Labor shortages in 2023 are having severe effects on restaurant operators.
Why it’s important:
The inability to fully staff operations leads to poor customer service, which in turn affects profitability.
According to the U.S. Chamber of Commerce, employers are facing unprecedented challenges trying to find enough workers to fill open jobs. Right now, the latest data shows that we have 8.8 million job openings in the U.S., but only 6.3 million unemployed workers.
We have a lot of jobs, but not enough workers to fill them. If every unemployed person in the country found a job, we would still have around 4 million open jobs.
What is causing the restaurant labor shortage in 2023?
According to Svenja Gudell, chief economist at Indeed, “Demographic shifts and aging populations mean countries like the U.S. will experience an ongoing shortage of workers and hiring will remain challenging for years. Without sustained immigration or a focus on attracting workers on the sidelines of the labor force, these countries simply won’t have enough workers to fill long-term demand for years to come.”
The Silver Tsunami
According to Joe Brusuelas, chief economist at RSM, a consulting firm focused on small- and medium-sized businesses “This was the crisis we could see coming. The conditions that prevailed for almost our entire lives — excess supply of labor caused by the size of the baby boom — has now come to an end.”
“The onset of the pandemic, with the acceleration of the retirement of the boomers,” Brusuelas continued, “has created a confluence of events where we have a labor shortage that’s verging on a crisis, that’s going to cause big changes in firms, with respect to wages and flexibility, and public policy.”
Solutions to the restaurant labor shortage in 2023?
There are several short-term and long-term strategies that employers have available to them to combat their staffing challenges, including:
- The EB-3 Visa Program: Every qualifying restaurant operator should consider the EB-3 visa program. It ensures a long term, consistent supply of qualified, motivated entry level workers.
- Offer Benefits: Often, the most direct way to attract more applicants is by offering competitive benefits. Consider offering health benefits, paid time off, and other perks to make positions more appealing.
- Flexible Scheduling: Flexibility can be a huge draw for many workers. Allowing for split shifts, flexible start and end times, and accommodating school or family commitments can be very attractive to potential employees.
- Training and Development Opportunities: Investing in employee growth can lead to increased retention and attract new hires. Offering training, whether it’s in-house or through external programs, can be beneficial.
- Streamlined Operations: Use technology to reduce labor needs. Point-of-sale (POS) systems, online ordering platforms, and kitchen automation can improve efficiency.
- Hiring from Underrepresented Groups: Look for potential employees in groups that may typically be underrepresented in the workforce, such as retirees, people with disabilities, or ex-offenders.
- Apprenticeships and Internships: Partner with local schools or organizations to offer apprenticeship or internship opportunities, giving people hands-on experience and a potential pathway to long-term employment.
- Enhance Work Culture: Fostering a positive work environment, offering recognition, and building strong team dynamics can make a big difference in both attracting and retaining staff.
- Referral Programs: Offer bonuses or other incentives to current employees who refer successful new hires.
- Temporary Workers and Staffing Agencies: Use temporary staffing agencies or platforms that connect restaurants with freelance or gig workers for short-term needs.
- Community Partnerships: Collaborate with local community organizations, job centers, and educational institutions to reach potential employees.
- Reassess Job Requirements: Sometimes, strict requirements can limit the applicant pool. Evaluate if there are certain criteria that can be relaxed without compromising the quality of service.
- Promote from Within: Before looking outside, identify potential leaders within the existing staff. This not only helps to fill higher positions but also motivates the staff as they see growth opportunities.
- Focus on Retention: Reducing turnover is as critical as hiring new employees. Engage with current staff to understand their needs and concerns, and address them proactively.
- Feedback Loop: Regularly solicit feedback from staff on the ground. They might have insights or suggestions that can help in hiring and retaining workers.
Finally, it’s essential to understand that these strategies may need adjustments based on the unique needs and circumstances of each restaurant. The labor shortage is a complex issue, and it’s vital to be adaptable and open to new approaches as the situation evolves.