According to a recent study, 59% of restaurant owners and operators cite recruiting, hiring, and retaining top-notch staff members as their number one operational obstacle in 2018.
Whoa, whoa, whoa – pump the brakes there for a minute: the unemployment rate in the U.S. just dropped to 3.9% and the restaurant industry generated $799 billion in sales last year. Those stats wouldn't be possible without front and back of house staff nationwide creating memorable dining experiences for guests night after night.
Well, yes and no.
Though the restaurant industry as a whole is booming, it's largely because there are too many players in the space. This market over-saturation may be great on a macro level, but it's causing some serious issues on a micro level – particularly when it comes to staffing.
While restaurant-goers are enjoying the endless options to choose from – by this math you could, quite literally, go to a different restaurant every night for the next 1699 years (that's not including ghost kitchens) – it's putting both new and long since established restaurants in a proverbial chokehold.
"In spite of its sustained growth over the past three decades, the restaurant industry has experienced one of the highest business failure rates among the retail and services industries," writes Professor H.G Parsa, co-author of Why Do Restaurant's Fail? Parts I – IV.
26.16% of restaurants fail within the first year of opening; if you make it past the one-year mark, there's still a chance you end up a part of the 19% of restaurants who fail within the second year or the 14% of restaurants who shut their doors in the third year.
According to Parsa and his co-authors, a nearly 30% restaurant failure rate equates to approximately 9,000 restaurants closing in the U.S. each year.
That's a hard statistic to swallow when your dream's on the line.
A key element of running a successful restaurant is an empowered, adept staff; finding and holding on to people who move your vision forward is difficult to do when they have many, many restaurants to choose from. It's a buyer's market right now.
So, where does that leave you?
You need to find ways to attract the candidates you want, not just the candidates you need, because you're feeling the short-staffed squeeze. On The Toast Restaurant Management Blog, our friends at 7shifts covered the restaurant labor shortage that's affecting the industry at present, and ways to overcome it.
Jess Reimer poses it perfectly, "Today, few managers have the luxury of kicking back and watching resumes roll in; instead, they’re out actively sourcing from unlikely places and designing incentives and benefits programs that suggest restaurant work is not 'just a job,' but rather a career (and a good one at that)."
You can't rest on your laurels in this climate; your business needs to find new ways to stand out from the crowd to prospective staff members – and fast. You don’t want to be a part of 2018’s pool of 9,000 restaurant closures.
Here are three ways to recruit, hire, and retain the restaurant staff candidates you want — so you never have to deal with the dreaded no call, no show.
Undoubtedly, this is the heaviest lift of the list.
There's a reason the labor force is swerving shift work – the model's broken, and the numbers don't lie.
"Servers, bussers, cooks, hosts, and dishwashers tend to turnover within two months of their first day, and chefs typically stick around for about three months before they decide it’s time to move on," outlines Jess.
Here are two new employment models shaking up the restaurant status-quo:
Option 1: Hospitality Included
Restaurant staff aren't sticking around because they don't see a reason to. They have no stake in the success of the business, no substantial tie or incentive to put effort toward bettering the restaurant's sales performance.
You could argue that tipped wage workers understand there's an implicit incentive to work your hardest and decrease your table turn time in order to get more checks and have the shot at increasing your gratuity percentage.
Groups like Union Square Hospitality don't agree with that line of logic. Danny Meyer's team introduced a hospitality-included philosophy into their operations because they believe tipping is an inherently flawed system; the rollout took place in 2015.
"Our entire company has been engaged in a robust conversation about how we can provide even more meaningful career opportunities and advancement for our 1,800 employees. It has become increasingly clear to us that a major obstacle in this endeavor is the practice of tipping.
There are countless laws and regulations that determine which positions in a restaurant may, and may not share in gratuities. We believe hospitality is a team sport, and that it takes an entire team to provide you with the experiences you have come to expect from us. Unfortunately, many of our colleagues — our cooks, reservationists, and dishwashers to name a few — aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants,"writes Danny Meyer about the switch on the USHG blog.
A hospitality-included model calls for an increase to your menu's overall pricing in order to shift revenue to cover an increased investment in labor toward both front and back of house.
