What is the great American labor shortage?
The pandemic was going to take its toll on the labor market eventually, and it appears that the time has come. The United States of America is suffering from one of the worst labor shortages in history, and the situation is not improving fast enough. The Bureau of Labor Statistics found that job openings increased to 9.3 million in April 2021, which prompted many to express their shock at this development. The job openings rose to more than 10 million in June.
The turnover has been the highest in industries that are commonly associated with lower wages. Employees are unwilling to return to their underpaid pre-pandemic jobs that did not give them satisfaction. Americans are finally realizing that the labor market has shifted towards them, and they are ready to fight for worthy compensation.
Labor Shortage in the Food and Beverage Industry
According to the April 2021 Job Openings and Labor Turnover published by The Department of Labor, 5.6% of restaurant workers quit their jobs in April. Restaurant job openings went up to nearly 1.34 million job openings in April, with 350,000 new job openings being added since March. The unemployment rate for the food and beverage industry has been higher than the national average at 8.4%, according to the Bureau of Labor Statistics. In May, employment at food and beverage places was still 1.5 million jobs below pre-pandemic levels, as per the National Restaurant Association’s summary of data from the U.S. Bureau of Labor statistics.
It is not very surprising that the restaurant industry is suffering from the adverse effects of the labor shortage. Low wages, dependence on tips, long hours, and frequent layoffs made the lives of restaurant employees difficult even before the pandemic.
Why does the food and beverage industry suffer from labor shortage?
The pandemic revealed many cracks in the hiring and retention process of the food and beverage industry. Employees are leaving their jobs because they do not have the incentive to work long-term for the prospect of growth. The instability of the industry has led to higher turnover rates over the years.
The labor shortage in the food and beverage industry can be attributed to these major reasons:
1. Lack of unemployment benefits
The pandemic has left many restaurant workers in dire financial straits. While the state has been trying to offer sufficient unemployment support, it has not been enough for many employees who lost their jobs. Many states also decided to stop offering federally funded unemployment benefits once the pandemic situation improved a little. As a result, many employees are unwilling to go back to work in this industry.
2. Restaurant employee working conditions
Working as a restaurant employee is no walk in the park. Exploitative practices have often plagued employees who are underpaid and underappreciated. Now, they are no longer ready to settle for bad working conditions. The pandemic has given them a chance to negotiate for better working conditions or look for a more rewarding career.
3. Health scare
Restaurants have suffered massively because of repeated lockdowns. Both consumers and employees have health-related fears. Employees with pre-existing medical conditions are more likely to contract COVID-19 and they are afraid of coming into contact with customers every day. They do not want to come back to work until the vaccination process is complete.
4. Work-life balance
Restaurant workers have always had to adjust their personal lives based on their shift schedules. The chance to stay at home during the pandemic has instilled in them a desire to aspire for a job that allows better work-life balance despite working in a restaurant. They do not want to sacrifice their personal lives at the stake of their career anymore.
5. Scheduling flexibility
Dealing with rigid schedules can be stressful for restaurant employees. To begin with, they have no control over how their shifts will turn out each week. Moreover, they always have to go out of their way to schedule personal tasks outside their shifts, without having certainty in their schedule in the upcoming week or month.
As the labor shortage becomes greater, each employee needs to take more shifts on themselves. This makes it even harder to balance a decent work-life balance and a healthy work atmosphere.
Allowing some degree of scheduling flexibility benefits employees greatly, and they are more willing to perform better at work. Mane employees also have a family to take care of, and they would like to take or drop shifts accordingly.
6. Restaurant and cafe employee satisfaction
Working a thankless job can be frustrating, and restaurant employees have complained of this for a long time. The pandemic allowed many workers to introspect and take a stand for themselves. They no longer want to put up with mistreatment and instead wish to prioritize job satisfaction. Employers have to become more appreciative by introducing training programs and increasing wages.
7. Restaurant and cafe employee compensation
One of the greatest changes to have risen out of the economic upheaval caused by the pandemic is that the restaurant workers now have the upper hand when it comes to negotiating their wages. Restaurants that are suffering from the labor shortage want to rebuild their workforce as soon as possible and prepare for the holiday season. Many are offering higher pay and better employment opportunities already. Now that workers know what they are worth, they do not want to return to their underpaid jobs.
8. Labor skills gap
The lack of restaurant staff training and coffee shop training has led to many employees underperforming for no fault of theirs. The pandemic has only worsened the skill gap in the food and beverage industry.
Labor shortages in the food and beverage industry can be attributed to a few key mismatches.
- More and more people are choosing to move to the suburbs and start their lives afresh. As a result, restaurants and cafes in urban areas are facing an employee shortage.
- Despite having an excellent skillset overall, many employers lack technical industry-specific skills. Proper restaurant training can go a long way in resolving this issue.
- Restaurant employees want better pay and working conditions. The poor reputation of the food and beverage industry for bad workplace conditions is hindering its prospects.
How to attract restaurant employees and retain them?
The Bureau of Labor Statistics predicts that the demand for cooks will increase by 6% over the next decade. Restaurants and cafes that want to survive this labor crisis have to invest in their existing employees and attract new hires simultaneously.
1. Prioritize employee satisfaction
Caring about the long-term happiness and satisfaction of your employees will give you an immediate advantage when it comes to retaining them. Employees will reciprocate the warmth and loyalty, which will make them unlikely to quit all of a sudden.
2. Restaurant training
Recent data has revealed that 40% of frontline employees receive training once a year or less. On-the-job training is essential in the restaurant industry, where employees have to learn how to deal with different situations and hone their technical skills. 59% of millennials say that they prioritize opportunities to learn and progress when choosing a job. Restaurants have to establish comprehensive training programs to retain younger workers.
It is also important to devote resources to the up-skilling or re-skilling of existing employees to eliminate the skill gap. Older employees who have already proved their loyalty to the company will be more valuable in a higher position than a new hire. Digital or virtual training is an excellent option for restaurant employees who are on their feet all day.
3. Good compensation
The restaurant industry is notorious for paying its workers insufficiently, increasing their reliance on tips. As per Forbes, 78% of Americans live paycheck to paycheck, and it is important to offer them financial support when necessary. It is important to remember that workers who receive fair compensation and benefits will be more productive in the long run. Higher wages are an incentive for them to work harder and cement their position in the establishment. The pandemic has given restaurant workers the unique opportunity to negotiate their salary on their own terms. Many food and beverage establishments are already offering higher pay and better employee incentives to build a workforce amidst the labor crisis.
4. Flexible routine
Let employees schedule and change their shifts based on their convenience from time to time so they know you care for their well-being.
5. Offer a platform for communication
You never know how valuable your employees’ feedback and insights can be until you give them a chance to convey them. Make them feel special by allowing them to communicate their wishes, suggestions and concerns to you directly. It is easy for employees to feel disconnected from the company if they feel nobody cares about what they have to say.
Restaurants are slowly getting back on their feet after the pandemic. To overcome the labor shortage successfully simultaneously, it is crucial for them to invest in effective onboarding process and training solutions. With Bites, you can reap all the benefits of video learning and microlearning to nurture the skills and talent of your employees.
A unique training solution, Bites allows you to create your own lessons in the form of short videos and compile them into separate playlists. You can share them with your employees and track their progress with the help of the analytics dashboard. Videos tend to be more effective when teaching practical and technical skills to restaurant employees. The learners can leave their feedback and suggestions on the platform to participate in the discussion.