There remain plenty of gray areas regarding the labor shortage and what the next act looks like. A recent survey from Joblist found 60 percent of job seekers would not consider working in a bar, restaurant, hotel, or other hospitality industry position for their next job. One of the challenges today is that some 11.1 million people clocked time at restaurants before COVID. The crisis put 5 million sector employees out of a job. While that’s come back of late, there are still roughly 1.1 million fewer workers today than pre-COVID. So is this a new pool? The same? Have expectations reset or been thrown out the window?
MORE ON THE LABOR SHORTAGE:
Attracting and Retaining Restaurant Employees in a Labor Shortage
After Layoffs and Months of COVID Setbacks, Will Workers Return to Restaurants?
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While restaurants and bars have hiked wages in an attempt to lure back workers, pay is just one factor as more than 50 percent of former hospitality workers told Joblist no pay increases or incentives would make them return to their old job.
What is it going to take then? And where do we go from here?
FSR caught up with Neema Ardebili, VP of Global Franchise & Strategic Partnerships with ADP, a human resources company that processes the payroll for about one-in-six U.S. workers, to try to look ahead, as difficult as that might be these days.
At this point in the labor shortage, it seems clear the conversation extends well beyond the end of expanded unemployment benefits. What do you think are some current factors keeping people from rejoining restaurants?
Yes, there are certainly more factors at play besides unemployment benefits; however, it still seems to have been a contributing deterrent for former employees returning to work, based on first-hand accounts from our clients. The reality is that assumption around the expanded unemployment benefits being the sole factor is proving to be mute as labor shortages continue. That is not to say it has not improved, but it’s clear more has to be done when it comes to more attractive wages, benefits and work-life flexibility.
Previously, we also felt that workers were uncomfortable returning to workspaces in highly engaged areas, but now data is showing that trepidation is easing since the vaccine is readily available to the greater population. The more interesting piece to this—the worker paradigm shift and reevaluation of options—is harder to quantify. People really had a lot of time to rethink their lives these past several months, from both a work and non-work perspective, and now feel empowered to be more selective when choosing jobs. According to Joblist’s recent survey, 58 percent of job seekers are not interested in hospitality jobs and prefer a different work setting, pivoting towards different types of work such as an office environment. Additionally, there has been an increasing number of stories where workers are poorly treated by customers, so, to some degree, an employer now has an added challenge of protecting employees from irate customers. All of these factors, when looked at holistically, create a large number of challenges that pay can’t easily solve.
Are there some factors you believe are here to stay? In other terms, not COVID related as much as COVID inspired.
Yes, there are certainly COVID-inspired factors that are here to stay which I like to call the “new norm.” Two related items come to mind: new technology and procedure. We’ve seen artificial intelligence (‘AI’) incorporated into restaurants over the past year or so at a faster rate, such as adding self-service kiosks, QR menus as well as virtual assistants and chatbots to handle customer inquiries. Now we’re seeing this technology adoption accelerating further as restaurants have pivoted to more contactless operations.
Regarding procedure, managers now must recalibrate their training processes based around this new injection of technology and even have to create new protocols for newly created roles, such as curbside pickup service. Additionally, while consumers are able to visit and dine in, the demand for takeout has not waned. This means that some establishments are now running two businesses with reduced staff and reduced kitchen capacity. So, while the increase and boom in business is an overall positive thing and hopefully here to stay, it is nonetheless challenging when it comes to managing people and delivering great food and great service.
While wages might not be the main factor, is it safe to say they’re likely going to climb and stay higher because of this shortage? Has the pandemic forced the hospitality industry to address some of its low-wage structures quicker than expected?
