FOOD FOR THOUGHT LEADERSHIP

Jul
02
Workforce No. 1 issue facing restaurateurs … Solutions?

If you operate a restaurant, how many times in the past year did you say:

  • We need more staff, but no one is available to hire.
  • Employees are leaving for another restaurant paying $1 more per hour.
  • Other businesses are poaching our people.

ORA members regularly tell us that labor is the No.1 issue in the industry and it’s not unique to the restaurant and hospitality space. Many industries are struggling to find and retain a reliable workforce, including catering businesses, bars, food trucks, craft brewers and hotels.

In fact, as we face the uncharted waters of what is essentially zero unemployment in many areas of the U.S., including Ohio, we’ve started referring to the workforce challenge as a crisis. We don’t make this statement lightly, however the shortage in staffing has become more of a problem than the classic issues of government over-regulation, rapid technology changes and has exacerbated others such food safety and thorny HR topics.

According to research firm TDn2K’s 2019 Recruiting and Turnover Report, 25 percent of full service and 35 percent of limited service brands report they are understaffed at any given time. We believe these numbers are understated in certain segments of the restaurant industry, especially quick service. An Ohio restaurant operator recently shared with the ORA that his business regularly runs short by 100 workers, despite using employment “tools” – word of mouth, local recruiting, LinkedIn, Indeed and other job boards.

Consider these additional facts:

  • TDn2K says staffing problems are also severe at the management level, with 52 percent of companies reporting they are understaffed for managers.
  • Our industry workforce is filled with millennials in their 20s and 30s. They have grown up in an era where professionals change jobs and careers on a regular basis. Annual turnover is at high levels for many restaurants, sometimes above 100%.
  • 585,000 restaurant and foodservice jobs in Ohio account for 10 percent of Ohio’s employment – and that figure is projected to grow by 9.1%, or 53,400 more jobs, in the next decade.

So, where will restaurateurs find workers in this marketplace reality? Quite simply, restaurant leaders must adjust. If we thought the never-ending battle for customers isn’t hard enough, the behind-the-scenes competition for employees is likely to get more demanding.

ORA is developing ideas and solutions

  1. The best operators will “double down” on their culture, core values and attention to employee retention.
    1. They will offer the right compensation to be competitive, plus rewards, training and recognition.
    2. This will certainly be different for every restaurant and operators need to arrive at a unique blend that works, but we see winners in the labor battle placing a high value on current staff. They will achieve turnover rates that are lower than their competitors, which is important because low employee turnover typically results in great customer service, positive customer satisfaction, traffic growth and profits.
    3. In Ohio, we admire the incredible “people” success we see at Cameron Mitchell Restaurants, Roosters, Jeff Ruby Culinary Entertainment, Schmucker’s, White Caste and many others.
    4. We recommend studying the industry’s best and building a thorough people strategy – it must be focused, differentiated and enduring.
  2. The ORA is developing a Human Resources Center of Excellence, which will become a digital content library, as well as a hub for discussion, meetings and possible conferences addressing a broad range of HR issues, including workforce.
    1. Our ORA Human Resources Committee, which includes more than 20 industry experts, will guide the development of the center.
    2. Stay tuned for more on this soon and see our other centers here.
  3. The ORA is developing a Workforce Development strategy to help our members in Ohio and connect them with evolving resources:
    1. The Ohio ProStart® program, which increases the quality and employability of high school restaurant-management and culinary arts students by providing them with essential work-related skills, as well as career exploration and the opportunity to seek post-secondary education. The program includes an industry-backed curriculum to teach, test and award industry-recognized credential to students meeting high standards in foodservice and restaurant education. Take a look at our website at oraef.org.
    2. Our partnership with the National Restaurant Association Educational Foundation. By integrating classroom learning with real world job experiences, the foundation continues to develop innovations such as the Restaurant Career Path site. Check it out at careerpath.chooserestaurants.org
    3. ServSuccess is a new professional development program for restaurants involving formal certification that trains employees for specific restaurant career paths. Read more: servsuccess.com
    4. Development of our ORA Education Foundation College Consortium, which includes more than 20 post-secondary schools. We see the schools as critical partners in providing further training and skills for students who fall in love with the foodservice industry and are committed to education ranging from a certificate to 4-year degrees.
    5. Partnering with and supporting key groups focused on solutions, including Ohio’s Office of Workforce Transformation: workforce.ohio.gov

To learn more about this topic, read the following articles:

Economic Development Issue focuses on jobs and the hunt for workers

Restaurants facing ‘crisis’ from staffing shortages

See where Ohio ranks for restaurant jobs and projections for next 10 years