Article
How Independent Operators Can Beat the Great Resignation
The COVID-19 pandemic accelerated several emerging trends in the restaurant industry that long-preceded 2020. This included increasing consumer preference for online ordering, off-premises dining, and third-party delivery. And well before we imagined entering public places where every person would be wearing a face mask, the restaurant industry struggled with attracting and keeping staff.
During the past two years, attracting and retaining employees are the most pressing challenges facing the restaurant business. This article offers the perspective of two hospitality industry employment and labor attorneys whose discussion of the law – including in this magazine – is typically counseling clients how to avoid liability and other problems related to employment. As the restaurant industry gradually heats up in the wake of the pandemic, we believe there is value to looking at staffing problems through a variety of prisms.
Let's put some numbers on the problem.
The U.S. Bureau of Labor and Statistics (BLS) reported the annual employee turnover rate in the food services industry was 72%, 75%, and 79% in 2017, 2018, and 2019, respectively. That said, the pandemic contributed to the 130% employee turnover rate in 2020. Although the rate slowed to an 86% turnover rate in 2021, the so-called "Great Resignation" has hurt the food service industry more than most industries.
While the unemployment rate in the food service industry decreased in the first three months of 2022, from 8.1% in January to 6.9% in February, and 6.1% in March, the significance of this trend to the restaurant business is unclear. While employees are leaving food service positions, they are not reported as being unemployed, possibly meaning that they are securing jobs in other sectors.
As you well know, the restaurant industry requires staff who must report for scheduled shifts to perform their position. Employees are not offered the flexibility of hybrid schedules or remote positions. Restaurants compete with business that can offer these work environments. Add the fact that working in a restaurant is only becoming more challenging. Short staffing results in longer wait times and slower service. Employees face disgruntled customers.
Thanks for Showing Up
Woody Allen is credited with saying "80 percent of success is showing up". This aphorism takes on special meaning for restaurateurs. If you hope for your restaurant to succeed, your staff needs to show up. You might think this is no big deal, but remember they are aware that much of the current workforce is doing their jobs sipping cocoa in bunny slippers while petting their pandemic pooches. Your staff needs to be ready to serve customers on-site. Do you at least thank them for showing up every day? If you don't, then why not?
At the height of the COVID-19 global pandemic, many businesses transitioned their employees to work safely from their homes. To make a living, food service operators and workers were required to report for shifts without the flexibility of hybrid work environments or being allowed to work fully remote.
As a result, many employees had to find work outside of the food service industry to provide for themselves and their families. With the pandemic not completely behind us, operators are struggling with recruiting former employees to return to their jobs in the food service industry. The first priority of operators, however, has to be retaining the employees who never left or who returned as soon as restaurants opened back up.
Retaining employees begins with creating a supportive environment. The first step to keeping employees is to express appreciation to them for even reporting to work, something that operators previously took for granted.
Small gestures from supervisors and managers affect an employee's workday. Retention of workers starts with showing them you care about who they are as individuals. Operators now go out of their way to express appreciation to customers who continue to patronize their operations. This expression of gratitude should be equally and liberally directed at staff.
Saying thank you to current employees for reporting for their scheduled shift, completing a task, or being kind to other employees or customers creates a supportive environment. It is important for operators to acknowledge up front that they realize employees will face challenges during their shift given how short-staffed restaurants are, which often leads to disgruntled customers. By balancing the importance of both customers and employees, operators who care show how essential both are.
Every establishment, even those that are a part of a local or national franchise, has its own personality. Chick-fil-A is as recognized for its exceptional customer service as it is its popular chicken sandwich. Chick-fil-A employees are associated with exemplary service.
Likewise, your staff are associated with the identity of your concept, even if only in your local community. Finding and promoting your restaurant's positive identity can give employees a sense of belonging and purpose.
Involve your employees in identifying what makes you special. They are likely much more objective than you could ever hope to be. They know what others are saying about your business that online reviews will never approximate.
Getting to Know You
Authentic, open and transparent communication fosters strong employee relationships. It is never too early to find out what your employees hope to achieve in their short- and long-term careers.
During interviews, ask candidates to share their aspirations. Knowing in advance whether your employees are thinking about where they will work next week, next month, or next year is beneficial to their growth and the stability of the establishment. Continue to learn about your employees once they are hired.
Operators who have the knowledge to develop their employees have a great advantage. People want to grow, although not necessarily in the same direction as others might. Offering development opportunities to your employees shows that you have a genuine interest in their development, and it creates a unique connection. The responsibility of development does not have to solely land on the manager. Search for ways to help employees to achieve their goals. Strive to create an environment where employees feel connected and a sense of belonging.
