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Running a Restaurant in the Great Recession

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Running a Restaurant in the Great Recession

You've heard of the Great Recession, but have you heard of the Great Resignation? The term describes the labor crisis we're suffering through here in 2021. And honestly, I don't see it changing in 2022 based on what I'm seeing today. What should you be doing today to attract and keep employees for the long run? That is exactly what I’m going to cover in this video, Running a Restaurant in the Great Resignation.

I don't need to tell you about the labor crisis the restaurant and hospitality industry is in. I don't need to tell you how frustrating it is to run short staffed. I don't need to tell you how owners are afraid to hold their team accountable for fear of losing more staff.

The unfortunate reality is that we did this to ourselves as an industry over decades.

In early October 2021 at the South Carolina Restaurant and Lodging Show where I was a speaker, the keynote speaker, John Pollock with Technomics, the numbers people for the restaurant industry, said in his presentation that the steady decline in hospitality workers wanting to work in our industry and their happiness or lack thereof was nothing new. It had been getting worse year after year after year.

COVID didn't create it, nor did it make it that much worse, but it did continue that downward spiral. About a week after I heard that report, Restaurant Business wrote an article, “Restaurant Workers Are Quitting at Historically High Rates.” They reported that nearly 7% of our nation's restaurant and hotel workers quit their jobs in August of 2021. They said no other industry came close to that level of voluntary departures.

What is a restaurant owner supposed to do? Well, I'm going to give you a short list of what you should be considering as a part of your long-term plan broken into two sections:

  1. Attraction
  2. Retention

For attracting, here are three things you should put on your short list right now.

Number one: think about higher wages. We've been fearful of $15 minimum wage coming from coast to coast, from New York to California, squeezing its way into the country. This labor crisis made the $15 minimum wage a non-debate. It's not when it gets here. It's here. If you hadn’t noticed, to attract good employees, wages are going up all over the place. Now, in the beginning of the pandemic labor shortage, the knee jerk reaction was to pay as much as they had to attract new employees. I said to my members, put the brakes on. Because once you let the toothpaste out of the tube, there is no putting it back. Once you pay those higher wages, that’s your new wage bracket. I did say that if your market place starts to go up, then you have to go with it. Not the knee jerk version from $10 to $25, but if your marketplace was around $15 starting wage and now you have to be at $18 or $20 to get cooks in the door, that's something to think about if that's what your competition is starting to pay.

The make-or-break difference is creating and using a budget to understand how to calculate the impact of increased wages. For example, if all things remain the same, and your wages go up, you can’t make it all up with price increases. Reviewing your budget is critical before you pull the trigger on higher wages. How are you going to pay for it? I will tell you, you can, but you need a proactive plan in place that requires a budget.

Number two: flexibility in scheduling. I will tell you flexibility is the number one reason why line employees work in the restaurant business. And this labor crisis has taken that away from many of them. Too many restaurant owners are making their problem their employees’ problem. Servers working 40 hours or more per week was unheard of before this labor shortage. Usually their goal is to work as few hours as possible to make as much money as possible and now they’re working 40 or more hours per week. Line cooks love overtime, but for the last 12 months, 16 months, 18 months, they've been working overtime every single week and they're burnt out. They're no longer able to go to a concert or go see a friend or take a day off or swap schedules. They’re working all these hours because that's all you have to remain open. If you want to attract people, the flexibility is key. To help my members get there, for the first time ever in my career, I advised some of them to close one or two days per week so their employees could have a scheduled, guaranteed break.

Number three: provide a path for growth. Show your employees a path for promotions. Now, not everybody wants to grow in this industry. If there isn’t a path, or if there's somebody who doesn't really care about moving up, point to the opportunities for personal development. It might be English as a second language, learning how to sell better, learning how to communicate with other staff members better, product knowledge from wine, beer, or food. Make it clear in your restaurant they're always learning and becoming a better version of themselves. That's huge. And when you can show people that, you will attract good talent.

What about those people who stuck through COVID with you, or came on board during one of the hardest times in the industry and worked their butts off and they are getting burnt out and tired? How do we keep these people? Let me give you three tips in this area, too, that I want you to add to your short list.

For retention, here are three things you should put on your short list right now.

Number one: consistent management. There needs to be a manager in every shift to help support your team members, to make sure the same rules are written for everybody, applied to everybody and everyone's held accountable. Employees love rules. What they hate is the inconsistency in management enforcing those rules. When you have a leader on every shift, everybody is held to the same standard. They execute better. That consistency in management keeps people there longer.

Number two: make sure employees feel appreciated. Making employees feel appreciated doesn't mean they have to feel loved. It means they feel like they are important to the business, that their work matters. To get into the weeds with this one, read the book, “The Five Languages of Appreciation in the Workplace” by Gary Chapman and Paul White. Make sure you get a copy today.

Number three: create a positive work environment. Become an employer of choice. When a customer asks your team member if they like working in your restaurant, you want them to say it’s awesome. If they say it sucks, or say they’re looking for another job, or they don’t have a great response, that means you’re not an employer of choice. In this case, your culture needs a reboot. To learn more about keeping your employees and becoming an employer of choice listen to episode 23 of my podcast, “The Restaurant Prosperity Formula,” available here or anywhere you get podcasts. Its title is, “How to Find and Keep Restaurant Employees.”

I don’t know if we’ll always call it The Great Resignation, but restaurant owners will always remember this time in their businesses as a time when they had to go to great lengths to find good employees and even great lengths to keep them. If you follow the three ideas for attracting employees and even more importantly, the three things to do to keep employees, you’ll get results. Simply putting forth the effort to attract and keep your employees is an indication to me that you’re looking at ways to become an employer of choice. The key is to take action today.

If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful. 

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