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How to Overcome Labor Shortages in the Restaurant Industry

Coral Drake | September 27, 2022 |

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How to Overcome Labor Shortages in the Restaurant Industry

The restaurant industry has long been plagued by challenges when it comes to hiring and retaining a workforce. Traditionally, this has been an industry with unusually high turnover, compared to other jobs at similar pay rates. 

In 2019, restaurants reached an all time high in losing employees, a rate of 75%. With that rate, only a quarter of the people employed at a restaurant at a given time would still be working at that restaurant a year later. 

At a time of historic labor shortages, it should come as no surprise that restaurants are getting creative in finding ways to overcome labor shortages in the restaurant industry. Here are a few of the techniques they’re using. 

Function With Fewer Employees

Your restaurant may be wasting money on employees they could do without while simultaneously increasing turnover by spreading the employee budget too thin. The first solution to improving employee retention at your restaurant is to focus on quality over quantity. Put another way, operators should focus on staffing fewer employees, but also on staffing the right ones during each shift. 

Where possible, it helps to supplement those quality employees with technology, too. Here’s a look at a couple options: 

Offer Self-Ordering Kiosks 

Self-ordering kiosks are a great way to offset staff volume while offering a smoother experience to customers. In fact, half of customers surveyed by a restaurant kiosk provider in 2019 said they would prefer visiting a restaurant that offered kiosks. 


Using self-ordering kiosks, customers can order, pay, and communicate with the kitchen and staff without needing to interface with an employee. Customers may not order from kiosks all the time, but the customers who choose to use them can reduce the workload for staff.

Expand Take Out While Reducing Dining In

For most restaurants, the dining room represents a major money sink. Staffing a dining room requires a significant investment. Mistakes in the dining room can seriously hurt a restaurant's reputation. 

It's frustrating for a restaurant to staff a large dining room when only a couple of customers are present. However, staffing the dining room too thinly can result in service delays and issues. 

drive thru

One innovative solution is to offer more takeout options and reduce hours in which the dining room is open. When it is open, the dining room will be more predictably full. When the dining room is closed, customers can still order takeout. Keeping a takeout window open is an easy solution to continue to serve walk up customers when the dining room is closed. 

Reducing dining room hours is a big step that not all restaurants are ready to take. However, if you're struggling to staff and maintain a dining room and you already have a robust takeout program, it may be a good solution.

Retain Your Best Team Members

The food service industry has historically high turnover. However, that doesn't mean you can't offer a job and even a career that keeps people for the long term. 

Employees who are motivated to stay with your restaurant are likely to do better work and become more experienced in what they do, which means that fewer people can do more work. The consistency provided by long-term workers also tends to result in customer loyalty and good company morale. Here are some ideas for keeping better workers for longer. 

Pay Living Wages

The first step to keeping staff longer and incentivizing them to work harder is to pay living wages. For many restaurants, making room in the budget to pay higher salaries will require employee cuts. If you're already making other adjustments to accommodate fewer employees, such as using self service kiosks or reducing dining room hours, it can be hard to spend the saved money on boosting employee wages. However, a great way to keep good talent is to pay living wages

Many restaurants are also finding that the old way of compensating staff isn't working anymore. Traditionally, wait staff were compensated differently than other staff such as cashiers, dishwashers, etc. Wait staff received a low hourly rate but were compensated with tips, while other workers were paid a standard hourly wage. 

This tip-based compensation model is insecure and creates unneeded frustrations and anxieties for wait staff. Furthermore, as more restaurants rely on fewer staff members to do a wider variety of tasks, separating responsibilities in this way is less practical. 

For instance, when the dining room is closed but the takeout window is open, a chef may act as a host and cashier. Therefore, a consistent compensation model that is less reliant on tips works better for many restaurants.

Build a Strong Company Culture

A company that can inspire loyalty in its employees can keep them even when other positions offer higher pay or more benefits. Restaurants that create a place that employees love to work keep those employees longer. 

  • Create a culture that emphasizes respect and consideration to develop an atmosphere that is pleasant to work in, even when customers are difficult or there’s a rush. 
  • Develop systems that are clear and easy to follow so employees don't have arguments about scheduling, responsibilities, or anything else. 
  • Plan parties, events, and get-togethers to celebrate the team and build a bond outside of the work environment. 

Offer Additional Benefits

With the entire foodservice industry experiencing a national labor shortage, you are in direct competition with other restaurants and many other job opportunities. The first solution is to pay higher salaries. If that's not an option or the other restaurants around you have also raised salaries, the next solution is to offer new benefits. Here are just a few suggestions for the kind of additional benefits that could be offered:

  • Flexible schedules. Restaurant employees often are fitting their restaurant jobs around other responsibilities like family, school, or another career. Offering schedules that accommodate other priorities is a good way to attract and keep employees.
  • Free food. Free food may seem like an obvious perk of working at a restaurant, but a surprising number of restaurants are unwilling to provide free food to employees, even when waste is high. Offering free food is an easy way to build loyalty, get free advertising when employees share food, and incentivize employees to feel more positively about the restaurant.
  • Paths to advancement. Many restaurant employees believe they are in dead-end jobs, which motivates them to look for other opportunities. When offered clear paths for advancement and promotion along with raises, employees are incentivized to stay longer and work harder. 

Attract and Compete for New Talent

No matter how hard you try to reduce the staff you need and make that staff the best it can be for your business, the fact remains that there will be turnover at your restaurant. Replacing a lost employee is especially challenging during a national labor shortage. 

Here's a short list of techniques you may or may not have previously considered to draw the best employees to your restaurant:

Boost Awareness About Your Job Openings

The days of posting a “Now Hiring,” sign in the window and hoping for the best are over, that is if you want to attract the best talent. While you certainly shouldn't overlook posting signs around the restaurant, successful advertising requires much more effort. 

Encourage staff to seek out other potential hires with a referral system. Incentivize them by offering a bonus or time off if they bring in a candidate who is hired and retained for more than 90 days. 

Social media is a valuable outlet for letting people know about job openings as well. You should already have a strong social media network for the purposes of marketing your restaurant, which positions you well to utilize social media for hiring purposes, too. Remember to post repeatedly on all of your outlets so job postings stay in feeds. 

Advertise More Than The Job

If you've built a strong company culture, offer additional benefits like flexible scheduling or clear paths to advancement, or simply pay more than the competition, don't hesitate to mention those perks when you advertise a position. Think about what you offer that sets you apart from your competitors. Ask your current employees what they love about working for your restaurant, then share it!

Advertise the job in a way that will make potential hires want to compete for it. By not holding back, you'll make it much more likely that you'll attract the best possible talent for your restaurant.

Get Creative to Overcome Labor Shortages in the Restaurant Industry

The food service industry  may have struggled with hiring and keeping employees, but in today's national labor shortage, the restaurant industry has to be willing to try new things and take new risks to survive. 

Changes like reduced hours in the dining room, making changes in the budget so you can pay living wages and retain staff, and being proactive to boost awareness in the hiring process are effective when it comes to overcoming labor shortages in the restaurant industry. It can be intimidating to rethink not only your restaurant model but how restaurants have historically functioned. 

However, restaurants that are not only surviving but thriving in a post pandemic world don't look like the restaurants of the past. Take a risk, make a change, and you may be astounded by how positively your staffing and your restaurant respond.