Stay a While
Operators should continue the line of communication with an open office door that invites employees to appropriately express their concerns with the work environment. Random or scheduled conversations with your employees are an opportunity for you to have "stay interviews." Operators often interview candidates to hire them, but how often are operators talking with their employees to assure they want to stay?
Each week or each month, write out three different questions that you want to ask your employees for their thoughtful response. This is not a test, and you want to keep the conversation so that the employee knows you are being genuine. The objective is to learn something about your team that makes them want to stay with you. Easy topics can range from why you want to work here to what do you want to learn. Listen with intent, accept the feedback, and if you received suggestions, offer to change what you can.
As an operator, take steps to show your employees that you support them. Within the past year, a growing number of social media posts have documented the "short-staffed, please be kind to our employees" signs posted at the entrance of many restaurants. These reminders are helpful to guests who enter the dining area so that they know that the servers and cooks waiting on them are working hard. These signs show your employees that you are taking steps to help set the expectations of guests.
Another way to show support for the staff is to feature one of your staff at the front door of the restaurant on a weekly basis. Include a picture of the staff member and a fact about the employee that helps guests feel a connection with them. Don't forget your kitchen staff. Encourage them to visit dining tables and introduce themselves to guests at various times throughout their shift. Guest appreciation for their food can be highly motivating. Customers who feel a social connection with a staff member are more likely to leave a larger tip.
Food service workers who have direct contact with customers can help turn a difficult situation into a positive one by being proactive. Many restaurants are facing disgruntled guests due to being short staffed, which results in longer wait times to be seated, longer food wait times, and slower service by the server. Simply put, customers are unhappy when they do not get their food or service quick enough, and workers feel overwhelmed and defeated at the end of their shift. Servers, however, have the biggest influence on the customer experience and can be proactive in setting expectations of the guest.
Remind your workers how they can set expectations regarding the time that it may take to prepare food items because the kitchen is short-staffed, or that the restaurant's supply chain has impacted various menu items. Customers are less likely to be upset when they are told why there is a delay in service. Remember, it is less expensive to retain employees than to replace them.
Support Begets Support
Operators now must turn to finding more employees to increase their staffing rates to acceptable
levels. If operators are creating the supportive environment already discussed, then they have
built-in referral resources – both employees and regular customers who are waited on by those staff members.
Operators should consider expanding who they typically consider an eligible employee and add people
with no restaurant industry experience. Operators have more resources than they realize to help
fill their open positions. Some operators are thinking outside the box regarding making the
application process less onerous to workforce entry. As you create the supportive environment, consider your employees as your primary source of staff
recruitment. Employees share their experiences, both good and bad, with their network of family
and friends. When employees are happy with where they work, even if it is not a long-term
placement, they are more willing to recommend people they meet or know to join their team. Of
course, if you can provide an employee a referral bonus, consider that as an option. Set parameters
on when it will be paid based on how long a new hire remains employed. Encourage current employees
to take part in helping fully staff the restaurant and reward them when they do. One way to help recruit your trusted employees' friends and family members is to allow your
employees to "go live" on social media, such as on Instagram or another similar account. They can
show their friends and family the fun and inviting environment in which they work. Operators should turn to their regular customers as potential referrals or job seekers
themselves. Regular customers are those guests who return to the restaurant over a prolonged
period of time. As such, their repeated return to the restaurant more likely than not means that
they have an affinity for both your food and the service staff. Operators should consider including them in recruiting new employees. Regular customers may be
interested or have a child or sibling who may want to find a great place to work. Encourage the
server who often waits on your regular customers to share that the restaurant is recruiting employees and would appreciate any referrals they can give. Another great source of recruitment is younger individuals who are just now joining the workforce.
According to the BLS, high school and college students enter the job market yearly between April
and July seeking summer employment. Summer workers not only add staff to a shift, but they can also
offer an uninterrupted day or two of rest to your current staff. Additional headcount added to the
schedule rotation indicates to your current employees that you want to create the supportive
environment where they are appreciated. Have your summer staff provide you with their
availability and use that to incorporate time-off schedules for current year-round employees. Try not to create
fractions between the groups. The aim is to operate the business with all your employees and to
create a supportive environment for all workers. Minors may provide a source of staff during the school year. Operators may consider them
individually or as part of a school-work program by partnering with the local high school.
