On the Line / Industry News / Report: Combat the Restaurant Worker Shortage with Technology

Report: Combat the Restaurant Worker Shortage with Technology

The 2022 restaurant labor shortage is a massive problem in the industry. Here's how guest-led technology can help.

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DISCLAIMER: This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You are responsible for your own compliance with laws and regulations. You should contact your attorney or other relevant advisor for advice specific to your circumstances.

The COVID-19 pandemic initiated massive change across the restaurant industry. Many restaurants were forced to close, and others had to make the challenging decision to let go of valued staff and reduce their workforce. Upon reopening, many understaffed restaurants have been unable to hire enough people, forcing them to cut hours or operate with fewer team members than necessary. According to the National Restaurant Association’s 2021 State of the Restaurant Industry, 9 out of 10 restaurant operators are struggling with staffing, with many operators reporting that staffing levels are more than 20% below normal.  

Up to 82% of restaurants, depending on restaurant type, have reported difficulties filling open positions in front- and back-of-house, according to the National Restaurant Association’s 2021 State of the Restaurant Industry, with many reporting staffing levels far below normal. What’s more, restaurants face challenges with staff retention and managing efficiency and data management.  Adding in the uncertainty of guest demand to the restaurant labor shortage, restaurants are lacking the information necessary to properly staff their restaurants.

Even prior to the pandemic, recruitment and retention have long been major challenges for restaurant owners and operators. Employee turnover has been a pervasive  issue throughout the 21st century in the restaurant industry – with more restaurant employees quitting than any other industry in 2021.

Why is there a restaurant worker shortage?

Unfortunately, there isn’t one obvious answer as to why this is happening. Instead, there are several factors that make the industry a hard one to make a career out of – low wages, hard workdays, arduous onboarding, and little room for growth, to name a few. Restaurants with every type of service model and every type of concept are facing this challenge. Put simply, many service industry workers aren’t interested in working in an industry that doesn’t value them. 

As the industry faces further hardship with inflation, rising food costs, and supply chain issues, such as the impact of the war on the global wheat supply,  it’s more important than ever to make careful, sustainable changes that will make a lasting impact on your business. These are key areas where technology, like Toast’s mobile dining solutions, can help. 

What are Toast’s Mobile Dining Solutions?

Toast's mobile dining solutions is a flexible suite that empowers any restaurant – no matter what their size, ambitions, or concept – to combat the labor shortage and adapt with mobile-first, guest-led technology such as mobile payments, digital menus, and mobile ordering. Digital menus and mobile payments make the dining experience easier for both guests and staff – letting guests scan a QR code to browse a menu, and pay, all from their mobile device. Toast Mobile Order & Pay™ takes it one step further – allowing guests to easily scan a QR code to browse the menu, order, and pay, all from their mobile device –which can help restaurants increase revenue, and drive higher tips. 

 And, guests' expectations and preferences are changing. The majority of consumers said they would be likely to access a menu on their phone via QR code or through a mobile option, and restaurants are adapting new technology to meet the need. According to Toast’s Market Survey, over 74% of quick service and full service restaurants plan to adopt digital menus and order and pay solutions to address these changes.

Toast’s mobile dining solutions add flexibility and unlock optionality in a time of labor shortage, rising costs, and volatile guest demand – so you can adapt and adjust your service model to operate more easily and efficiently. Restaurants are better equipped to navigate this labor shortage, increase revenue, and drive more tips when they use Toast’s valuable technology. And they’re able  to collect guest data on every transaction to keep guests coming back, and power their marketing and loyalty programs.

Offset open spots on staff

Fewer staff available doesn’t mean you’ll have fewer guests, and oftentimes restaurants have to function at normal capacity with diminished resources. With added mobile dining solutions, restaurants are able to operate when short staffed – relying on Toast Mobile Order & Pay™ as their backup server. Adding in technology solutions allows restaurants to rethink their service model to be more efficient, with servers focusing more on hospitality and building guest connections, and less on transactional tasks. With the new server started ordering feature, servers can now introduce Toast Mobile Order & Pay™, and then start the tab. Guests can then use the QR code on their table as a 'backup server' to add additional items to their order without having to flag down their server. For many restaurants, added technology has been a game changer. 