As far as wages being the main factor, we feel it depends on the individual—some may consider it their top priority while others feel a different culture is more important. Regardless, based on data we’ve seen from companies raising wages to stay competitive, it is safe to say that wages are likely going to continue to climb higher; however, staying higher is up to the restaurants themselves and the invisible hand of economics. That being said, we feel it will trend on the higher side because it will be challenging to attract and retain talent if businesses begin to eventually lower wages. The same goes for federal and state-set minimum wages. Once you offer a certain wage and/or benefit, workers get accustomed to it, base their lives around it and depend on it. This pandemic has heavily influenced restaurants and businesses in general to address lower wages that workers have been demanding be increased for a long time and brought that rumbling to the forefront.
What are some recruiting practices you’ve seen that have proven more successful than others?
If I had to sum it up in one word, it would be “creativity.” Offer to cover the job prospects meal, cover their cab fare, send them a personal note or call to show how excited you are to see them. Goodwill gestures of sort should be made standard practice. Most restaurateurs utilize word of mouth or local circulations for front of house (FOH) and back of house (BOH) workers and online job postings for management. Of course, the bigger challenge is recruiting the non-managerial workers. Our partners indicate that it is not necessarily the marketing of jobs (i.e., where it is advertised) as it is the information about those jobs that is most important.
They recommend more detailed job descriptions to increase the click rate from applicants. This includes safety procedures like vaccination policies and outlining compensation in as much detail as possible. From our partners’ data, job seekers really want transparency which we feel is directly related to the pandemic. Also, when hiring hourly workers, it is important to accommodate flexibility in scheduling as many employees may have school, childcare, or perhaps another job to work around. Offering employees the ability to have a work life balance and feel like they are part of a team that is looking out for them as a person goes a long way in the recruiting process. ADP clients have had success in being creative by offering a variety of benefits that are of no cost to the employer or the employee. By offering perks like discounts on everyday items, it allows the employees’ pay to go a bit further.
Same with benefits. Are there certain things employees are looking for from restaurants, like flexibility?
As discussed previously, benefit offering is a key aspect in attracting employees right now, with 55 percent of surveyed job seekers saying they would even consider taking a lower-paying job if it offered attractive benefits. Again, this depends on the individual. According to that same survey from Joblist, 74 percent of people seeking work believe business owners must rethink the benefits they offer (or should offer) after the pandemic. In fact, over 50 percent of job seekers cited health insurance, sick and parental leave and flexible work schedules as the most valued workplace benefits and, therefore, are very important to their job selection decision.
Is it possible the industry might never return to past worker levels? In turn, might this shortage usher in an era of automation that people have predicted for years?
Yes, it is possible the industry might never return to those previous worker levels, which we feel depends heavily on the aforementioned factors, such as wages and benefits. We feel it is a combination of those factors along with automation that will produce the next generation of jobs for the industry. Regarding the latter, we remain optimistic about worker levels because AI is here to stay and new jobs emerge in tandem with new technology (i.e., online food ordering and delivery services). This is nothing new. Take, for example, switchboard operators 100 years ago. This job is now long gone, and in its obsolescence birthed brand-new jobs in the telecom industry from the technology that replaced it. Just like then, future employees will return and pivot towards other new attractive roles within the business brought on by new technology and operations, such as social media managers and those overseeing AI operations. Regardless, automation can never replace the friendly smile and warm greetings of a human.
If you had a crystal ball, what would you say would be the next big labor topic on the horizon for restaurants?
Danny, this crystal ball of mine has certainly been put on overdrive the past year so hopefully it won’t shatter, but I would say that technology will accelerate at an even faster pace to reduce the labor dependency in the [quick-service restaurant] space in particular. Most restaurants are struggling to just have enough workers to keep the doors open so when that stabilizes, which I remain optimistic it will, the next labor focus will be about how to reduce labor dependencies when utilizing robotics, automation and AI. I believe it’s coming faster than we think it is; however, automation will never replace the need for restaurants to connect with patrons. To that end, I do see a need for additional service training to ensure that employees are delivering the best service possible and that they are equipped to deal with and respond to the everyday stresses of serving the public.
