The question on a lot of restaurateurs’ minds today is how to brace for the so-called “pent-up demand” potentially on deck for restaurants in the coming weeks. Namely, can operators staff up to welcome a rush of business?
The industry’s struggle to hire workers has been well documented, and it continues to take on fresh layers as unemployment benefits, gig/remote work, and higher wages all stir debate. This as some of the country’s largest markets prepare to drop restrictions and fully reopen.
According to Black Box Intelligence, at the national level, the sector has yet to see current staffing pressures translate into an acceleration in wage growth for hourly employees in limited-service restaurants. Median national hourly wage has remained essentially flat for the last three quarters.
At the state level, there are significant differences, however, and wage acceleration has begun picking up for quick-serves. In full-service, hourly wages have accelerated at a much larger pace over the last year, Black Box said.
What this suggests is the labor battle can’t be won on a single front for restaurants, although wages remain a central theme.
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Let’s step into the workings of one organization to get a feel for how dynamic this challenge has become.
Multi-concept operator Cameron Mitchell Restaurants adopted a multi-pronged approach, the company said. For background, CMR always touted a unique company culture that puts employees first and holds to a “Yes is the Answer, What is the Question,” philosophy that’s also the title of founder Cameron Mitchell’s autobiography. It’s resulted in industry-defying retention rates for hourly workers (50 percent), as well as full-time team members, and helps counter the toxic environments many complain of the industry, CMR said.
Yet still, the company hasn’t skirted the current labor shortage. So here’s what it’s doing:
- Referral bonus incentives
- 50 percent off discounts
- Closed seven major holidays
- 401K, health benefits
- Relocation benefits
- Competitive wages for non-tipped associates based on their experience, anywhere from $15-$25-plus/hour depending on the position and location
- $500 signing bonus at select locations
CMR’s culture is a leading factor in why associates grow with the company, a brand spokesperson said.
It believes in open and honest communication and putting associates first, which has been the foundation of every decision, from hourly associates to general managers all the way up to the executive team, including:
- President’s roundtable
- Cabinet meetings (hourly associates’ meeting with General Manager)
- Pulse Surveys
- Onboarding surveys and exit interviews.
- Culture Club events company wide, including hosting an annual Taco Throw Down at the Home Office where all associates are welcome to come with their families for a fun event full of eating, drinking and music, Holiday Parties, team outings.
- Leadership conferences throughout the year for every level of management, these are thee-day events filled with training, food, drinks and team building.
CMR boasts a “Pass the Plate” program that enables associates to try different positions out within the company. For example, a line cook could shadow a GM for a day.
CMR is growing with several new restaurants opening in 2021 and 2022, the company said. And doing so won’t be possible without employee development.
CMR tries to promote from within before it looks externally. It also has a relocation program that gives managers an opportunity to experience new cities across the country in the 14 states CMR operates in.
“We are so pleased to see more Americans being able and feeling comfortable dining out, which reinforces more than ever that reconnecting in person with friends and family is great medicine for the soul,” founder and CEO Mitchell says. “While we are not alone in the labor shortage issue, we believe our family culture is one of the biggest incentives to offer. Since the founding of the company 28 years ago, we have always offered a culture that puts our Associates first. This has resulted in industry high retention rates. In fact, our culture has led to many long tenured Associates who have been with us from nearly the beginning of our company over 28 years ago. From hourly associates to general managers all the way up to the executive team.”
Rewards Network, a provider of marketing and financing services to the industry, which has more than 12,000 restaurants in its base, offered operators some tips to navigate the labor climate from a broader view.
Calculate the value of adding staff:
This has become a vital reality for restaurants. Do you need as many workers? Do you need more? It comes down to an obvious question—is my current model working? While nobody really knows what post-COVID dining trends look like, it is clear off-premises will remain viable. Some restaurants are most successful offering only takeout and delivery, or a limited dine-in plan. Take stock of the other establishments in your area, Rewards Network said. If they aren’t seeing long waits and multiple turns of full rooms, do you believe you will?
If the answer is “maybe” or definitely “no,” consider keeping a tight staff and reducing the store’s lowest-earning hours to increase profitability. On the other hand, if wait times are climbing, leaving money outside the four walls isn’t an option. “Don’t put out the sign just yet,” Rewards Network said. “Before you begin hiring in an employee market you need to develop a cost of acquisition threshold. In other words, you should have a good grasp on the value each staff member brings to the business and what you can afford in terms of acquiring and retaining them as an employee.”
Promote from within:
As CMR mentioned, building a base from the bottom up is a powerful lever. If your restaurant is in a position to hire, it’s essential to assess current staff and evaluate potential for promotion.
Doing so has two major benefits, Rewards Network said—the individual already knows your business, which not only means that there would be less training and staff disruption, but also he/she feels a sense of connection and personal responsibility toward the brand.
Consider employees for roles different than their current positions based on individual strengths, Rewards Network noted. For instance, your food runner might not have experience as a server. Yet they already have an in-depth knowledge of the menu, table numbers, and will likely make the switch much faster than an outside hire. “You may also find that promotion from within widens your options for hiring. It is much easier to find and hire entry-level employees as opposed to more skilled staff positions,” the company said.
Referrals and bonuses:
It’s hard to recruit. No way around that. Leveraging your current network and staff for referrals might actually be easier. But you have to sweeten the deal. It will be worth it in the end.
Creating a strong bonus offer using a restaurant’s cost of acquisition threshold is a good place to start. An example—a restaurant could offer every referral and resulting new hire a $100 bonus after the first month and another $250 after six months.
While these seem like large numbers to fork up, if you consider that bonuses are being paid over the course of a 30-hour work week, then you’re increasing the cost of an employee by less than $1 per hour if they stay the full six months. That extra cost will also decrease every shift after the initial six months, Rewards Network said.
Bonuses can be especially effective to bring qualified back-of-house employees into the fold, those who typically don’t receive tips. “The goal in hiring for any particular position is longevity—high staff turnover can be disruptive and may cost you money in the long run. To avoid this, make sure that your bonuses are drawn out over time, which keeps your risk low and the employees’ opportunity to continually earn more, high,” the company said.
Sell the job:
We’ve all seen this lately. You can’t just list a job and expect people to take it because it’s a job offer and they’re looking. They might just be browsing, and there are options aplenty. Not just from other restaurants, but also from rival sectors, like retail, and remote work in general.
While bonuses are great clickbait, Rewards Network said, writing an engaging, clear job description is more critical than ever. State clearly how you value and reward current staff when writing/updating ads, the company suggested.
Do you give free meals during each shift? Offer flexible schedules or the ability to work overtime? Consider asking your staff why they love working at your restaurant and incorporate the best responses into your posting.
If the open spot includes tips with pay, a smart move would be to include the average tipped value that people in those positions make weekly, the company said. While their base pay might be minimum wage, severs, hosts, and even bussers tend to make much more at the end of the day. Don’t take that reality for a given. Putting it front and center could separate one job posting from the other. Say $5 per hour plus tips (just an example) versus “our servers make $20 per hour on average.”
Pay for placements:
Once you’ve written a great job listing, you may post on sites like Craigslist, Indeed, ZipRecruiter, and Facebook, Rewards Network said. “Consider investing extra to promote your listing, which ensures that your ad receives top billing when candidates perform related searches. Ideally, you want the most eyes possible on your posts—a helpful way to build a large, diverse candidate pool. Posting on other, lesser-known sites may also help,” it added.
Here are three hospitality-focused job boards:
Of course, operators can post to their own websites and social media as well. “A customer who loves your brunches may just be your next hire,” Rewards Network said.