In today’s employment market good help is hard to find. And the current state of employment in the US directly affects your restaurant business. Of course, as a restaurant owner, you want to stay afloat despite any potential difficulties. It’s important to stay in-the-know about current industry trends and realities in order to adjust accordingly. Today we’re discussing the state of the employment industry as it relates to the restaurant industry & what all of it means for your restaurant.
Low Unemployment Rate
The unemployment rate is currently holding steady at a record low at 4% (the lowest it’s been in 17 years). This is a great thing for our economy but can pose threats to your restaurant business. If everyone has a job, they don’t need a new one! Despite the unemployment rate, the restaurant industry continues to grow at a rapid pace. There are too many positions available and not enough talent, which really makes it an employment seeker's market. This notion means that candidates might strategically negotiate higher wages because they know restaurants desperately need roles to be filled. And if a potential new hire isn't happy with your offer, they might just go across the street to another restaurant to negotiate for a higher wage. Current minimum wage varies; you can see the current minimum wages by state here.
Without enough employees, you’ll find it even more difficult to keep running your operations smoothly. That’s why creating a solid company culture is ever-so important. Although it may currently be a challenge to bring on new employees, you should also focus on keeping the ones you already have happy. A business is strengthened by its people and without your staff, you'd have to close up shop.
Ideas for Increasing Employee Longevity:
- Offer ongoing training opportunities
- Create some attractive company perks and incentives
- Establish an open line of communication between owners and employees
High Staff Turnover
Another factor, the elephant in the restaurant dining room, is high staff turnover. As a restaurant owner, you know it exists. We discussed staff turnover in our blog on company culture and offered up some ideas on how to improve your restaurant’s culture.
Unfortunately, the hospitality industry sees over 70% in turnover rates. There are many factors that contribute to this in restaurants.
Many restaurant workers are part-time, using it as a first job opportunity and as extra cash while they’re in school. On the other hand, some employees discover that the long and demanding work hours just aren’t for them.
Plus, many restaurant industry jobs are tip-based, which can prove to be an undesirable source of income for some workers. And when it comes to tips, the current tip debate may pose additional threats. Although some believe that having a pricing model where the tip is already factored into the cost can help mitigate tip theft and other issues, others are standing strong against it. According to the article by Food & Wine: "Some servers say this means lower wages and more turnover."
The turnover percentage varies based on restaurant type as well, with fast-food restaurants experiencing the highest rates.
According to the National Restaurant News:
[Turnover among limited-service restaurants is 153 percent, including a 60-percent turnover rate among managers. Full-service restaurants have a turnover rate of 101 percent, with managers churning at a 37-percent rate, he said, citing data from Dallas-based analytics firm TDn2K.]
The cost of turnover is detrimental to restaurants, as rehiring and retraining are an ongoing burden for your finances and resources. This is another reason why keeping your current employees happy is extremely important.
Of course, not every employee is going to stick around for a lengthy tenure, but it’s wise to have a plan in place for keeping workers around. Creating a solid and desirable company culture can help your employees see the benefits of working for you.
Ideas for Boosting Company Culture:
- Fun, interactive team outings
- An inviting break room
- Consistent check-in one-on-one meetings
Current Government Status
The government’s crackdown on immigration laws is also influencing the restaurant industry’s hiring pool. Since 2017, seasonal work visa allowances for immigrants has lowered. An article by The Sand Paper states:
[Prior to the Trump Administration, the U.S. would allow some 66,000 non-agricultural workers to work seasonally on what’s called an H-2B Visa, where business required more labor than the local workforce could supply. Traditionally, workers who returned season after season weren’t included in the 66,000 cap.
These are legal, temporary immigrant workers who are taxed. They return to their home country at the end of the season.
The current administration decided to keep the cap at 66,000, which has left many U.S. businesses scrambling, particularly ones that are busiest in the summer. In May, the Department of Homeland Security raised the cap, allowing another 15,000 workers. But for some businesses it may be too late.]
With fewer workers on visas allowed into the country for seasonal work, there are even fewer options when it comes to temporary hiring. Businesses, especially those who boom in the summer months, are finding it difficult to fill roles even for a short length of time.
Aside from legal immigrants, illegal immigration is being closely looked at as well. Undocumented workers are aplenty in the restaurant industry, but their potential deportation poses even more of a threat to restaurant staff numbers.
Studies from 2017 show that immigrants make up 17% of the US labor force, with almost one-quarter of those workers being undocumented. Pew Research finds that if immigration declines, the workforce numbers will fall along with it. As Baby-Boomers phase out and the US birth rate remains low, there are less homegrown citizens in need of work. It’ll be important to keep tabs on the state of immigration laws and how they evolve to see how they’ll impact the workforce.
Piecing it All Together
It’s no secret that there are many factors making hiring and maintaining employees difficult in the restaurant industry currently. As a restaurant owner, you’re probably feeling the effects. If your business has had a history of high-turnover, consider some of the suggestions we’ve made for keeping employees around longer.
Work as an Experience
Today, employees aren’t just looking for a paycheck; they want incentives and benefits that make the job worthwhile. Implementing even the smallest of changes to make the work environment more enjoyable can help keep workers around longer.
Giving your employees additional opportunities to learn an advance can prove to be beneficial. Ongoing training and education can inspire workers to climb the ladder at your company instead of going elsewhere. Providing opportunities to learn shows that you care about their career path.
Preparing for the Inevitable
Of course, turnover is always going to be a factor in the restaurant industry. How you deal with it will help in the long run. If you have a tried and true training strategy mapped out, it will be easier and faster to bring on new employees. Make sure that your training staff is well-educated and prepared to take on new hires.
When it comes to immigration laws, there isn't much that we as common citizens can do about them. But, instead, the restaurant industry should prepare to adjust.
Get creative when recruiting new employees. Showcase what makes your restaurant unique and provide reasons why prospects should work there. Make sure that the application process clearly shows your brand identity and highlights your strengths. Be transparent during the interviews so the candidate knows exactly what to expect from the start.
Referrals are also a great way to reel in quality employees. Ask current driven employees if they know anyone who would be a great fit. Of course, you should incentivize the employees who gave you the recommendation if you decide to hire their referral.
Don’t just hire to hire, hire because you see the individual as a great fit for the company. Although these ideal employees may be hard to find, they have more of a chance of lasting longer.
The employment landscape is always changing, but as a restaurant owner, you need to know how to adapt quickly in order to stay afloat. It’s important to be aware of current employment rates, industry turnover percentages, and government regulations. Being informed and prepared will aid you in making more informed decisions so you can hire smarter and keep employees around for the long haul.
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