Restaurants try carrots to lure shrinking labor pool
Everyone in the restaurant industry is feeling it: The labor market is tight right now. Countless restaurants are struggling to hire and retain any staff, let alone a good or great staff.
Then Chipotle upped the ante, launching a nationwide program to hire 4,000 workers on one day, September 9, and touting its compensation for top restaurant managers up to $133,000 a year. (Chipotle didn’t return calls on how that went.)
The economic upswing is a mixed bag for restaurants. On one hand, customers have more disposable income—up a projected 3.1 percent in 2015, according to the National Restaurant Association. And consumers are expecting 2016 to be another great year for the economy, giving peace of mind to enjoy a night out.
According to the NRA, consumers are on track to spend $648 billion on food, a 3.8 percent year-over-year bump in spending at commercial eateries.
On the other hand, many employees who have been working in restaurants for the past few years are seeing more opportunities in and out of the restaurant industry.
Training budgets are going up and the majority of restaurants surveyed by the NRA will devote more resources to hiring and retaining workers.
Couple that with new rules for overtime exemptions, higher healthcare costs and joint-employer concerns, and managing that one-third of the budget is getting close to a full-time job (or two). This is all happening before the restaurant industry turnover rate has normalized to pre-recession levels—so it could get worse.
Hiring and retaining great workers, however, doesn’t necessarily mean throwing money at them. In fact, workers you can get for money alone are more likely to leave for a little bit more elsewhere. According to Patrice Rice, CEO and founder of restaurant industry recruiting firm and franchise Patrice & Associates, other factors loom large.
“It’s not always about money, in this industry, it’s more about quality of life,” said Rice. She said restaurants need to keep up-to-date with labor trends to make sure they’re not wasting money on training when they don’t need to.
“There’s about 1 million restaurants in this country, and each restaurant has between four and seven managers,” said Rice. “And you look at all the chains growing and expanding—well, you still have your same pool of mangers, so you want to attract the good managers to come to you.” Then the trick is “to keep them so they don’t go someplace else.”
Fewer hours than the historic “churn-and-burn” workload and quality benefits go a long way. But changing up how shifts are structured can make restaurants more attractive than competitors and stay in line with other white-collar industries—even if few still get weekends off.
“It used to be that nobody used to get consecutive days off; they might have a Tuesday and a Thursday off,” said Rice. “But now a lot of companies are going to two consecutive days off, so you can really get a rest or have a little weekend during the week.”
Bonus options for managers are also an important mainstay, because money still brings talent. “Most of the good companies understand that the manager affects the bottom line,” said Rice, noting that bonuses must be clear and attainable. “If the profitability is higher, they’re willing to share that with the managers. And a lot of managers really prefer that because they know if they do a good job they can make money.”
Andrew Robinson, chief people and culture officer and senior vice president of human resources at TGI Fridays, said their attainable bonus program is where managers can take a strong ownership stake and bring in significantly more money.
Restaurant managers, a supportive role, at Fridays will earn between $15,000 to $20,000 in bonuses in a typical year, and for lead managers “the average will be well over $40,000 this year,” said Robinson, who also maintains a wealth management program to help young earners be smart with those bonuses.
As for frontline workers, Rice said respect goes far. “Treat someone with respect no matter what their position,” said Rice. “Make them feel important. Their position is sometimes more important than the manager’s position because they impact the customers.”
Robinson echoed those same sentiments, and has worked to bring frontline employees into the hiring process as well. “One of the things I took out of the last engagement survey was amping up the involvement of our team members to hire other team members—making sure that they bought in,” said Robinson. “They might be able to see the possibilities in a candidate much better than we could.
“We have a higher retention of those folks,” Robinson said about people who grow within their company. “They really get the brand. So we’ve really focused on that.
When we’re hiring those entry-level people, we’re thinking two or three levels in advance.”
Robinson said their retention strategy is closely focused on giving employees at all levels a clear path, “where people can take control of their own careers and move themselves forward.” “More than 50 percent of our management positions are filled from entry-level positions. I think I’m actually somewhere around 60 percent; I’d like to see that at 75 percent,” he said.
New intermediary positions help give small bumps in pay and responsibility, and ultimately keep employees focused on reaching the next step. “We’ve created additional programs like the associate manager program, which is an hourly management position. But it gives either one of our hourly team members or a recent college graduate or someone with really compelling experience the opportunity to be a leader,” said Robinson. “It is the first management position and we’ve seen great success with that.”
Offering those intermediary positions hits close to home for Robinson. “I’m sitting in the desk I am today because someone offered me the swing manager job at McDonald’s 30 years ago,” he said.