signs in front of restaurants can still be seen dotting streets and in some cities, restaurants are even being forced to close early because they cannot find enough workers to fill shifts.
Now, major employers like Walmart and Target have raised the stakes of the wage and benefit competition even higher announcing tuition benefits for eligible employees. Amazon has also announced wage increases to $18 an hour and new college tuition benefits. While large companies can continue to up the ante to attract workers, not all restaurants can compete with equal benefits and wage offers. Restaurants also cannot offer chefs, serving staff, bartenders, and other employees the option to work remotely like many companies are now offering to match employee demand.
The restaurant and hospitality industry typically employs a lot of part-time workers to meet the variable needs of their business, and part-time workers are usually not offered a traditional medical, dental, and vision benefit plan. In fact, offering a qualified medical plan can hurt the employees financially by disqualifying them for a medical plan and subsidy on the ACA exchanges. The solution for restaurants is not to rush into offering a medical plan, but focus on other benefits that are less expensive and truly meet the needs of the employees.
Remote work options are not the only benefit that job seekers are searching for today. The pandemic has made more than geography a priority for many people. Caregiving, mental health, vacation time, access to telehealth, education—these are all benefits that hold greater value for people today. And for some, these benefits offer more value than a bigger paycheck.
One of the biggest changes in benefits for employees is employers recognizing the need to support the well-being of employee’s mental health. More companies are expanding mental health resources and creating programs to remove stigmas and give employees greater access. The pandemic has caused a significant increase in mental health challenges, and some restaurant workers are still dealing with the impact it had on them. Especially as variants drive up case numbers. According to the CDC 11 percent of adults reported symptoms of anxiety and depression between January and June of 2019. In December of 2020 that number had grown to 42 percent. Some of the most popular mental health benefits companies are offering include:
- Access to free counseling sessions or reduced copays for in-network therapy
- Subscriptions to virtual counseling service apps
- Subscriptions to wellness apps for meditation, stress reduction, and improved sleep
Childcare continues to be a challenge for employees this year. Even though children have returned to school, COVID cases among kids continue to rise and many kids are having to quarantine after being exposed at school. According to the Kaiser Family Foundation, during the pandemic schools and daycare closures forced close to half (47 percent) of working mothers to take unpaid sick leave to care for their children, and this number was even higher (70percent) for mothers who had part-time jobs. In the hospitality industry, women were impacted more by furloughs and job loss than men. According to the Bureau of Labor Statistics, 53.4 percent of job losses in the hospitality industry were experienced by women. The ongoing caregiving burden can make it difficult for women currently working in or seeking employment in the hospitality industry. The solution to address this need could be greater flexibility in working hours and schedules for employees to address childcare needs.
More than ever, employees are looking for a sense of belonging and purpose, and this is something that does not need to be an expensive benefit but can be created through company culture. It is a great way for employers to compete in a tight labor market as opposed to just increasing wages only.
Overall, employers are looking to add benefits to make employees lives easier, especially with some of the specific pain points they have encountered during the pandemic such as juggling family/work issues, and financial pressures. In the restaurant industry, offering creative solutions and benefits to address these needs could be more effective than wage increases as well as offering work flexibility, and the sense of purpose, belonging and a clear career path that workers want.
The full impact of the pandemic on the hospitality industry is still unknown. It is an evolving situation and as a result, restaurants must remain nimble and flexible, able to react as new challenges develop. Right now, that challenge is identifying ways to attract employees to fill shifts and continue to recover and grow.
Doug Ramsthel is a Partner at Burnham Benefits, a Baldwin Risk Partners Company, one of the top 50 employee benefit consulting firms in the United States. He consults employers across the US on their benefit plan strategy, design, funding, and communication.
