Features 5 minutes 03 October 2018

How High Staff Turnover is Affecting The Restaurant Industry In The United States

Like Singapore, the dining landscape in the US is facing a labour crunch with the high demand for staff and tipping among the causes.

It's the golden age of food and dining, with the number of new restaurants seemingly increasing each year. There have never been more dining establishments to choose from—and that's actually a problem. According to The United States Bureau of Labor Statistics, the restaurant employee turnover rate in 2016 surpassed a whopping 70%. That means for every 10 employees, seven will leave by the end of the year, costing restaurants precious money and time in training and re-hiring.

For many establishments, finding qualified staff both in dining rooms and kitchens is a significant challenge. In fact, 59% of restaurant operators name staffing as a top challenge to success according to ToastTab.

Across the board, cities are attracting more restaurants than they can fill, with more than 1 million across the United States as of 2017. The fact that anyone can start a dining concept is becoming the trend du jour, with a particular influx of restaurants from inexperienced restaurateurs from other industries.

Cities like Minneapolis, Washington, D.C. and Nashville have been growing rapidly as culinary destinations over the past several years. It starts with investors identifying markets that have the potential to support an increase in quality restaurants, which leads to a feeding frenzy of talented creators courting investors and an influx of new and interesting ideas.

"This phase really picked up about three to five years ago and you started to see a lot of young, hungry entrepreneurs flood [Washington, D.C.]," says Espita Mezcaleria general manager Josh Phillips. "Unfortunately, there weren't enough talented cooks and hospitality workers in this phase to meet the demand for all these new restaurants yet."

Executive chef Bryan Lee Weaver of Nashville's Butcher & Bee and upcoming Red Headed Stranger agrees. "There is a huge influx of extremely rich people, real estate folks and others just looking to cash in [in Nashville]," he says.

This leads to greater demand for talent and the ability for good or even average workers to go wherever they want, whenever they want, practically naming their price.

"There is free agent mentality among many workers," continues Phillips. "They are essentially shopping around for the right restaurant to call home. There is always someone hiring, so if you are not 100% satisfied with your job, the grass is always greener somewhere else."

"[There are] a great many entering the job market for the first time. Consequently, job stability and employer loyalty are not their priority," says David Howard, president of Washington, D.C.'s The Neighborhood Restaurant Group (The Partisan, Iron Gate, Hazel, etc.).

For many dining room staff, pay is predominantly reliant on tips. This creates a leap-frogging mentality of servers and bussers searching for more covers and/or higher check averages, which creates disruptions in the service chain and empty spots in the kitchen and on the floor until they can be filled.

"They, like all of us, like stability when it comes to income," says Howard. "So whenever there are seasonal fluctuations, new restaurants openings, reduction in restaurant sales, scheduling difficulties, etc., staff often move to keep the best paying positions."

And the surge of new restaurants only exacerbates this already problematic churn.

"There is also a group of workers that essentially are capitalizing on restaurant openings, hopping from one new restaurant to the next knowing that the first several months are generally buzzy and busy," says Phillips.

On top of the skyrocketing number of restaurants are other cultural industry norms that perpetuate the churn and burn mentality.

Now in the glaring media spotlight, old-school "kitchen culture" contributes to what many see as a negative working environment of mental and physical stress that leads to burnout, discouraging great talent from entering the industry. "Traditionally, restaurant jobs are stressful positions requiring long hours and people just get burned out. [...] This is often why great people stay away from our industry," adds Howard.

And perhaps the lack of job stability and employer loyalty, coupled with kitchen culture, has led to a widely observed change in etiquette norms and expectations. "I am surprised by the number people that simply don't show up to an interview that they have set up, don't show up to the job they applied for and were hired for or sometimes simply walk off the job," says Howard. Weaver continues, "I used to have a laundry list of things in my head just for people to get in the door. At this point my main qualifier is—do you show up? And that's about it."

Weaver also sees staff expecting advancement at an unreasonable rate as a contributing issue, wanting to go from busboy to sous chef overnight. "Folks whose knives are barely sharp enough to function as spoons expect the world. The reality is and has always been that it takes an enormous amount of work and time to learn this craft."

