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Tips for navigating the restaurant labor shortage

Matt Crawford image
By Matt Crawford
Jun 17, 2021 min read

Restaurant owners know what it means to be resilient. Whether it’s cash flow, equipment malfunctions, or a shortage of customers, they’re always adapting to difficult situations.

While the worst of the pandemic may be behind us in the U.S., those that are re-opening or starting over as states lift capacity restrictions on indoor and outdoor dining continue to face a big challenge — a labor shortage.

Why is there a restaurant worker shortage?

Employee shortages in the restaurant industry aren’t new. For years, low wages and a high-stress work environment have made it difficult for restaurants to hire workers, but COVID-19 has made the problem even worse. 

There are the workers laid off at the beginning of the pandemic who found employment in other industries. 

Others are fearful of returning to work due to the risk of contracting COVID. Aside from the illness itself, workers fear lost wages and potential medical bills.

And some are receiving unemployment benefits that cover their expenses. They don't need or want to return to work yet.

So how can restaurant owners stay competitive and beat the shortage of employees?

Out of the frying pan: How restaurants can navigate through employee shortages

Izzy Kharasch, a consultant for the restaurant industry and president of Hospitality Works, is working with restaurants in 12 states. He says there's a labor problem in every one of them.

While there's no one-size-fits-all solution for owners who need to hire staff, Kharasch shared his top tips for attracting and retaining employees during the shortage.

Offer bonuses

They're not just for corporate America or professional sports teams. Owners are giving bonuses to new employees who stay on the job for a certain amount of time. They’re also rewarding existing employees who refer applicants that stick around.

Hold a job fair

If you post help wanted ads for servers, bussers, food runners, line cooks and dishwashers to online job boards, you're not alone. But those ads often go unanswered.

"What has been a little bit more successful for us — instead of just putting ads out there — [is to] put together a full-fledged job fair," Kharasch said.

Instead of posting an ad to Facebook and hoping someone responds, he works with his clients to advertise job fairs at the restaurant. They spend a couple of weeks hyping it up on social media to build interest and encourage people to share the information with job seekers.

On the day of the fair, the restaurant provides food and drinks for applicants while they fill out paperwork and wait to be interviewed. By the time an applicant leaves, they know whether they have a job and when to come back for their first day of work.

Streamlining the process has helped attract candidates who might otherwise get away. "If we say we'll call you tomorrow, it's too late," Kharasch said.

Improve the culture

Employees want to be valued and treated with respect, but running a restaurant is stressful. And in the hustle and bustle of cooking and plating food, turning over tables, washing dishes and negotiating with vendors, that doesn't always happen.

If you criticize employees in front of guests or side with customers with unreasonable expectations, consider making changes.

"If they have high turnover, [owners] really need to start looking at themselves and their managers," Kharasch said. "We're listening a lot closer to the hourly employees than before."

If an employee makes a mistake — it happens — and you need to speak to them about their performance, do it in private. Handle it the way you'd want your boss to treat you if the roles were reversed.

A little respect and a kind word can go a long way.

Accommodate scheduling preferences

Ask for your employees’ input on their schedules. For many workers, it's less about the money and more about their lifestyle. 

"We get a lot of employees who have worked at other places. And the whole reason they're looking for another job is that while they're making good money, they're making good money but not seeing their kids," Kharasch said.

He recommends asking what employees want in terms of lifestyle. Listen to what they tell you about the days and hours they're available to work. 

Then, do everything you can to honor their wishes. It might mean hiring eight part-time workers instead of four full-time employees.

But, if your restaurant is fully staffed, your employees are happy and turnover is low, it's probably worth it.

Think outside the hiring box 

As a veteran of the U.S. Army, Kharasch encourages his clients to talk to their local American Legion, Veterans of Foreign Wars (VFW) and other organizations that serve veterans for potential employees. 

It might not be the first place you'd think to look, but he says his clients have had some luck getting veterans to come and work.

Take advantage of technology

As the shortage of employees persists, Kharasch and his clients are turning to technology to fill in the gaps. 

They're exploring switching to QR codes, which is a barcode linking to an electronic menu. It allows patrons to scan the codes using their phones, place orders and pay at the end of the meal without a server.

Customers choose what they want to eat and drink, and their order prints out in the kitchen and bar. When the food and drinks are ready, runners bring them out to the table. 

At the end of the meal, diners can pay at the table, using the same system.

Have the right business insurance

Running a restaurant is tough enough. Give your employees and yourself some peace of mind.

Whether you're ramping up to meet increased customer demand as the economy opens back up or you're just getting started, it's important to have the right business insurance for your restaurant.

A shortage of employees also means your current employees are doing double-duty. They’re moving faster and working harder to compensate, increasing overall risks. 

Having the right restaurant liability and commercial property insurance protects you, your employees and your kitchen from unexpected events and takes the worries off your plate.

Most states require businesses with employees to have workers' compensation coverage, which helps protect you if they get hurt on the job.

For example, if an employee slips on a puddle of water in the kitchen, falls and breaks their arm, workers’ compensation will help pay for their medical bills and lost wages until they can return to work. 

Generally, you’ll want to update your coverage to match your business needs. This includes hiring new staff, giving bonuses and raises or moving staff into different roles.

How restaurants and bars can get the insurance coverage they need

Dealing with worker shortages and hiring new staff will never be the best part of your job. While Next Insurance can’t wave a wand and give you a highly trained team, we can ease some of your worries.

At Next, you can purchase workers' compensation insurance and other policies, including general liability, commercial property and commercial auto, online in less than 10 minutes.

We'll ask you a few questions about your business and show you your policy options. Select the one that's right for you, make a payment and get your certificate of insurance immediately.

If you have questions, our licensed, U.S.-based insurance professionals are ready to help.

Get an instant quote today.

Matt Crawford image
By Matt Crawford
Matt Crawford is Associate Content Director at Next Insurance and a small business insurance specialist.
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