The restaurant industry lost nearly 6 million jobs during the first six weeks of the COVID-19 pandemic. Now, with mass vaccinations underway and most states fully reopened, restaurants are facing a serious hiring conundrum.
The Hiring Brick Wall
The news is awash with stories of restaurants embroiled in a hiring crisis. One report says fast-food chains like Subway and Dunkin’ are not only experiencing a labor crunch but also struggling to keep their doors open due to lack of staff. Another report states that restaurants — including franchises like McDonald’s, Taco Bell, IHOP, Little Caesar, and Chipotle — are ramping up hiring to a significant degree.
Per a June 2021 article by QSR Magazine, “The average restaurant today is between 25–40 percent understaffed.”
To break through the hiring brick wall, some restaurants are offering sign-on bonuses, pay increases, cash payments to attend job interviews, or free breakfast for job applicants. Others have shut down entirely after failing to plug the staffing gaps.
While COVID-19 is the catalyst for the current restaurant labor shortage, the issue is multifaceted — and longstanding in some cases.
A Myriad of Contributing Factors
Expanded Unemployment Benefits
The federal government enacted legislation that allows states to extend COVID-19 unemployment benefits through September 6, 2021, plus provides additional unemployment payments of $300 per week through September 6, 2021.
Studies show that most restaurant operators credit the enhanced unemployment benefits for the industry’s labor shortage. The prevailing view among operators is that recipients would rather collect expanded unemployment benefits than work low-wage jobs. Depending on the individual’s unemployment eligibility, they might receive more in unemployment than what they used to earn in a restaurant.
Fierce Competition Among Employers
QSR Magazine says, “There are [staffing] shortages throughout the entire foodservice industry.” Moreover, front-of-house positions — such as servers, hosts, and bartenders — have the biggest increases in job openings. But with so many employers fishing in the same limited candidate pool, employers must often go the extra mile to find qualified workers.
Low Wages and Declining Worker Interest
Studies found that:
- 30% of restaurant workers are leaving the industry.
- 70% of restaurant workers cite poor wages as their reason for departing the restaurant industry.
- Interest in restaurant positions have declined since June 2020.
A May 2021 report by the Economic Policy Institute says that too-low-wages are more likely to blame than unemployment benefits for the labor shortage. According to the report, the footprint of a true labor shortage is rising wages, along with increased competition among employers — and currently, wages aren’t rising fast enough.
Bottom line for employers: When employees are financially stressed, it can take a toll on their mental health.
Employee burnout is a pervasive issue in the restaurant industry. In a 2019 study, around 80% of foodservice and hospitality employees reported feeling burnt-out by their workloads — which can lead to exhaustion, poor mental health, more on-the-job mistakes or accidents, increased absences, and high turnover.
Other Contributing Factors
- Childcare issues. Securing childcare is a continuous challenge for many restaurant workers.
- Safety risks. Despite mass vaccinations, restaurant workers are concerned about contracting COVID-19 on the job. One study concluded that line cooks have the highest mortality risk during the pandemic, surpassing healthcare workers.
- No health insurance. Studies show that many restaurant workers do not have access to health insurance through their employer.
- Substance abuse and addiction. Research found the restaurant industry to be the most vulnerable when it comes to illicit drug use and substance use disorders.
Change Is Expected
The restaurant industry is resilient, and the labor crisis is expected to abate over time. For starters, many states are cutting the $300 federal unemployment benefits early — mostly in June or July 2021. Some policymakers and restaurant operators predict that this move will help bring more people back to work.
According to one report, the number of unemployment recipients is dropping at a faster rate in many states that are canceling the expanded benefits early. But as previously mentioned, the restaurant labor churn does not stem from a singular culprit. There are many variables at play, and to mitigate them, employers need sustainable solutions.
Tips For Attracting Qualified Restaurant Workers
Cast a Wide Recruitment Net
Develop well-written job descriptions and place them on reputable job boards, in visible areas of your local community, and in trade publications. Hold virtual job fairs, offer employee referral bonuses, and leverage the recruitment power of social media. Let customers know that you’re hiring and ask them to spread the word.
Create a Career Page For Your Website
Showcase your job openings on the dedicated career site, along with benefits, perks, and activities that set you apart from your competitors. Make it easy for interested job seekers to apply through your career page.
Provide Competitive Pay and Benefits
Consider paying more than the minimum wage and offering benefits that matter to your workforce. Health insurance, flexible work hours, employee discounts, and training and development are all top of mind for restaurant workers.
Diversify Your Candidate Pipeline
Rather than focusing on a single demographic, aim for a diverse candidate pipeline that you can draw from as needed — such as younger workers, older workers, part-time or summer employees, veterans, and other untapped talent.
Focus on Retention
Per an article published by Restaurant Business Magazine, “Many operators are betting big that the best way to fill a job is never letting it become vacant.” This means implementing strong screening protocols (including drug testing), hiring the most suitable person for the job, training managers to be good leaders, training new hires appropriately, and incentivizing employees to stay.
- Encourage your employees to take time off from work, instead of risking burnout
- Review your tip-payment model to see if it needs improving
- Help your employees pay for childcare. Tax credits are available for this expense.
- Provide resources to employees who are grappling with substance use disorders or money troubles — including helplines they can contact for assistance.
Download the list of helplines in PDF format and hang it on your restaurant breakroom wall.
Grace Ferguson is a business writer and blogger covering payroll, employee benefits, and human resources. She has vast experience serving as a payroll and benefits administrator for large and small businesses.