In November 2021, a record-breaking 1 million US restaurant and hotel workers quit their jobs. As this great resignation persists, the labor shortage devastates the industry, puzzling restaurants that are searching for solutions as their situation unfolds into a nightmare. Outside of staff leaving the industry, restaurants are also scrambling for ingredients as the labor shortage causes supply-chain delays and shortages for more than 90 percent of operators.
There’s plenty of statistics about the labor shortage, but they don’t provide insights about the restaurant industry attempting to solve the crisis or their plans about it. It’s critical for us to know the current state of those we are trying to help and what they intend to do. Presto set out to do precisely that, as we provide the industry with next-gen solutions for the labor shortage that are proven to help solve today and tomorrow’s labor productivity challenges.
As a restaurant technology leader, our platform is specifically designed to help improve labor productivity for our customers. It’s critical for us to know what’s currently happening with the industry and better understand what solutions are being implemented, which are working, and the industry’s thoughts about technology. In November 2021, we conducted a first-of-its-kind survey with over three thousand restaurants in the US to gain personal insights and intentions.
The survey asked targeted questions to identify current industry trends and uncover their actual pain points. We were astounded to receive almost two thousand responses and are delighted to share the results knowing how many are dealing with the same challenges, searching for answers.
We’ve all seen the reports about restaurant staff putting their feet in motion to resign and walk out the door for some time now. More importantly, we need to understand how this affects restaurants and at what capacity they are operating right now. The survey results showed that an alarming two-thirds of restaurants are operating at less than 50% capacity, causing an incredible strain on their business.
Not all restaurants struggle with the same labor shortage issues. To determine what’s causing the most pain, we wanted to uncover their biggest challenge in 2021. Outside of government regulations and supply chain issues, 62% of respondents indicated that the cost of the labor shortage and insufficient guest traffic was at the top of their list.
Impact on Revenue & Profitability
By mid-2021, sales were down $110 billion for the restaurant industry. It will take more than courage and loyal guests to battle the industry’s challenges. When asked how the labor shortage will affect their 2021 revenue, there was no doubt of the damage it will cause, as 72% of respondents think it will have a moderate or substantial impact.
As restaurateurs scramble, experimenting with potential solutions, we wanted to know which they feel are most useful in mitigating the labor shortage. The majority are looking into employee retention incentives and more aggressive hiring strategies. These results reveal that the industry is looking for traditional solutions, such as reduced operating hours, and hasn’t yet discovered the long-term benefit that technology can offer.
The State of Closures
In addition to staff shortages, the Omicron surge is making matters worse, causing restaurants to close temporarily or indefinitely. It was a sad sight to have seen so many restaurant chains close locations in 2021 or are close to permanently closing their doors. The signs become surprisingly visible when customers enter a restaurant and realize part of the dining area is permanently closed. The restaurant atmosphere and available seating have taken a harder hit than expected, as our survey shows that 86% of respondents indicated they’ve had to close a section because of the labor shortage.
Much of the industry hasn’t had the chance to experience the benefits technology can bring, be it the lack of knowledge or sticking with the traditional operating methods of the industry. Some dedicated employees are trying to solve the problem with overtime. Owners working up to 127% more won’t be able to keep that up for too long. And for those restaurants using outdated technology or systems that don’t work as promised, they’ve had less than ideal experiences.
Now that the industry had another year to test technology, we wanted to discover from restaurants which they think help the most. The survey revealed that 46% thought guest self-serve order and pay could benefit the most, followed secondly by 30% of the respondents thinking a self-check-in at the host stand or a food runner robot could be the answer. Roughly 24% voted for staff handheld tablets and wearable devices.
The Outcome and Implications for 2022
The survey shows a huge disconnect between what experts are saying, what customers expect, and how restaurants are trying to solve the labor crisis. If restaurants are going to overcome today’s challenges and be prepared for tomorrow’s, they’ll need to adopt versatile technology that provides analytics to optimize operations. The solutions go far beyond self-serve options for guests, and it’s not about replacing staff with clones or teleporting orders.
Automation and AI are being used for order taking with incredible accuracy to shorten wait times and augment staff to focus on more important tasks. Using Vision technology powered by AI, cameras can monitor food levels and alert staff early enough to maintain inventory and avoid delays. Order assembly can also be tracked to identify missing or incorrect items to ensure satisfied guests. Our instant order culture continues to impact customers’ expectations, as they now demand to get their order within 5 minutes. With all of these challenges the industry is facing, 2022 should be the year for restaurants to embrace technology and not avoid it.
Presto overlays next-gen digital solutions onto the physical world. Our enterprise-grade touch, vision, and voice technologies help hospitality businesses thrive while delighting guests. With over 100 million guests using Presto each month and 300,000 systems shipped, we are one of the largest technology providers in the industry.
Founded at M.I.T. in 2008, Presto is headquartered in Silicon Valley, Calif. with customers including top 20 hospitality chains such as Applebee’s, Aramark, Chili’s Grill & Bar, Denny’s, and Outback Steakhouse.