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Matthew Krimmel

How to Survive the Restaurant Industry Labor Shortage

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Restaurants across the United States are feeling the effects of the restaurant industry labor shortage. It's had a costly impact on the hospitality industry. The results are visible in dining establishments and on restaurant profit and loss statements, including fine dining, fast food chains, and roadside diners. There's a focus now more than ever on restaurant risk assessment.

If you're a restaurant manager or owner, you're likely struggling to fill open positions at your business. As a result, many restaurants are functioning at a limited capacity, with reduced hours, or have ceased their restaurant operations. One in ten restaurants closed during the height of the COVID-19 pandemic in 2020.

However, even though there's a labor shortage, many restaurants are implementing successful strategies for survival. Read on to see our tips for how to survive the restaurant industry labor shortage.

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Why Is There a Labor Shortage in Restaurants?

The global COVID-19 pandemic in 2020 is the main factor in the ongoing restaurant industry labor shortage. During the height of the pandemic, local and federal governments imposed restrictions on dining establishments. 

The restrictions included capacity limits, reduced operating hours, and social distancing protocols. These mandates forced restaurant owners and operators into unprecedented situations. Reports of failed restaurant chains commonly appeared in the news.

Even when restaurants began returning to normal operations regarding dining and seating capacity, many people chose to order takeaway food. Online ordering apps like DoorDash, GrubHub, and Uber Eats experienced significant growth during the lockdowns. 

Many restaurant employees, including wait staff and various types of chefs, haven't returned to the industry since losing their jobs. It begs the question: where have they all gone?

Where Have the Restaurant Industry Workers Gone?

Consumers have returned to restaurants, longing for in-house dining experiences and gatherings they enjoyed before the pandemic. But the workers haven't returned to the front of house and back of house areas in restaurants.

If you're an owner or manager in hospitality, you know the struggle to hire workers from first-hand experience. Your frustration with trying to find talented workers for your restaurant has been an ongoing battle. Here are the three main reasons for the ongoing restaurant industry labor shortage:

1. Employee Turnover

Due to the pandemic-related restrictions and closures, many restaurateurs had to find a way to cut their restaurant expenses. Some businesses reduced compensation for their employees, including hourly wages and benefits. They also focused on reducing overhead costs to remain sustainable.

Many restaurants eliminated workers to minimize labor cost. The ones who remained saw their hourly rates get smaller while their work shifts got longer. Add in the demanding work necessary to maintain profitability and a high level of customer service, and many servers experienced burnout or quit their jobs.

2. Career Changes

Many restaurant workers who managed to keep their jobs during the pandemic looked for secondary sources of income. This meant the possibility of acquiring work outside of the hospitality industry since job openings were so scarce for restaurants. 

Others returned to school or learned new skills, while some learned how to start a virtual restaurant or launched a ghost kitchen. These types of ventures have been opening across the United States during the past several years. Operating or working in one of these provides an interesting alternative for some restaurant industry veterans.

3. Lingering Health Concerns

Some restaurant employees have lingering health concerns about consistent interaction with the general public. This is due to the combination of lingering COVID-19 variants and the return to full capacity dining rooms. 

In most areas of the country, indoor dining has returned to normal. However, some people are looking ahead to the winter and the combination of flu season and lingering COVID-19 variants as a reason to delay or avoid returning to work at a restaurant.

How to Survive the Restaurant Labor Industry Shortage

Labor shortages leave a long-lasting impact on the restaurant industry. Not having enough employees means your restaurant could suffer from a drop in food quality and customer service and become overwhelmed by a busy dining room. It may force owners to reduce operating hours, limit seating capacity, and rethink their restaurant menus to meet customer demands.

You may lose potential business when your customers become frustrated by the long waiting times for seating and food, substandard customer service, and the possibility of reduced menu options and poor food quality. However, there are ways to adapt to the current situation and even thrive in the long run. Here are strategies for how to survive the restaurant labor industry shortage:

1. Increase Focus on Employee Recruitment

Your restaurant promotes menu items, happy hour deals, and other features to stand out among your competitors. Why not take the same approach to attract the most talented restaurant industry workers? Restaurant marketing, including restaurant SEO strategy, is an important part of your daily activities, and you can utilize it to find workers.

