How to Overcome the Biggest Labor Challenges in Hospitality

How to Overcome the Biggest Labor Challenges in Hospitality

By Mia Reedy, HR Manager

If you’ve been in the San Diego restaurant and hospitality industry for a while, you’ve likely experienced your fair share of labor challenges. Maybe you’ve had trouble attracting and retaining talent? Perhaps the improving economy has opened up new jobs elsewhere and you’ve lost valuable staff members? Whatever the case, staffing troubles hurt your restaurant and impact productivity. Luckily, there are a few ways to overcome some of these issues.

The Biggest Labor Challenges Facing San Diego Restaurants

There are a number of unique labor challenges that the hospitality industry deals with more often than other sectors, such as:

Recruitment and Talent Retention

Attracting and retaining talent can be a difficult task especially when the labor pool is shrinking (and aging). 4 in 10 restaurant employees are aged 16-24. However, the number of people in that age group who’re seeking jobs in the industry is declining. Individuals who are 55 and older are the fastest-growing sector of the restaurant industry workforce.

As Baby Boomers begin to exit the mainstream workforce, a traditional work ethic coupled with the possibility of living well into their 80s and 90s has encouraged many retirees to take up part- or full-time restaurant employment. In fact, U.S. Department of Labor predicts that people 65 and older will continue to enlarge this workforce at least until 2024.

High Staff Turnover

The simple fact is that many employees are leaving their restaurant jobs or sidestepping the San Diego food industry altogether for a host of reasons, including:

• Poor compensation: Many restaurant employees are paid very low wages, relying on tips to make ends meet. Such low wages mean a poor standard of living so employees often quit in favor of higher paying jobs.
• Limited perceived career path: These days, college-age workers see restaurant work as a stop-gap, not a long-term career option. They’re simply looking for ways to earn a bit of money until they find ‘better’ permanent employment.
• Work/life balance: Employees in the restaurant industry often complain about long hours that impinge on family or personal time. The business of juggling work and home life can be very difficult, not to mention lacking time to simply recharge their batteries. Millennials in particular expect more control over their work/life balance.
• Weak management and leadership: If management isn’t up to par, things can and do go wrong. Inevitably, this leads to greater pressure on employees to pick up the slack.
• Stress due to workflow/understaffing: High staff turnover often leaves gaps in the schedule, which means a smaller number of employees are stretched to work longer hours or cover more roles to keep things running smoothly.

Improving Economy

When jobs are scarce, people are more likely to stay in their restaurant jobs. Subsequently, any upturn in an economy can result in employees leaving for opportunities elsewhere. Add a restaurant turnover rate that’s always higher than the overall private sector and you have a challenge on your hands.

Minimum Wage Increases

The recent hike in minimum wages across California and the U.S. has put a serious squeeze on many San Diego restaurant budgets. You may be struggling with the options. You could lay off some employees but risk a drop in productivity and service. Or do you raise menu prices and risk putting off customers? Finding the budget for the compression effect of minimum wages (the hidden ripple effect of wage raises across the business plus the impact on benefits, etc.) is a serious challenge.

Which leads us on to…

Smaller Tips

The cost of mandated and competition-driven wage increases often forces restaurant owners like you to pass along the cost to consumers in the form of higher menu prices. However, that can be a risk strategy. Higher menu prices either discourages the customer from dining at your restaurant or encourages smaller tips. As restaurant workers receive smaller tips, their job satisfaction goes down. Not only that, but they may be driven to leave their restaurant job if pay starts to get too low.

How to Overcome Restaurant Labor Challenges

• Be Picky

Whether you’re looking for managers or wait staff, thoroughly check their resumes for experience and job history. Also, look for candidates that don’t tend to job hop every few months. Be sure to double-check references and ask applicants in detail about what their goals are and how long they plan to work for your restaurant.

• Build a Positive, Engaging Culture

Reward employees when they’re productive and doing well. This makes workers feel valued and appreciated, which encourages them to stick around longer.

• Engage with Your Reviewers

Drive consumer traffic by responding to online reviews. By responding to online reviews, you’re enhancing the brand perception and encouraging loyalty. This helps to attract new consumers, which means more dollars to put towards recruiting talent and paying for increased wages and better job benefits.

• Invest in Your Staff

Promote the fact that restaurants are a launch pad for career advancement. Working at a restaurant can give people experience in sales, customer service, training and operations. Promoting these benefits could attract potential employees and make them want to work at your restaurant to kickstart their career in a variety of fields.

• Take Your Time

What you put in is what you get out. If you don’t put in time with your employees, then you won’t benefit from their full potential. Set up regular check-ins on an individual level with your staff so you can understand their abilities and desires in the industry.

Read our Workforce 101 for new restaurant businesses and get ahead of the competition before you open your doors.

If restaurant staffing in San Diego is giving you a headache, our HR experts will help you fine-tune your processes, stay legally compliant, and grow your business with the best team possible. Don’t hesitate to contact us about our services today.