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Negotiating the Labor Challenge

The last two years have been more than a struggle for the restaurant industry. First with restaurants closing for months without any indication of their future followed by reduced capacity restrictions limiting the number of guests allowed in restaurants. To complicate the situation even further, many cities now require guests to show proof of vaccination to enter an establishment.

As if the business hasn’t been difficult enough, the restaurant industry is now faced with one of the toughest labor shortages in history.

According to the Bureau of Labor Statistics, the restaurant industry is still faced with a shortage of 750,000 employees compared to the pre-Covid levels of staffing. In August 2021 nearly 30,000 food service workers quit their job daily or 6.8% of food service workers left the industry.

As businesses attempt to return to normal, the challenge of finding qualified help or any help has become the new headache for foodservice operators.

It seems like not that long ago; restaurant operators were fearful of the push for $15 per hour as a starting minimum wage and the impact it would have on the financial wellness of the operations. Today, most operators would be happy to be able to find experienced staffing for only $15 hours, but today’s interviews are more like a hostage negotiation than a job offer.

Today, restaurants and foodservice operators are not only competing with each other, they are competing with every business that requires entry-level or minimally skilled labor. With convenience stores offering $18 per hour along with a sign-on bonus, it’s difficult for many smaller independent operators to attract good associates. With profits margins already razor-thin, the only way to afford such wages is to pass it on to the customers. With food price increases at 6% year on year, the customers can only handle so much of an increase in the prices they pay.

Operators are forced to reevaluate how they approach their business. Many businesses have reduced hours, begun to close more days, or have switched to take-out only in order to reduce overhead and to get around the labor shortages.

As more and more people return to the workforce, many are choosing to seek employment outside of the hospitality industry. The good news is, there has been a slight increase in people beginning to return to the industry. The problem is applicant salary expectations seem to well exceed their ability and skills.

While it is difficult to be patient when you are short multiple positions, I refuse to be held hostage by unskilled applicants. This week I had a prep cook demand $26 an hour or he would leave. Not only will I not meet his demands, but I have accepted his resignation and will hire a replacement to prevent him from poisoning the well of other associates.

None of us are in a position to lose employees, but we cannot be taken advantage of or set the standard for other associates to also make such demands. In a time when the employment pool is at an all-time shortage, we cannot be afraid to draw the line and hold our ground on such outlandish demands.

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