Pre-pandemic, many operators refrained from hiring minors for a number of reasons,
including the extra work to comply with federal and state child labor laws. Child labor laws for your state may determine the maximum number of hours that a minor employee
can work, the type of work that minors can or cannot perform, prohibited workdays, and if a work
permit is required. However, if you know what the rules are, you can certainly work within the
state and federal guidelines and add employees to help staff your restaurant in certain areas. Do not dismiss college graduates entering the job market. Stretch yourself to look beyond saying
that an applicant is overqualified for a position. Some college graduates may have previous food
service experience. Applicants apply for positions for a myriad of reasons, including to gain
management experience or to learn about the restaurant industry so they might open their own
restaurant one day. To meet immediate staff shortage needs, there are no employment laws requiring pre-employment
interviews be- fore job offers are extended to an applicant. Instead of asking applicants to
come in for an interview, some operators are giving applicants an immediate start date. While
this creates some risks to the operator (i.e., the operator hires an applicant who is not a high
performer), it may be worth the risk to be able to meet immediate staffing needs. The new hire should be asked to sign an employee acknowledgement that they understand that
it is a working interview the first week and that the restaurant and the employee can decide
at the end of the week if it is a good fit for both of them. Operators who hire an employee
on-the-spot, however, should keep in mind that they do not have the freedom to ignore
local and federal employment law. Extending a job offer for an applicant to start on the same day as the interview is not an
alternative to completing required new hire training or paperwork. Employers must ensure
that all documents, i.e., I-9 forms, payroll tax forms, OSHA guidelines, and policies and
procedures are reviewed, completed, and submitted within the proper timelines. Consider rewarding your employees for their loyalty and performance. The most common rewards
discussed are hiring and referral bonuses. Those bonuses, however, are not the only way that operators can reward employees. The best rewards are those that are thoughtful and specific to your employees. From your open-door conversations and stay interviews, operators will develop relationships with
their employees. Providing employees with tokens of appreciation can range from transportation
tokens, gift cards for grocery delivery, or cash bonuses. A few more creative rewards that
operators are implementing to combat the great resignation are: Employers need to consider their workforce and what is important to them to determine the reward
that will best motivate their employees to encourage dependability and longevity. Operators must be proactive to recruit new hires and to retain and reward their current employees.
Employees who enjoy where they work and feel that they belong will inevitably perform at a higher
level and provide better customer service to guests. Taking the steps to focus on your employees will not only increase employee morale and retention
but will also likely impact your bottom line. Everyone wins — the employee,
the guest and the restaurant. By Alisa Pittman Cleek In your admirable zeal for filling positions, don't overlook red flags that could cause headaches and liability. Negligent
hiring is a legal theory under which employers can be held responsible for in- juries caused by
their employees if it can be shown that they failed to make reasonable inquiries into the
employee's background and suitability for the position. During the last 30 years, we have experienced a steady increase in nationwide civil lawsuits
against employers for negligent hiring and negligent retention, and many of these suits have
occurred in the restaurant industry. An employer may be found liable for negligent hiring when an employee causes harm to another
employee, customer or member of the general public, whether or not the employee is acting within
the scope of his/her job duties. Most negligent hiring lawsuits maintain that the employer
failed to conduct appropriate research, prior to an individual's hire, such as background
and reference checks or an investigation into the criminal record of the employee. This background information may have disclosed an employee's past misconduct and, therefore, the employer will likely be found to be negligent for putting a person
with criminal or otherwise dangerous tendencies in a position where they could pose a threat
to others. Similarly, the theory of negligent retention holds an employer liable for retaining an employee
who is known to be unfit for the position. Much like negligent hiring, this theory places a duty
on the employer to conduct a reasonable investigation of any information that suggests an
employee's unfitness and to respond reasonably to whatever is learned about the employee. For example, if an employer knew or should have known about allegations, rumors or clear
evidence of sexual abuse by an employee, the employer would have a duty to reasonably
investigate the allegations and respond to its findings. An employer may be held liable for
negligent retention of an employee after an employer becomes aware or should have
become aware of problems with an employee who demonstrated unfitness and the employer
takes no corrective action (investigating, reassignment or termination). In the restaurant industry, the host and wait staff frequently come into contact with
other employees and customers throughout their entire shift. Similarly, in
quick-service restaurants, cashiers and employees working the drive-thru come into contact
with customers each minute. As a rule, the greater the interface with co-workers, customers
and/or the general public that the position requires, the greater the obligation of the
employer to conduct appropriate background checks. In addition, the prudent employer will
conduct comprehensive background checks when hiring because employers found negligent
in the hiring process have been subject to substantial financial penalties, which can
include both actual and punitive damages. About 30 states currently recognize the theories of
negligent hiring and retention.
Negligent-hiring lawsuits maintain that the employer failed to conduct appropriate research prior to an individual's hire. Negligent retention holds an employer liable for retaining an employee who is known to be unfit for the job. Here's how to avoid both claims..
A Rewarding Career at Your Restaurant
Turn the Great Resignation into the Great Recovery
How to Avoid Negligent Hiring
KEEP LEARNING…
How to Avoid Negligent Hiring
