Restaurants have always walked a fine line when it comes to turning a profit. Foodservice businesses have notoriously high overheads, meaning that even in the best of times, profit margins remain relatively slim. Traditionally, restaurants relied on a relatively abundant labor pool in order to keep costs within acceptable limits.
Unfortunately, this labor pool has grown drastically smaller in recent years. As a result, many restaurants in the D.C. area are finding it harder and harder to attract and retain qualified employees. This article takes a closer look at three impacts of this labor shortage, as well as what you can do to help your restaurant weather the storm.
Given the tight margins in the foodservice industry, restaurant employees typically earn less than those in other professions. This disparity has played a large part in the current labor shortage, especially as the cost of living in major American cities rises at a disproportionate rate. Simply put, many former restaurant workers have chosen to pursue more lucrative career paths.
To counterbalance this problem, many parts of the country have increased minimum wages. For instance, in 2018, Washington, D.C. voters chose to increase the minimum wage for tipped workers from $3.33 an hour to $12.50 an hour. On the surface, such changes would seem to incentivize restaurant workers, thus reducing the labor shortage.
Yet such wage increases often work against employees’ best interests. To offset higher wages, restaurants often have to raise prices — which may drive away customers, or make them less willing to leave generous tips. Alternately, many restaurants have to reduce the number of staff. In such cases, the pay hike may not be enough to compensate for increased workloads.
The restaurant labor shortage isn’t just the result of low wages. Many former and current food service workers also cite poor mental health as one of the most significant drawbacks of the profession. Such stress may stem from long hours, intense physical exertion, abusive customers, and poor treatment from co-workers.
Restaurant owners cannot control all of these factors — restaurant work will always be somewhat fast-paced and physically demanding. Yet smart owners have responded to the labor shortage by placing an increased emphasis on the support provided by their managers. Basic emotional support skills can go a long way in the restaurant industry.
A well-trained manager can play a huge role in reducing employee stress. Likewise, good managers know how to arbitrate conflicts between staff members in a fair and respectful manner. By ensuring that your management team has the skills necessary to offset employee stress, you can reduce the amount of turnover at your restaurant.
Alternative Labor Sources
As the traditional labor pools have dried up in recent years, many restaurants have turned to alternative sources of potential employees. One of the most promising new solutions — as well as one of the most forward-thinking — was recently implemented by the National Restaurant Association Educational Foundation.
This nonprofit venture is using grant money from the Department of Labor to provide food service training to young adults currently serving prison sentences. The goal is to give these 18 to 22-year-olds the entry-level skills necessary to find jobs upon their release. So far, the program has been rolled out in four cities, including Richmond and Hampton Roads, Virginia.
Not only does the program help disadvantaged youth reintegrate in society, but it also benefits restaurants in two key ways. First of all, it provides an inexpensive and eager labor source. Second, restaurants who participate in the program become eligible for special tax breaks.
In order to remain lucrative and keep their doors open, restaurants must be prepared to think outside the box when it comes to hiring new workers. For more information on what it takes to survive in today’s restaurant industry, contact the experts at NSB Restaurant Equipment.