In June 2023, the restaurant industry faced a significant drop in job growth, putting an end to an impressive 29-month streak of continuous expansion, according to a recent report by the Bureau of Labor Statistics (BLS). This sudden downturn in job growth indicates that the industry is still grappling with the aftermath of the pandemic and has a long way to go in terms of recovery and staffing.
Despite the overall downward trend, there is an evident demand for more workers in the industry, as indicated by the prevalent "help wanted" signs. This suggests that there is a desire among restaurant owners and operators to boost staffing levels, but various segments of the industry have experienced different impacts.
Full-service restaurants seem to face the most significant challenges on the path to recovery. The BLS report reveals that in May 2023, full-service restaurant jobs were 4% lower than their pre-pandemic levels. This indicates a prolonged struggle for these establishments to regain their former staffing capacity.
On the other hand, limited-service and quick service/fast-casual restaurants have not been hit as hard. In fact, limited-service restaurant jobs have seen a notable increase of 15% compared to February 2020, demonstrating their resilience during these challenging times. Similarly, fast-casual jobs have risen by 2% compared to pre-pandemic levels, showcasing their relative stability.
Even bars and taverns have managed to rebound to a certain extent. Jobs in this segment are up by 10% compared to the employment levels seen before the pandemic, suggesting a more positive outlook for these businesses.
For restaurant owners and operators, these trends are unfolding in real-time, and they are likely experiencing the impact of the slowdown in job growth firsthand. Although the industry still needs to hire more staff, the overall deceleration in employment means that the existing workforce is likely feeling the strain of handling increased responsibilities and customer demands.
So how can the hardest hit segments bounce back? Recruitment and retention are two of the largest challenges facing the restaurant industry. In fact, turnover has a significant impact on a restaurant’s bottom line (new employee training costs about $3,000 on average).
- Offer more competitive salaries: This can actually save a restaurant money by helping to reduce turnover. When employees feel valued and adequately compensated for their work, they are more likely to stay committed to the restaurant.
- Leverage hospitality-focused temp staffing solutions: Services like GravyWork can be a game changer, as they provide access to a roster of vetted and reliable culinary staff ready to work shifts. This not only helps fill staffing gaps quickly but also ensures a level of professionalism and competence among temporary staff.
- Offer referral bonuses: Incentivizing current employees to potential candidates can also help with staffing shortages. By offering referral bonuses to employees who refer friends to job openings, and rewarding them when the referred candidate stays with the restaurant for at least three months, restaurants create a win-win situation for everyone involved.
- Partner with local schools and job programs: Offering training opportunities and actively participating in job fairs and community events helps establish a strong presence and reputation within the community. Collaborating with educational institutions, such as community colleges and universities, can open up job opportunities and training avenues for recent graduates and those looking to enhance their skills. In fact, GravyWork partners with several community colleges, universities, and community programs across the DMV and FL to provide job opportunities and training to recent grads and those looking to upskill.
- Branch out with hiring: While it's natural for people to lean towards hiring individuals who fit the existing team, casting a wider net and creating a more diverse working environment not only expands the talent pool but also brings fresh perspectives and ideas to strengthen the business.
By implementing these strategies, restaurant owners and operators can proactively tackle the recruitment and retention challenges in the hardest hit segments of the industry. Building a strong, motivated, and diverse workforce is key to bouncing back from the downturn in job growth and navigating the post-pandemic landscape successfully.
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