(NewsNation) — “Help wanted” signs are now ubiquitous at many of America’s restaurants, and the pandemic and Great Resignation made worker shortages even more common.
“Given the onset of remote (work) that COVID brought on, a lot of people have more options for jobs,” said Vivian Wang, founder and CEO of Landed, a firm that helps hundreds of restaurants hire workers.
Annual turnover rates in the restaurant industry were always high, sitting around 130% prior to the pandemic, Wang said. But now, she estimates that rate is closer to 200%.
The job market is more competitive than ever, and workers now have more power to shop around for jobs.
“It is 100% an employees’ market,” Wang said.
For that reason, many companies have boosted wages to keep up. Data gathered by the restaurant publication TastingTable found that the average hourly wage for U.S. restaurant workers jumped around 20% between the summer of 2020 and the summer of 2022.
Restaurants have pursued a range of strategies to finance these wage increases. One couple who founded a cafe in Portland, Maine, decided to decline the use of expensive scheduling and reservation software and even use the laundromat next door to wash their table linens in order to pay their employees the state’s full minimum wage (restaurant owners often pay a lower wage for tipped employees). They also added a 20 percent service charge so customers could help cover the cost. Their workers earn at least $20 an hour plus tips.
Crowdfunding to pay for health benefits
When Tanner Agar, owner and CEO of the Dallas, Texas-based restaurant Rye and cocktail lounge Apothecary, was struggling with hiring workers, he decided he had to do something new.
“One of the biggest moves we’ve made is adding paid time off and health insurance for every single full-time member of our team, which is not something you see almost anywhere in restaurants, and particularly here in Texas,” he explained.
So beginning early this year, Agar initiated a 3% charge for all checks to help pay for health insurance for full-time employees. The charge is automatically applied, but customers can choose not to pay it if they do not wish to do so.
Twenty-two out of his 37 employees currently qualify for the benefits.
Although the policy has only been in place for a few weeks, Agar said he’s already seeing an impact.
“From a recruitment standpoint, we’ve had a couple of open positions we’ve wanted to fill, and I’ve had more interviews over the last two weeks than ever before. We are definitely getting more applications and people saying they want to be part of what we’re doing,” Agar said.
What’s more, the policy hasn’t provoked any major customer backlash yet. “We do want to give them the opportunity to opt out. But so far, not a single guest in either location has asked us to do that,” he said.
Supporting affordable housing
Some restaurant owners have opted to provide affordable housing options for their employees as a recruitment tool to help cover the cost of living.
Erin Eddy, who owns Ouray Brewery in the mountain town of Ouray, Colorado, started leasing out properties to employees to subsidize their rent.
“When COVID hit, there was this flight of people from cities, right? From the East Coast, West Coast, South … they came down here and bought all the real estate,” he said.
But despite a larger pool of candidates, his workforce was often displaced by the high cost of housing.
So Eddy started subsidizing rentals for employees. At one point, he had 17 bedrooms under rent; he would negotiate with employees about how much they could pay so the arrangements differed person by person.
But he still faces difficulties attracting workers and the number of employees for whom he’s subsidizing housing has fallen to seven.
“I can’t find workers right now. And it’s extremely frustrating,” he said.
Some employers are testing out different work schedules to give workers more days off while remaining full-time. These include shifts to four-day or even three-day workweeks — something one Chick-fil-A franchise in South Florida recently adopted.
“They can plan their life around it — vacation, child care, school. I wanted them to be able to look out six months from now and know what days they were going to work,” Justin Lindsey, who owns the Chick-fil-A in Kendall, Florida, told a local news station.
Lindsey said his workers were surprised they wouldn’t be “on call” during their days off to come in on short notice if the restaurant is understaffed, a practice that’s common at quick service restaurants and among large retailers.
He did acknowledge that the longer shifts required some adjustments, but since most of his employees who worked three days per week already were accustomed to long days, the additional time was manageable.
Months into the experiment, the plan is going better than expected.
“For (workers), it’s great because they know what the schedule is, and for us it’s great because we can stretch the shift to cover all our peaks during the day,” Lindsey said in the news report, explaining that the store has been receiving a huge number of employment applications.
But the move to a condensed week may not be a cure-all.
One of Wang’s clients, Blaze Pizza, recently moved to a three-day workweek that is set up for Friday through Sunday. But Wang said there was low interest in adopting the new week among both current employees and potential employees.
“Candidates may prefer more balanced schedules throughout the week,” she said.