Going back to pre-virus days, at the start of 2020 only 13 percent of limited-service restaurant companies reported being fully staffed in hourly, non-management positions. Full-service brands fared slightly better at 38 percent. Only 10 percent of full-service restaurant companies reported their kitchens to be fully staffed.
In sum, all of these dynamics have created a free agent market of sorts. Restaurant workers can pick and choose brands in ways they couldn’t before. It’s why concepts are raising pay, offering wild incentives, like iPhones for retention, referral bonuses, and so forth.
Workers’ wages rose 3.6 percent overall, year-over-year, per June data. In particular, hospitality workers made 7.9 percent more compared to February 2020.
Something else to consider is former President Donald Trump’s decision to suspend J-1 work-and-study visas as a coronavirus precaution. Foreign workers, often brought in on these, historically gobbled up summer jobs.
In the wake of Trump’s call, however, the number of U.S.-issued J-1 visas plunged 69 percent in the fiscal 2020 year. It fell to 108,510 from 353,279. Couple that with concerns held by older workers, such as health issues and childcare, and it’s opened the flood gates for younger employees, who are fast becoming more selective than past generations due to wider access to college education and the extra-curricular activities universities covet.
In May, 33.2 percent of Americans aged 16–19 had jobs, according to the DOL. That’s the highest percentage since 2008.
How can restaurants gain a strategic advantage in this “talent war?”
Bruce Tulgan and RainmakerThinking released a white paper addressing the labor shortage and how to recruit and retain today.
- 1. Define a clear value proposition.
- 2. Build and maintain a supply chain of applicants.
- 3. Be very, very selective.
- 4. Stay in close dialogue between hiring and day one.
- 5. Structure on-boarding and up-to-speed training.
- 6. Turn every manager into a chief retention officer.
“The employer side of the transaction is always the same: Employers want to get as much of the highest priority work done as well as possible, as fast as possible, with the least possible cost or friction,” Tulgan said. “The employee side of the transaction is more complex and variable: Employees want to earn money, have favorable working conditions, and make a positive contribution to the mission.”
How the company breaks this down is through what it labels “dream job factors.” It’s entirely possible none of these were part of the playbook before COVID for some operations. But it’s likely they are now. And few, if any, restaurants will be able to meet all of these. “But you have to offer something,” Tulgan said. “The less you offer in one category, the more you must offer in another.”
1. Performance-based compensation
How much is baseline pay and benefits? Are they comparable to competitors? Are there clearly defined opportunities to learn more based on extra-mile effort and results?
2. Supportive leadership
Is there an immediate manager who provides regular guidance, support, and direction? Will they make expectations clear, provide regular feedback and recognition?
3. Role and responsibilities
What is the nature of the actual work itself? Is it difficult, repetitive, or tedious? Or is it interesting and valuable? Is it mission driven? Does it have positive, meaningful results?
This is one area where community involvement can be a key unlock for restaurants; helping people align with a mission.
As FB Society CEO Jack Gibbons told FSR: “Skills can be taught, but hiring employees who embody your brand and its core values is not teachable. At FB Society, all of our concepts build from within through a strong and meaningful culture that aligns with each brand’s DNA. Then we hire people who believe what we believe and it creates an unspoken bond that makes the headwinds we’re currently facing as an industry a bit easier to navigate.”
Smokey Bones CEO James O’Reilly refers to this as “human-centric leadership.”
“We also support our workforce with generous benefits beginning on day one of employment, including basic medical, prescription drug, a la carte hospital, illness, and disability benefits, scholarships for all employees and family members, benefits and discounts on thousands of companies’ products and services, legal, and mental health services,” he said.
GSR Brands (Tom & Chee and Gold Star Chili) CEO Roger David, who started as a dishwasher in his father’s restaurant, said simply, “All the money in the world doesn’t matter when someone dislikes the company they work for.”
“Employees need to know they can be heard, and they want to work for a company that has a positive impact on their community,” he added. “A culture of fear creates resentment, distrust and instability; a supportive one fosters hope, happiness and innovation. Company culture and values positively impact employee satisfaction, so if building a solid culture isn’t at the top of your to-do list, it might be time to add it.”