Labor

Guests sitting at the bar inside a restaurant

August 23, 2022by David Klemt David Klemt No Comments

Datassential’s State of the Operator 2022

Datassential’s State of the Operator 2022

by David Klemt

The latest addition to the Datassential FoodBytes research series shares insights into the top three challenges most—if not all—operators are facing.

Now, some of what the report reveals paints a bleak picture. Inflation, the labor shortage, and supply chain issues persist even past the midway point of 2022.

However, operators are a tenacious and innovative group of business owners. Of course, that tenacity seems to manifest in people thinking this industry can weather any storm. That perception can come at operators’ detriment. Exhibit A: The Inflation Reduction Act of 2022 not including replenishing of the RRF. But, I digress.

“The State of the Operator & the Road Ahead,” which you can download here, is helpful and informative. As you may be aware, we’re fans of Datassential and their FoodBytes reports. In fact, you can find our synopses of FoodBytes reports here and here.

Below are some key points that operators should be aware for consideration. I strongly urge you to download this free report today.

Operator Outlook

First, let’s take a look at traffic. As Datassential points out, some hospitality business segments are performing better than others currently.

In large part, this is due to two factors: People working from home, and people returning to travel. So, operators who rely heavily on commuters and in-person workers are struggling. On the other hand, operators inside or around hotels are, per Datassential, performing the strongest at the moment.

Interestingly, though, nearly half of operators (47 percent) are seeing an increase in traffic in comparison to pre-Covid levels. Fourteen percent of operators are reporting no change in traffic. Unfortunately, traffic is lower for 39 percent of operators.

Next, sales. In comparison to pre-Covid times, more than half (51 percent) of operators report an increase. Again, 14 percent of operators are experiencing no change. But 35 percent of operators are experiencing a decrease in sales.

Finally, profit margins. Half of operators may be seeing increases in traffic in sales, but profit margins are taking a hit. On average, the industry’s profit margin is now hovering at 13 percent. That’s an eight-percent drop in comparison to pre-Covid levels.

Segment Performance

The findings regarding profit margins are likely to be the most alarming to operators. Historically, our industry has operated on razor-thin margins for decades. Dropping from an average of 21 percent to 13 is concerning.

However, context is important. The segments seeing the lowest profit margins in 2022 are: Business & Industry (B&I), Healthcare, and Colleges & Universities (C&U). Again, remote work (and learning) are largely responsible for those particular segments watching their profit margins tumble.

The strongest performers are: Quick-Service Restaurants (QSR) at 17 percent; Fast Casual at 15 percent); and Midscale, Casual Dining, and Fine Dining, each at 13 percent. Lodging is just below the current average at 12 percent.

Operator Adaptation

Inflation, rising food costs, supply chain issues, labor shortages… Operators are finding ways to cope, and in some situation, thrive.

Unsurprisingly, the vast majority of operators are increasing menu prices. In the past 12 months, 77 percent of operators have raised menu prices at least once.

These increases range from one percent a staggering 30 percent. However, the majority have kept these increases to one to ten percent. Most (31 percent) have implemented increases of no more than five percent. Just one percent of operators boosted prices between 25 to 30 percent.

Of course, raising prices isn’t the only strategy operators have at their disposal. Forty percent of operators are streamlining their menu, reducing the sizes of their menus. However, it’s wise for operators to review their menus at least every three months to eliminate poor performers.

Other strategies include focusing on value for guests (27 percent); utilizing LTOs and launching new menu items (26 percent); eliminating a specific daypart or portion of the menu (25 percent); and making portion sizes small, or “shrinkflation” (18 percent).

There’s much more revealed in Datassential’s latest FoodBytes report. Download your copy today.

Image: Luca Bravo on Unsplash

June 6, 2022by David Klemt David Klemt No Comments

Back of House Report: The Labor Challenge

Back of House Report: The Labor Challenge

by David Klemt

A recent report from Back of House reveals opportunities for operators amidst the current staffing challenge.