Option 2: Open Book Management
Another model worth considering shifts your business to an open-book management and profit-sharing model. ReThink Restaurants, powered by Henry Patterson and his team of open-book evangelists, engage their clients in a 35-week course that – amongst other things – gives staff members access to the restaurant’s financial reporting and the skills needed to understand the numbers and how to improve them.
The average American restaurant sees a 5% or less profit margin; Henry and ReThink Restaurants consider 10% basic health, seeing the majority of their clients hover in the mid 20's. Once ReThink Restaurants’ clients surpass the 10% profit margin benchmark, the restaurant engages in a profit sharing model, further incentivizing staff members by giving them a slice of the profit pie.
To learn more about ReThink Restaurant and the open book management strategy, including takeaways from founder and former restaurant owner Henry Patterson's 40+ years in industry, sign up forThe No Call No Show, a limited-series podcast by Toast.
If you're having trouble finding the right candidates for your restaurant staff, why not learn from someone whose title says it all: a recruiter.
In the corporate sphere, it is a recruiter's literal job to fill open roles in an organization. In dense industries where candidates have their choice of the litter, you need to find every way to stand out to job seekers as a gainful work environment.
Alex Mimms, a Technical Recruiting Team Lead at Toast, suggests restaurants turn the focus inward and establish your restaurant's brand, mission, and vision. Leaning on your values to attract like-minded job seekers is an effective tactic the Toast recruiting team leverages.
She also encourages restaurants to tap into the power of their existing employees' networks; simply put, people want to work with people they like, so incentivize restaurant staff to refer their friends and professional connections to work in your restaurant.
Besides friends, a second approach to establishing an employee referral program is to seek out the employees on your staff who embody everything you want in a candidate and ask if they have former co-workers whom they admired or especially enjoyed working with. Encourage them to refer whomever comes to mind; by doing so, you're more likely to get a strong, candidate who is pre-vetted by someone you trust and value as a member of your team.
Emily Scichilone, a National Recruiter for Year Up, suggests restaurant owners try recruiting passive candidates in The No Call, No Show podcast. Though a person may not currently be seeking out new roles, that doesn't mean they aren't open to a switch... if the right opportunity presents itself.
If you're out to eat and have a truly amazing server or bartender, encourage them to stop in for an interview.
Millennials comprise approximately 1/3 of the American workforce.
It's important for employers to play to their preferences in creating and marketing their restaurant as prospective workplace for millennials (and Gen Z).
It's widely known that millennials lead the charge when it comes to adopting new technology; they expect to work in an environment that incorporates the latest technology available, enabling them to do their job as quickly and as easily as possible.
As a prospective employer, investing in the latest restaurant technology is not only good for your bottom line, it's also a solid way to market your restaurant as a progressive, tech-savvy place to work.
One specific element of restaurant operations where technology can have a huge impact is the facilitation and management of your employee scheduling strategy. Scheduling is a pain, both for restaurant operators and restaurant staff members; it can also be a huge turn-off for prospective employees.
As Joe Hannon – a former restaurant owner turned restaurant-tech product developer – points out, investing in software to manage your employee scheduling processes can have a huge impact on your employee retention.
Via Restaurant365, restaurant staff members are able to view their schedule from a mobile device, message fellow staff members, pick-up and drop shifts, check their hours, and more. Providing restaurant staff with an easy-to use solution that takes the headache out of scheduling is a huge selling point for job seekers.
No one wants to work in an outdated environment, especially in an industry like restaurants, where change is constant – and happening at an incredibly fast speed.
As restaurant consultant Ryan Gromfin says, “technology was created to make our lives easier.” Incorporating the latest restaurant technology into your operations – whether that be to streamline back office headaches, help servers decrease table turn time and increase gratuities, or to create an organized system in a traditionally unorganized area of the business (cough, cough inventory) – shows existing and prospective staff members your team is future-focused, proactively leading the charge in testing new ways of running a restaurant.
It’s way more enticing to join a team that’s future-focused than a team who’s stuck in the past, because it’s likely that’s where they’ll stay.
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