Take Café Gratitude, a plant-based restaurant group with locations all over southern California. Using a combination of Toast Go™ handhelds and Toast Mobile Order & Pay™, Café Gratitude has transformed their service model by combining the traditional touchpoints of hospitality with the efficiencies of technology. Servers used to cover 7 - 8 tables each with the traditional steps of service – taking orders, running back and forth to the point of sale terminal, delivering food and drinks, and processing payments. Now, each server floats between 12 - 15 tables at a time, focusing on answering questions, delivering orders, offering upsells, and connecting with guests – without having to focus on those other, time-consuming tasks. 

For full service restaurants like Café Gratitude, this can make a huge difference. On average, checkout using Toast’s mobile payments feature can save servers 4 minutes per table when compared to traditional methods¹. This means your team can serve more tables while saving time and energy in their daily tasks. 

According to one server at Café Gratitude, this made all the difference. “Normally, with the old model, it took me like 20 minutes to take the order and put it in the system,” they said. “Right now, it takes me  three minutes or less. And the kitchen is fast – it takes like eight minutes total for the order. I’ve never seen it faster.” 

For quick-service restaurants, the benefits are equally appealing. Long lines during a lunch rush can be difficult to manage, and it often takes multiple staff members just to take orders and process payments. With Toast Mobile Order & Pay™,  guests can skip the line and order from their device – speeding the process along for both guests and employees. Plus, with the SMS feature, staff can text guests when their order is ready. The flexibility is key here – restaurants can turn Toast Mobile Order & Pay™ on for busy days, and turn it off when they don’t need it.

Increase revenue

My employee retention is now through the roof, it’s pretty awesome.

Author

Danny Rosa

Manager, New England Lobster Market and Eatery

It’s no secret that margins in the restaurant industry are tight, with the average restaurant profit margin typically around 5%. The cost of losing one restaurant employee is around $5,000, on average, so with an 86.3% annual employee turnover rate, you could lose hundreds of thousands of dollars per year due to poor employee retention. Labor costs are also increasing as wages increase, and restaurants need to pay employees more in order to retain team members. 

Retaining employees and recouping these increased costs are key to the financial health of your business, and technology is an essential tool. Increasing revenue by  investing in the right technology means that restaurants can pay employees better, avoiding high turnover costs, and providing more enticing compensation packages. Faster table turn times, and the ability to serve more customers, and higher tips play a part here. Upsells are also key: Toast customers using Toast Mobile Order & Pay™ typically see an average 10% increase in revenue². Upsells are baked into every transaction. With popular items, menu filters, and simple modifiers, guests can upsell themselves, leading to higher check sizes. 

On average, check size is 9% higher for customers using Toast Mobile Order & Pay™ vs. standard dine in³. And, on average, QSRs with Toast Mobile Order & Pay™ typically see 8% higher revenue per labor hour⁴. Restaurants have also reported higher tips, and guests tip on 9% more transactions when they pay through Toast mobile payments vs. traditional checkout methods⁵. In quick service restaurants, the impact of added technology is equally impressive: on average, guests tip on 18% more transactions at quick service restaurants when they pay through Toast Mobile Order & Pay™ vs. standard checkout⁶. 

Danny Rosa, manager of New England Lobster Market and Eatery, saw the impact of these changes first hand at his restaurant. “Tips more than doubled,” he explained. “I split the tips between all the employees…there are dishwashers that are now making $35 an hour. They’re not going anywhere. My employee retention is now through the roof, it’s pretty awesome.”

Improve the guest experience 

With fewer front-of-house staff available to serve guests, and fewer back-of-house staff available to  fulfill orders, your guests’ dining experiences suffer. No one likes having to wait longer than anticipated – whether it's in line, for a table, a meal, or the check. Wait times are almost guaranteed to increase when you’re short-staffed, ultimately harming the guest experience.

These pain points are easily resolved with technology that your guests are ready and willing to use. According to the National Restaurant Association, a majority of consumers said that they would be likely to order and pay for food or beverages using a restaurant website, access a menu through a QR code, and pay using a contactless or mobile payment option. With Toast Mobile Order & Pay™, guests no longer have to wait to order, wait for their bill, or wait to pay. Instead, they can access what they want, when they want, right from their mobile device. 

When a guest arrives at a restaurant using Toast Mobile Order & Pay™, they can place their order as soon as they are ready. Drinks, appetizers, entrees, and desserts can be ordered at the discretion of the guest, with no wait and no sitting around. On the back end, the restaurant can easily 86 menu items when they’re sold out, no longer having to tell each server or guest individually when a special is no longer available. The fully integrated digital menus can be updated at any time, anywhere – also saving restaurants valuable printing costs. 