In their report, the restaurant technology platform suggests effective hiring and retention solutions. For example, helping staff find meaning in their work.

To download and access the report in its entirety, please visit BackOfHouse.io.

For some of the platform’s insights into staffing, keep reading.

Why People Leave the Industry

Obviously, people take jobs for a variety of reasons. Often, a person’s first job has one or two motivations: money and/or experience.

Some estimates put a gig in the restaurant industry as the first job for a third of Americans. In Canada, restaurants are the top employers for those under 25 years of age.

However, Back of House sees value in looking at a different metric: Why people leave the industry.

As Back of House states, knowing why someone would leave their job helps an operator determine what benefits to offer to retain talent.

Now, it may be tempting to assume pay is the top reason people leave jobs. Per Back of House, however that’s not the case. Broken down by age group, below you’ll find the reasons people are leaving hospitality:

Pay: 26 to 35
Schedule: 46 to 55
Lack of opportunities: 26 to 35
Lack of benefits: 26 to 35
Work environment: 18 to 25

Look at these issues through the lens of someone moving through life. When first entering the workforce, more people want to find the right employer and workplace. From their twenties to thirties, more concern is placed on moving up, making more money, and receiving benefits. And, per Back of House’s findings, time becomes more of a consideration as people age.

Meaning and Value

Per Back of House, there are two important elements of employment that keep people engaged.

One, meaning in the work they do. In other words, feeling that their work has value. Two, staff want to feel that they’re employers value them.

Of course, both make sense, no? If a person doesn’t see their role in the industry as valuable, they’ll always be looking for the escape hatch. And if they feel that they’re employer doesn’t value them, why would they continue working for them? People, as they say, quit bosses, not jobs.

So, Back of House recommends that operators demonstrate they value their team members by:

investing in their staff;
supporting their staff; and
respecting their staff.

Now, good leaders should already do all of the above. It should go without saying but if someone feels a lack of respect, support, and interest from their employer, they’re not going to remain in their role for long.

And who could blame them? That seems like a terrible workplace and a waste of a hospitality professional’s valuable time. Time, of course, that can be better spent finding a good leader to work for who will help them progress in their career.

There are further insights one can glean from Back of House’s report. To download “Understanding the Staffing Challenge,” please click here.

Disclaimer: Neither KRG Hospitality nor its representatives received compensation to promote this report. The team at KRG simply feels all operators will find value in downloading and reading it, and considering the information contained therein.

Image: Joao Viegas on Unsplash

April 25, 2022by David Klemt David Klemt No Comments

Hiring Struggles? Engage These Age Groups

Hiring Struggles? Engage These Age Groups

by David Klemt

Staff turnover rates are still above pre-pandemic levels and there’s no silver bullet solution. However, two companies have some helpful advice.

Both Service Management Group and Technomic shared their tips during Restaurant Leadership Conference. Interestingly, each company has a different approach to the current hospitality industry labor problem.

In short, both SMG and Technomic advise operators to engage with vastly different age groups. However, they each have information that supports their recommendations.

Service Management Group

Jennifer Grimes, senior vice president of client services for Service Management Group, co-presented a session with Jim Thompson, COO of Chicken Salad Chick.

SMG is a software-with-a-service platform that seeks to the employee, customer, and brand experience. One crucial element of the company’s mission is the reduction of staff turnover.

During the RLC session, Grimes shared several years of hospitality turnover rates:

2017: 72%
2018: 75%
2019: 79%
2020: 130%
2021: 86%

First, some context. The general consensus is that the industry’s average turnover rate has been between 70 and 80 percent for close to a decade. However, in comparison to other industries—10 to 15 percent—that’s stratospherically high.

Secondly, the turnover rate has been on rise since before the pandemic. Per some sources, the rate jumped from 66 percent in 2014 to 72 percent in 2015, a trend that continues to this day.

