Post-Pandemic, Restaurant Franchises Plan Smarter To Avoid More Labor Shortages

The landscape of restaurant employment in the United States is undergoing a transformative shift. As the dust begins to settle from the challenges brought on by the COVID-19 pandemic, it's clear that the workforce's expectations have evolved. 

The demand for better wages and a deeper sense of respect and inclusion has become paramount for those returning to the restaurant sector. Restaurants are adapting and getting innovative to combat today’s labor issues. 

The State of the Restaurant Labor Market

In the United States, restaurant employment reached pre-pandemic levels in September for the first time in three-and-a-half years, according to the Bureau of Labor Statistics. Specifically, the number of Americans employed in foodservice increased by 61K in September from the prior month, while foodservice and hospitality workers accounted for the majority of jobs added in the wider leisure and hospitality sector as a whole. 

Amid the pandemic, foodservice employment was one of the most impacted sectors, with employers in the industry losing around 6 million workers in March and April 2020. And when restrictions began to ease through 2021, foodservice establishments struggled to regain employees. Now, although people are returning to the job, they’re asking for more than they were before. 

“The good news is that people are coming back,” said Dan Rowe, CEO of Fransmart. “The bad news is they're not coming back for what they [were] making before.” 

In a survey from the UC Berkeley Food Labor Research Center, 76% of restaurant workers said that they’d leave a restaurant because of low wages and 78% said the most important thing a restaurant can do to encourage them to stay is paying a “full, stable, livable” wage. 

Minimum wage increases have been happening around the United States. The average hourly rate for restaurant workers increased by 20% between 2020 and 2022, rising from $16.65 to $18.71.

Though it is a major factor, Rowe noted that it is not all about the money for restaurant employees.  

“They want to be respected, feel nurtured and feel heard,” he said. “People want diversity, equity and inclusion measures. You have to be really good to your people. It's not just  about pay; it's really about understanding what makes them feel loved, appreciated and respected.” 

How Restaurants Are Tackling Labor Issues

Restaurants are not only raising wages to tackle labor issues. They’re getting creative with the way they operate. 

For example, pasta, salad and wrap franchise Twisted Kitchen offers a simplified operational model, which allows for versatile labor and real estate requirements compared to other concepts in the fast casual space. The franchise can efficiently run with just two to four employees, which ensures that labor costs remain manageable, even during busy periods. 

“We're always interviewing,” said Jay Bandy, president of Goliath Consulting Group and advisor to Twisted Kitchen. “When positions do open up, we have a short list of potential candidates to hire. Workstream is a recruiting platform we use to maintain our 24/365 approach to hiring by always having positions posted on job boards. Managers in the restaurants carve out time in their schedule to conduct interviews each week. No one is ever too busy to interview.” 

Bandy added that using Workstream has given them a competitive advantage because it allows them to compete with larger brands. Having a constant pool of applicants also makes all the difference. 

Meanwhile, at Rise Southern Biscuits and Righteous Chicken, there is only one shift to cover due to the way the brand is utilizing technology and a streamlined operational model. That doesn’t mean it is easier to find the right team members, said operating officer Brian Wiles

“We use heated lockers for people to pick up their food, which really helps with third-party delivery and online orders,” he said. “We also only have kiosks to order from in the stores. That does not mean we do not want to engage in conversation with our guests or help those who need assistance with the kiosk. It is just better than having someone at the counter taking your order that does not care.” 

Wiles added that this allows the brand to focus on quality and production of orders coming in. It also allows the general manager to be up front, connecting with the guests and the crew at the busiest times of the operation. Wiles also emphasized the importance of not just “hiring bodies.” 

“That will get you nowhere and will cost more money down the road,” he advised. “Have a great interview process set up, and make sure to follow up [with] any applications in a very timely manner. The quicker you get someone in front of you for an interview, the better your odds are. Also, treat people the way you want to be treated. Having all the expectations lined out at the interview is critical for transparency.” 

The Evolution of the Market

In a post-pandemic world, where restaurant employees are seeking more than just a paycheck, businesses are reimagining their operational models and recruitment processes. This evolution highlights the industry's commitment to adapting to changing workforce dynamics, emphasizing respect, inclusivity and competitive advantages in the pursuit of talent. 

As the restaurant sector strives to meet the rising expectations of its workforce, one thing remains clear: The future of dining is about more than just the food on the plate; it's about creating a nourishing environment for both patrons and employees.