There are several options for getting the attention of potential employees, including advertising on social media or online employment websites. LinkedIn is a good option for reaching a broad audience of job-seekers, as is the job recruitment site Indeed. 

Another good strategy is to offer incentives for current employees who refer individuals who eventually get hired. Many of your employees have been in the restaurant industry for years and know plenty of potential candidates. 

2. Improve Compensation, Benefits, and Incentives

You could consider boosting compensation to attract new employees. Offer benefits and incentives that make your restaurant an engaging workplace. Then, include and emphasize these in your restaurant interview questions

You could offer a variety of compensation, benefit, and incentive packages to stand out from your competition. This may include higher hourly wages, signing and performance bonuses, and a clear timeline for performance evaluations and potential pay raises. Train your employees to use the latest restaurant technology to increase productivity and make them feel more valuable.

Increased vacation time, growth and promotion opportunities, a 401(k), and stock options are other ways to encourage employees to join your company. There are many restaurants in the same position as yours, so get creative and implement ideas to help your business stand out.

3. Prioritize Employee Retention

Once you hire the best talent available, focus on keeping them part of your restaurant staff. In today's challenging environment, prioritizing employee retention can prevent your restaurant from becoming a revolving door for employees. This quality may inadvertently project a bad image of your restaurant business to potential employees.

Some strategies for employee retention include additional staff training, fostering a communicative work atmosphere, and giving your employees an active role in the company's goals and success. We know that restaurant owners and managers have busy schedules but including these features in your program may save you time and money on recruitment in the long run.

4. Emphasize the Health and Safety of Employees

Focusing on the health and safety of employees provides peace of mind to current and potential employees. This starts with following a deep cleaning restaurant checklist to provide thorough sanitation. It should include a restaurant kitchen cleaning checklist and be implemented before opening and after closing hours. 

You'll want to purchase the best deep cleaning products and ensure you keep a sufficient supply of them in stock with inventory control. You can do this by analyzing lead time, which is the amount of time that passes between a customer placing an order and receiving the products. 

Create a restaurant cleaning supplies list to monitor the products in stock and which cleaning supplies need ordering. You’ll also want to train your bartenders how to clean a bar efficiently.

5. Invest in the Latest Technology

There has been a steady increase in the amount of restaurant tech that helps streamline food and beverage operations during the past several years. Much of this has emerged during the pandemic to keep restaurants functioning with limited staff and social distancing regulations.

Invest in one of the latest restaurant POS systems to allow customers to order and pay for food without direct employee interaction. Offer them the option of viewing a QR code menu and paying for their orders at their tables.

Frequently Asked Questions About the Restaurant Industry Labor Shortage

How Is the Labor Shortage Affecting the Restaurant Industry?

Restaurant operators are raising prices, reducing menu options, and limiting operating hours to stay open. The COVID-19 pandemic initiated the restaurant industry labor shortage when local and federal governments enacted measures to combat the virus. Without enough workers to fill open positions, the restaurant industry remains in a labor crisis.

Why Is the Restaurant Industry Struggling to Find Workers?

Many restaurant industry workers lost their jobs during the COVID-19 pandemic. Some of these workers haven't returned to the food and beverage industry. Instead, they've chosen to return to school, learn new skills, or find work in a different area. The restaurant industry is struggling to find workers because there aren’t enough people looking for the number of available positions in the restaurant industry.

How Understaffed Is the Restaurant Industry?

The National Restaurant Association found that as of September 2021, four out of five restaurants were understaffed. Thankfully, staff shortages won’t always result in the need to close your restaurant. There are strategies for mitigating the labor shortage in the industry.

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Survive and Thrive

The restaurant industry labor shortage continues to affect dining establishments of all sizes. There are more available positions than workers who are ready to fill them. But that doesn’t mean that your restaurant can’t survive the labor shortage and eventually thrive again with a healthy profit margin.

Focus on how to implement a reasonable strategy to help your establishment stand out from the competition. Before you know it, your restaurant will be fully staffed, and your biggest concern will be deciding on next week’s dinner specials.

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