For SMG, the age group operators should seek to engage—generally speaking, of course—is 25 to 34 years old. Per the SWaS platform, this group was the most engaged pre-pandemic.

One reason for SMG’s suggestion is that Boomers appear to opting out of the workforce.

During the presentation by Grimes and Thompson, the latter shared that Chicken Salad Chick predicts the 2022 turnover rate to be just slightly above the 2019 rate.

Technomic

Unsurprisingly, Technomic had some numbers to share during RLC 2022 in Scottsdale, Arizona.

Per data provided by Joe Pawlak and Richard Shank, 70 percent of operators are still struggling with labor. Recruiting, hiring, and retaining staff doesn’t appear to be getting any easier four months into 2022.

Technomic also pointed out that the US saw the lowest population growth in its history last year: 0.1 percent.

Additionally, almost 17 percent of the country’s population is now at least 65 years old. In 2019, 48 percent of people 55 or older retired. That number is now just over 50 percent for the same age group.

Nearly seven million American consumers turn 60 each year, while four million turn 70 or older.

Logically, one may assume that Technomic is saying a significant portion of the US population is leaving the workforce. So, it’s best to focus on the same age group as SMG recommends.

However, Technomic is recommending a different strategy. Per Pawlak and Shank, retirees (mostly ages 55 and up) tend to have valuable managerial skills and experience.

Obviously, those skills and all that experience can be of great benefit to operators and our industry.

Certainly, all groups should be engaged by operators seeking to recruit, hire, and develop their teams. So, as KRG Hospitality sees recruitment, operators should craft targeted, authentic messaging that appeals to each age group.

Image: Sebastian Coman Photography from Pexels

April 15, 2022by David Klemt David Klemt No Comments

The Uber Effect: Recruit and Retain

The Uber Effect: Recruit and Retain

by David Klemt

To better understand how to recruit and retain top talent these days we can simply look at what’s known as the Uber Effect.

We just got back from the Restaurant Leadership Conference in Scottsdale, Arizona. The education was top-notch, featuring a wide range of restaurant industry experts.

One outstanding session illustrates the need for operators—chain and independent—to change their approach to recruiting and retaining staff.

Flexibility in the Workplace

According to Jennifer Grimes, senior vice president of client services for Service Management Group, people in the labor pool are after three things when seeking employment.

Generally speaking, they want better pay, better benefits, and better scheduling. Gone are the days of people focusing only on their paychecks.

And per Jim Thompson, chief operating officer of Chicken Salad Chick, the Uber Effect is largely responsible for this shift in focus. The Uber Effect refers to people realizing they can be much more in control of their careers.

In simplest terms, Uber drivers are in control of their workdays. They can work as often as they want, whatever hours they want, and wear what they want while working.

Of course, it’s not complete anarchy. There are rules, there are expectations, there are standards. However, there’s also flexibility.

Along with more flexibility in scheduling, people want the following:

workload balance;
ability to trade shifts;
better communication; and
paid vacations.

Today’s modern scheduling platforms make it simple for operators and their leadership teams to meet these expectations. With these apps, operators and leadership can:

assign specific roles to individual team members;
communicate clearly with staff;
allow staff to trade, drop, and pick up shifts; and
fill available shifts.

One Size Doesn’t Fit All

Thompson has an interesting anecdote about availability.

A Chicken Salad Chick manager conducting interviews didn’t proceed with a candidate. Asked by Thompson why they wouldn’t be moving forward, the manager pointed to the candidate’s availability.

During the interview, the candidate provided only a single day and the manager felt that wasn’t enough. However, Thompson disagreed with the manager’s assessment.

What if, Thompson posited Thompson, their availability filled a currently open shift? At least there would be one less shift for leadership to worry about.

But it went deeper than just that point. Good operators and leaders know that job interviews aren’t one-way streets. Candidates are also interviewing their potential employer.

What if this candidate provided limited availability because they’re unsure about a particular employer? They may not know the brand all that well, they likely don’t know the leadership team, and they don’t yet understand the workplace’s culture.

