Labor shortages have always been a significant challenge for restaurants, particularly low-cost and fast-food restaurant chains. Since many chains are operated as franchises, handling labor shortages becomes even more challenging as parent companies work with franchise owners to keep enough staff. However, the challenges in staffing restaurants have gotten a lot worse recently.
“A common misconception is that all restaurant jobs are low pay, no benefits, you’re treated as a commodity, no future and that it’s a toxic workplace,” says Tony Smith, CEO of Restaurant365. “Because of this, restaurant turnover is always higher than most industries, often hovering around 70% annually.”
Many restaurant owners expected attracting and keeping employees to get easier as the pandemic faded into the backdrop of our lives. However, it is becoming increasingly clear that the pandemic fundamentally changed how workers view restaurant jobs and how restaurants view their workers. Finding labor shortage solutions in 2023 requires innovative thinking and an increased reliance on technology.
Here's how the leading restaurant chains, both those that are already big and those that are up-and-coming, are handling restaurant labor shortages and either failing or succeeding at staffing restaurant chains.
One of the best restaurant labor shortage solutions is to think like your potential employee. It can be hard to get employees to come into the office for a dry, inconvenient interview. You’re trying to attract mostly young talent, so make it fun and appeal to short attention spans.
Brands like McDonald's, IHOP, and Taco Bell are all holding big hiring parties with free food and entertainment. The goal, perhaps, is to make it feel like working at one of these chains is a non-stop party.
Not only does this sort of hiring strategy attract talent that may otherwise not look twice at these businesses, but it also endows employees with a sense of camaraderie from the very beginning.
Avoiding labor shortages isn’t cheap. Across the board, restaurant chains are paying for applicants, either by giving incentives to applicants or offering referral bonuses to anyone who suggests a suitable applicant.
Chipotle offered referral bonuses of up to $750. Applebee's launched the "Apps for Apps" program and gave anyone who was offered an interview a free appetizer. “Hiring bonus” signs are common in restaurants across the country.
MOD Pizza relies on impact hiring to welcome people who would otherwise struggle to find employment. While most restaurants work very hard to avoid hiring ex-offenders, people struggling with illness, disabilities, homelessness, or other typically excluding characteristics, MOD goes in the opposite direction.
An inclusive approach to labor shortage solutions, MOD actively seeks out these kinds of hires with their impact hiring model. Not only do they offer overlooked populations a fair shot, they also create a culture that makes employees feel proud to work there.
This model has also created a powerful feel-good connection with consumers and helped make them one of the fastest-growing restaurant chains in the country early in their development.
José Cil, CEO of Restaurant Brands International, owns a number of restaurant chains, including Burger King, Popeyes, and Firehouse Subs, all of which are run primarily by franchises.
When talking to franchise owners, Restaurant Brands International found the following to be key in keeping and attracting workers. The majority of big restaurants in the US seem to agree, with many of them falling in line with these key components of maintaining a workforce and attracting and keeping employees better.
Employee engagement may look different in different restaurants.
Panda Express, the largest Asian restaurant chain in the US, has rolled out a new employee app that offers a wide range of tools to help their employees work better and enjoy work more. It gives them greater control and flexibility in their schedule and provides opportunities for career growth right within the app.
Zaxby’s fried chicken chain only hires people they believe will be a good fit with the team, even in a starved labor market. They make interviews into real conversations that aim to get to each hire’s true personality. The result is tight-knit crews that work well together and stay longer.
Most people don’t want to stay at a restaurant forever (unless the pay is GREAT, and we’ll get to that in the next section). Therefore, paving a road to a brighter future is key to avoiding labor shortages over time.
Many leading brands are looking beyond in-house promotions and exploring support for educational advancement, offering some kind of tuition reimbursement. These long-term rewards can be major incentives for people who might otherwise find higher education to be cost prohibitive. And for some chains, education benefits have significantly increased the likelihood of participating crew members to move into management positions within the organizations offering them.
Let's face it, good benefits and pay are still some of the most powerful factors for attracting and retaining labor. However, you may be better off paying managers very well and keeping your staff at a more standard rate. By hiring within and letting employees know they can reach manager positions that pay well, you can inspire excellent work.
If you want to keep the best managers, you might not have to pay that much, but you better be ready to invest. Most restaurant chains average at least around $44,000 per year for a manager position, while some of the higher-paying ones pay around $73,000 per year to their general managers.
Try as you might, you're not always going to be able to hire as many employees as you would like. However, there are some things you can do to get more mileage from the employees you have.
One approach includes reduced ingredients and menu simplification to make restaurant operations smoother. Automation is another tactic that can complement and offset the tasks required of your human personnel.
Countless big restaurant chains are turning to automation to contend with labor shortages.
How can you make this kind of automation work for you? There are many ways to automate without having to worry about installing a burger-flipping robot.
Self-service kiosks are a superb way to let customers take care of their own orders without needing to involve a staff member. Tablet ordering or online ordering also empower customers to place their orders without having to place a call or interface with waitstaff.
Even solutions with the ability to support automated inventory tracking can make a tremendous difference in reducing the strain on your employees so that you can operate smoothly with fewer of them.
The labor market isn't likely to improve anytime soon, but by employing some of the strategies utilized by the top restaurant chains, you can find restaurant labor shortage solutions that work well for your restaurant.
Whether you leverage automation to reduce the load on current staff, find innovative ways to attract new hires, explore new tactics to keep your employees longer, or a little bit of all three, you have creative solutions on hand to make staffing restaurant chains easier.