When we compare satisfied employees with good pay the hospitality industry has been in a condition of instability even before the pandemic. While a solution has encompassed different directions but never resulted, the dilemma is being further plagued by an unexpected new competitor paying all of our staff.
The New Competition to Staffing
Who is the new competitor paying our previous employees a higher wage? The government.
Rates of pay have been a hot topic for some time now, however, the burden upon businesses satisfying salary expectations has been further complicated in 2020 and now 2021. Front of House and Back of House staff have been talking better pay for years. With the current unemployment benefits going until September 2021, it will be difficult to get employees to return to work. The new unemployment benefits are offering the customary amounts plus an added three hundred dollars in supplemental pay. This means $500 to $800 a week salary for sitting home.
Will we see staff return to a job that has many hours of stressful work, often difficult conditions, sometimes low morale and poor treatment, and less pay, or will this cause workers to stay home?
While many families needed these extra funds, how must we react to keep our businesses open and staffed?
Staffing Levels and Turnover in Restaurants
Hospitality staff have been running to other jobs outside the industry for some time and even more so after COVID-19 canceled their positions. Many social posts by foodservice employees, especially chefs, are all talking and telling each other about the difficult work environment with less available workers by their side. They are sharing discussions about better jobs and reasons to not return.
The industry is not balanced between unrealistic workload versus pay received. Changes have been occurring to better the level of income; however, it may be a little late. While passionate staff will hopefully remain, it is more difficult to keep required staff levels. Additionally turnover is only going to increase in the months ahead.
The options to bring staff back currently may be limited. Staff is running to other industries than food services and they are taking their friends with them. If you do not determine a way to secure your team before summer, you may be left running the business with limited staff. As the owner or manager, you will do a lot more than you expected or can accomplish.
Impact on Guest Satisfaction
In addition, low levels of staff and high turnover associate with guest dissatisfaction. We all know the outcomes of poor service and lower quality food output. From losing customers to paying the price in online posts that kill business. Now is the time to step up with a plan.
We are in a serious position with staffing our restaurants, our private clubs, our café’s, and our catering businesses unless we can come up with solutions.
Short Term Solutions for Food Service Operations
What options do you have in the short term?
- Enlist good quality ad-hoc staff on the busy days and pay them well so that they will work the days offset from unemployment benefits. If they can pick up a busy weekend day with good pay, they can maintain a good portion of their unemployment benefits. This is a win for both operator and employee.
- Reboot your menu with lower-cost items with less prep and cooking needs to reduce staff requirements. Pay the people you have on payroll now a higher wage to keep them. While not for every category, this may suit smaller locations over the short term of 2021.
- Take advantage of the potential revenue increase due to locations nearby that were forced to close. Put this to the test and increase your rates of pay, add between 10-50 cents per menu item, concentrate on other cost reductions, and teach your team what items have the highest potential for profits. Keep in mind that the higher-cost items may yield the most profits. Sell profits.
- Purchase the restaurant next door that closed during COVID-19. Utilize this addition to maximize your staff needs and your preparation needs. IE: all prep is done at one location, the staff has more hours available and work security with two locations, transfer product between locations as necessary to improve utilization, use one location as a commissary kitchen (Ghost Kitchen), etc.
- Sell Safety over food and service. Guests are more interested in how safe they will be over how good your food or service is. Tell guests what you are doing and Sell Safety to get them in the door.
Whatever you come up with, business as usual is not coming back anytime soon. You cannot wait until things settle down because too much has changed. The way you did business in the past is gone for now. Step up and plan.
Jim Lopolito, President of Lopolito Hospitality Consultants, Corp. is a veteran of the restaurant, country club, catering & concert industries offering expert assistance with club management consulting, restaurant consulting, and other foodservice development. He has worked as an executive chef and general manager and has performed in a consulting role for more than 20 years. His proprietary “Expense Loss Review” program has been a highly sought after resource for his broad client base. Jim is a member of Cayuga Hospitality Consultants.