By now, we have seen signs of a labor crunch in all parts of the restaurant industry. According to the Bureau of Labor Statistics, the industry remains 15% below pre-pandemic job levels. Analysts have pointed to unemployment benefits and the gig economy as likely causes. We know that this problem is here to stay for the long run.
But what exactly does this mean for your restaurant concept? The reality is that disruptions in labor supply will have repercussions across your entire operations. Guests and staff will feel the impact, and so will your sales. How you react now will determine the growth of your business in the foreseeable future.
Guests could start to leave before being seated.
With fewer servers and kitchen staff, restaurants will likely see a dip in speed of service. Takeout sales are consistently high and dine-in traffic has begun recovering. This will keep back-of-house staff busy with orders from various channels. Table turns will slow down as servers adapt to covering more tables.
The result is that extra minutes will be added onto each guest-staff interaction, eating into the time that guests spend waiting to be seated. As lobbies crowd up, guests may be more likely to leave before being seated, costing your concept in lost sales opportunities during peak hours.
You may not be maximizing your profits.
Short-notice staff absences have always been tough on restaurant teams. Longer term staff shortages will be even more difficult for them to adjust to. Overburdened staff are more likely to make basic mistakes, such as forgetting to suggest cross-sells or entering an order inaccurately into the POS system. Subpar service makes guests less likely to visit the restaurant again, leading to lower guest lifetime value.
While wage increases temporarily help alleviate the problem, they can ultimately lead to a hiring war between restaurants that increases employee churn. Staff turnover comes at a high cost too: $5864 per guest-facing staff member, according to Cornell. And how can a general manager focus on bettering the guest experience when their team members are constantly leaving? The eventual result is lower profitability and inconsistent guest experience.
Your competition may start to pull ahead.
Large restaurant chains are already trying to stay ahead of the worsening situation. Some are sweetening the hiring process with upgraded work benefits. Others are seeking solutions that help staff operate more efficiently without compromising the dining experience.
Full-service operator Darden has begun looking for technological solutions for staff enablement. Quick-service chains such as Whataburger and Taco Bell announced that they would enhance compensation for general managers. Even Chipotle is giving its debt-free degree program a major upgrade.
Restaurants that continue to impress guests during an industry-wide labor shortage will come out stronger in the end. Does your concept have a game plan yet?
Empower your existing staff with technology.
The restaurant industry labor shortage is here to stay. In reality, offering bonuses and stretching staff out thinner are gut reactions that don’t resolve hiring challenges in the long run.
But you can view this crisis as an opportunity to streamline operations and improve your bottom line. Deploying front-of-house technologies can help you achieve this, while enabling staff to serve more tables, offer guests a better experience, and receive more tips. What’s more: these technologies can help shelter your concept from the uncertainties of the labor market for years to come.
With over 11 years of experience in supplying enterprise-grade technologies to restaurants like Denny’s, Chili’s, and Applebee’s, we are well-attuned to meeting changing industry needs with our next-generation technologies. Contact one of our experts and they’ll help you select a digital solution that readies your staff for the new normal.
