4 Driving Factors Behind the Restaurant Worker Shortage

Restaurant work isn’t working for many Americans. Here are four problems to address as you try to rebuild—and retain—a high-performing staff.

  • Cutting federal unemployment benefits didn’t significantly reduce the labor shortage last year. There’s more to it than that, a Black Box Workforce Intelligence report, found.
  • Restaurateurs who want to staff up will have to pay more, offer more flexibility and address problems with abusive managers, co-workers and customers.

Related: 5 ways to reduce employee turnover at your restaurant

By Rick Hynum

Where have all the job hunters gone? They’re still out there, but for the first time in a long time, they’ve got the upper hand in the current market. And they see restaurant employment as one of the less enticing prospects, according to an August 2021 Black Box Workforce Intelligence report. But if you think it’s all about pay or higher unemployment benefits (or just plain laziness), think again. The current reality, the report found, is that restaurateurs who want to staff up and stay that way will have to accept that business as usual just might not be good for business anymore.

For a while, many restaurateurs blamed the labor shortage on enhanced unemployment benefits, but most states have now reduced those benefits to pre-pandemic levels, trying to push Americans back into the job market. The Black Box Workforce Intelligence Report found that cutting those benefits didn’t significantly reduce the labor shortage last year. If anything, restaurant turnover rates kept spiking, and voluntary quits hit an all-time high, “leaving restaurants scrambling to retain the staff they have,” the report noted. In fact, a record-high 1 million restaurant and hotel workers quit their jobs last November, according to the U.S. Bureau of Labor Statistics.

In its 2022 State of the Industry Report released earlier this year, the National Restaurant Association projected that the foodservice industry would add 400,000 jobs this year and hit $898 billion in sales. But today’s restaurant workers will continue to have higher expectations from their employers. Common concerns include compensation, scheduling flexibility and arranging for childcare. For some, the issues run even deeper, such as sexual harassment and emotional abuse from their managers, co-workers and customers.

But money is clearly a major concern for hourly workers, Victor Fernandez, Black Box’s vice president of insights and knowledge, told Nation’s Restaurant News. “We see now that states with the highest minimum wage have the lowest turnover rates.

“In essence,” Fernandez added, “companies are recognizing [increasing compensation] is what they have to do, but the challenge is that costs are going up, not only from the labor side, but also on the food side. So a lot of restaurants are feeling the squeeze there.”

Seeking Solutions

Fortunately, there is some good news: 66% of workers would return to the restaurant industry “if the right conditions were met.” The Black Box report report, which included a survey of 4,700 former, current and hopeful restaurant workers, identified four driving factors in the restaurant staffing shortage and offered suggestions for attracting new employees.

1. Wages and benefits: The vast majority (87%) of the survey’s respondents said they want to earn a set livable wage rather than rely on tips. The five most important things they’re looking for in a new job:

  • Starting hourly wage
  • Promotion opportunities
  • Flexible schedules
  • Health benefits and paid time-off policies
  • Company culture/work environment
  • To attract these workers, the report recommends offering:
  • A cash bonus to new hires
  • A cash bonus for interviewing for the job
  • A retention bonus for staying with the job after a certain period of time
  • A free meal at the interview
  • The report also recommends highlighting benefits or perks in your job postings and making it clear that you’re offering higher incentives.

In a Black Box survey of potential, current and former restaurant workers, 87% said they want to earn a set livable wage rather than rely on tips.

2. Childcare: According to the report, 35% of current hourly workers and job seekers are parents, and 18% of unemployed hourly workers had to leave their job to take care of family and children. The COVID-19 pandemic made things worse for parents, forcing many to stay at home to look after their children due to school and daycare closures. The report offered the following advice to restaurateurs looking to hire working parents:

  • Highlight scheduling flexibility in your job description if you offer it.
  • Talk to your staff about their childcare responsibilities and look for ways to support them, including adjusting their hours.

3. Opportunities in other industries: During the period of 18 months (2020 and 2021) covered by the Black Box report, many hourly restaurant workers said they hadn’t left the workforce—they had just given up on the restaurant industry. “Voluntary turnover is higher than ever,” the report noted. Restaurant workers said they’re leaving the industry for five main reasons:

  • Higher pay in other industries (28%)
  • The need for a consistent income and schedule (23%)
  • Lack of professional development and promotion opportunities (17%)
  • Work hours, including late nights, weekends and holidays (16%)
  • Work environment/company culture (15%)
  • To prevent your workers from pursuing jobs in other industries, the report recommends:
  • Focus on employee retention. Create a work culture that employees want to be a part of and try to meet their needs so they will stay at the job.
  • Start talking to your staff about problems that worry them “before it’s too late.” Look at what competing employers are offering and try to offer the same to your team.

15% of restaurant workers report being subjected to sexual harassment by managers or co-workers, and 15% report being sexually harassed by customers.

4. Concerns about mental and physical health: Restaurant work is hard work, and your employees have personal responsibilities that cause them stress as well. Many hourly workers are taking on extra hours or responsibilities to pay their bills, and that can take a toll on their mental health. There’s also a serious problem of abuse, according to the report.

  • 62% report enduring emotional abuse/disrespect from customers.
  • 49% say they have suffered emotional abuse from managers.
  • 15% report sexual harassment from customers.
  • 15% report sexual harassment from managers or co-workers.

Additionally, the COVID-19 pandemic and its variants stressed out restaurant workers even further. Sixty-five percent said they wanted businesses to require masks for customers, and 83% planned to wear a mask at work to protect themselves, regardless of restaurant or state requirements.

Now that as the pandemic seems to be easing up—at least temporarily—restaurant workers might feel less concerned about masks and being infected with the virus, but owners should be prepared to take care of their needs in the event of yet another upsurge. To address your staffers’ concerns about their mental and physical health, the report suggests:

  • If you need to ask workers to enforce mask or vaccine mandates in the future, provide support for them and make sure they’re comfortable with these often-uncomfortable responsibilities.
  • Engage staff and managers in an open dialogue to get ahead of potential issues that could hurt employee retention if COVID-19 makes a significant comeback in the coming months.

The Black Box report notes that 17% of restaurant workers chose the industry as a career and want to stay in the industry for the long term. “Recently, restaurants have been hit with higher-than-usual turnover, and this is a moment for restaurant owners and managers to take a look at how they do things and what their staff is up against,” the report concludes. “By creating a positive work environment and meeting workers’ needs, restaurants can reduce turnover and hire top talent in the tightest labor market we’ve ever seen.”  

Rick Hynum is PMQ’s editor in chief.