While browsing, guests can view images, item descriptions, and upsell options. The ordering process is easy and straightforward for the guest, and the built-in upsells are an extra plus for the restaurant.  And, checkout has never been easier – there is no need to wait for a server to drop off a check, pick it up, run the card, and return for a signature. Instead, this is all done through the guest’s mobile device, saving time for all involved. With Apple Pay, guests can pay in as little as 10 seconds – allowing your guests to dine and pay on their own time, no longer having to waste time trying to flag down a server. 

With Toast Mobile Order and Pay, your restaurant now has access to collect guest data on each transaction to power your marketing and loyalty programs – and generate up to $2,800 in sales per campaign with email marketing.⁷ These insights can be used by you and your staff to tailor guests' future dining experiences to their liking. Your guests will love the personalization, and your staff will love having access to insights that make it easier for them to do their job well. A better dining experience leads to better tips and regular patronage.

Ease into onboarding

When we moved to Toast, we could cut out a whole day of training.

Author

Joy Zarembka

Chief Operating Officer, Busboys & Poets

Working in a restaurant is hard – especially for employees newer to the industry. It’s fast paced and high pressure, and it can be intimidating trying to get up to speed as a new server. A strong orientation and onboarding experience is essential to the success of your new team members, along with showing them the ropes of the ins and outs of your menu, processes, and technology. 

For many front–of–house employees, memorizing dozens of menu items and modifiers can be the most difficult aspect of onboarding – not to mention incredibly time consuming. It can also be hard on the restaurant to figure out how to train and onboard in a quick, efficient manner, especially when it comes to seasonal staff. 

The ease of self-service onboarding with Toast Mobile Order & Pay™ has helped new staff get ready to get out in the dining room much faster. With an easy and intuitive interface, they’re able to understand the flow of orders, and the menu is right in front of guests at all times. Plus, you’ll decrease those newbie errors, saving your restaurant time and money almost immediately. 

Joy Zarembka from D.C.’s Busboys and Poets explained it this way: “Technology is really helpful for training,” she said. “For example, when we moved to Toast, we could cut out a whole day of training. It makes them super confident about all of the menu items, seeing less errors in front and back of house.” 

In a week-long training, those extra days can really make a difference. That’s one more day that you’ll have an extra server on the floor, and one more day that you’re paying a new hire to help guests, instead of memorizing a menu. 

***

The restaurant worker shortage is a complex issue, and there’s no quick fix. The restaurant industry is in desperate need of change, and that starts with individuals. 

For the restaurant industry, the key takeaways are clear. Restaurants need to put their staff at the forefront of their business, making it a priority to provide competitive pay, benefits, and work-life balance. Technology can provide the help restaurants so desperately need, increasing revenue to provide a great workplace and fair compensation, while offsetting those open spots on staff when necessary. Adjusting service models and introducing labor-saving technology can help address pervasive staffing issues, and provide a solution to a tough problem. 

Technology can’t replace humans, but can instead supplement your restaurant as needed, providing support, driving sales, and making your staff’s lives a little easier. Technology can enhance the overall dining experience, making it smoother and more efficient for you, and your guests.

¹ Based on Toast internal data from August 2021 among restaurants using Toast mobile payments. Individual results will vary. 

² Toast restaurants who add Toast Mobile Order & Pay™ typically see an average increase between 10% and 12% in Toast processing volume. Based on the average impact seen across different Toast restaurant segments. Based on at least 12 months of Toast internal data. Individual results will vary.

³ Based on Toast internal data from 2021 among restaurants using Toast Mobile Order & Pay™. Individual results will vary.

⁴ Based on Toast internal data from 2021 among restaurants using Toast Payroll. Individual results will vary.

⁵ Based on Toast internal data from 2021 among restaurants using Toast mobile payments. Individual results will vary.

⁶ Based on Toast internal data from 2021 among restaurants using Toast Mobile Order & Pay™. Individual results will vary.

⁷ Based on past performance of restaurants using Toast Email Marketing in Q3 and Q4 of 2021. The $2,800 represents average increase in sales in the 14 days following an email sent via Toast Email Marketing. The average open rate for emails sent via Toast Email Marketing is approximately 39%. Individual results will vary.

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