Kelley Jones—founding partner, president and COO of Hospitality Alliance—shares, "Staff in kitchens are much different today than 15 years ago. In the days of celebrity chefs and food TV, it is actually harder to engage restaurant teams to have loyalty because the thought is that advancement should be much quicker than reality."

Okay, but how does this affect the diner?

Guests feel the ill effects of poorly staffed establishments with either lackluster service and food or fewer opportunities to dine.

"This year we opened a restaurant and because of the inability to find staff, we had to delay opening for lunch and then delay private events," says Howard. "This disrupts the marketing strategy, causes operational inefficiencies, reduces availability of shifts for staff already hired and consumes cash while we get up to speed." And for some restaurants, this means offering less reservations or seatings in order not to compromise quality of service.

When Weaver has a full staff of cooks who have been working together for a year or more, "they're going to understand the flow of the restaurant and know every station." This translates to faster and more consistent service for guests. The cooks know how dishes should taste and can spot mistakes before they leave the pass.

And burnout is obvious. Management level employees rarely work fewer than 10 hours per day, while 12 is more common and 14 hours or more is not rare. Five- or six-day work weeks are standard. Hourly employee schedules vary greatly by market; in places where the minimum wage is $15 or more, overtime is less common, but in other markets, hourly employees tend to work similarly longs days as management.

Numerous studies suggest that working over 40 hours a week leads to a decline in cognitive functions. In a restaurant, this could be the reason why your server makes a mistake with your order or seemingly disappears, why the cook burns or undercooks your dish or any other slew of dining mishaps. In a world dependent upon repeat guests, missing the mark during a diner's first visit can mean losing money in the long run.

"In great restaurants, those mistakes are more often the result of an exhausted team, not one that doesn't care. That exhaustion is often the result of being understaffed," says Alison Arth, director of development for Soigne Hospitality (Gavin Kaysen's Spoon and Stable and Bellecour) in Minneapolis.

So how are restaurateurs supposed to set the table for success?

However controversial the subject may be, many of the people interviewed for this article agreed: eliminate tipping. Or at the very least establish a transparent tip pool that guarantees a stable hourly wage while working towards erasing the delineation between front and back of house.

Arth believes that the tipping pay structure in most full service restaurants is a huge driver of employee attrition. "Tipping culture inevitably creates work environments in which salaried leaders working the most hours, performing the most critical and complex responsibilities earn significantly less than the people they're charged with managing. It's fundamentally backwards and creates an impossible-to-navigate conundrum in which superstar cooks, bartenders and servers who want to take the next step in their career are forced to either accept making tens of thousands of dollars less per year to grow professionally or make a lateral move to a different company in order to feel like they're still being challenged," he says.

Tipping can also create tension between staff and management. "Let's face it, tipping and tip pools can muddy the waters and create distrust among front of house workers and management," says Phillips.

Instead, some establishments feeling the sting of a dried-up talent pool are trying to offer more meaningful benefits in line with what people expect from a career, not a job, like living hourly wages, competitive salaries and health, life, dental and vision insurance to attract and retain skilled employees. Some are even offering 401k programs with company match, paid vacations, discounted meals and staff appreciation parties, as is the case with The Neighborhood Restaurant Group, Soigne Hospitality Group and Weaver's restaurants.

Phillips also reminds operators the need to develop food and drink programs that excite the team. "If they can't get excited about what we're doing here, it is difficult to keep them engaged."

An emphasis on mental and physical health is also needed, and to create a safe work environment. "We need to start caring more about the people who are putting in the work and create a nurturing environment for all staff," says Weaver.

At Espita Mezcaleria there is a zero tolerance policy—for both team members and guests. "We talk about harassment with our team frequently so they know it is safe to bring it to our attention. Our tip pool ensures that our staff doesn't face any significant financial penalties if we need to ask a guest to leave. Our openness about harassment makes sure that everyone knows the lines they can't cross and our willingness to fix a problem," says Phillips.

There are lots of issues, big and small, to address in order to solve the employee turnover at large, but these suggestions give the industry a good place to start.


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