As Thompson says, “One size fits all is over.” Operators and their leadership teams need to be flexible.

It’s highly possible that just a few shifts in, if the narrow-availability team member is a good fit and finds the job engaging, they’ll broaden they’re availability.

Developing the Culture

Of course, the above scenario comes down to culture. And Thompson has an interesting thought on that operational element.

If an operator isn’t constantly developing their culture, it will grow stagnant. Maintaining the current culture isn’t good enough.

Failing to do so will ultimately lead to a decline in guest satisfaction. When that happens, a decline in traffic comes along with it.

It’s really rather simple: How an operator and the leadership team treats employees trickles down to guests. Unhappy and unsatisfied staff provide poor service. How long are guests going to tolerate negative guest experiences?

And no, simply offering competitive compensation doesn’t automatically equate to treating staff well.

“Competitive pay, to me, is the cost of entry,” says Thompson.

To this point, the COO, also the self-appointed chief smile officer, addresses how the restaurant chain respects personal time.

Chicken Salad Chick, founded in 2008, is closed on Sundays. This isn’t due to any religious influence. Rather, the founders, per Thompson, were influenced by what they perceived as a high divorce rate in the restaurant space.

So, the brand wants employees to have family time. That’s also why there stores are also closed by 8:00 PM. In some cases, they close at 5:00 or 7:00 PM. Again, personal and family time.

Could they generate more revenue if they opened earlier and closed later? Probably. However, their culture is crucial to their success.

Takeaway

If operators want to begin the process of truly developing a positive workplace culture, there are several questions Thompson suggests operators and their leaders should ask.

Is the brand purpose driven? Does focus on fun, family, and culture?

How can the business offer incremental value to staff? Are the pay and benefits competitive? Is the workplace safe and are their opportunities for staff to advance?

What’s the community like within the four walls? How’s the energy within those walls?

Are the processes and practices in place helping or hindering recruitment and retention? How can the processes be simplified so employees learn what they need to know quickly?

How flexible is the business, honestly? What’s being done to truly help leadership create better relationships with the team?

Finally, I’ll end on something interesting from Grimes. Analyzing employee engagement, SMG has found that isn’t just about compensation.

In fact, when it comes to what makes most people perceive their job as fulfilling, the top influencer is working with people they like. Second is salary and benefits. Third, rewarding work.

Operators need to adapt to employee expectations, just as they need to focus on those of guests. Sitting down with their leadership teams to discuss Thompson’s questions is a great first step toward developing a culture that works and rewards.

Image: Priscilla Du Preez on Unsplash

People toasting with a variety of cocktails

March 30, 2022by David Klemt David Klemt No Comments

Prepare for the New Rules of Hospitality

Prepare for the New Rules of Hospitality

by David Klemt

Guests are returning to bars, restaurants, and hotels, so you need to prepare now for the new rules of hospitality.

If you’re wondering what those rules are, wonder no more. We have a number of articles addressing them, some of which are here, here, and here.

Phil Wills, owner and partner of the Spirits in Motion and Bar Rescue alum, also has some thoughts. In fact, Wills shared his approach to what he identifies as the new rules of hospitality last week.

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During Bar & Restaurant Expo 2022, Wills presented “The New Rules of Hospitality: What a Post-pandemic Consumer Wants.”

Below, you’ll find what Wills has to say about hospitality in 2022 and beyond in three categories.

Hospitality

Wills kicked off his session with a simple question: How do you define “hospitality”? And yes, he put attendees on the spot, asking them for their answers.

It’s always at least a bit amusing that even the most outgoing operator gets shy in a conference setting. I’ve never seen so many people suddenly need to check their phones, shoes, or the ceiling tiles as when they’re asked to participate in a class or education session.

For Wills, the definition is “making a guest feel welcome, as though they’re in your home.”

Obviously, the answer is different for everyone. As Wills says, the key is considering how you and your brand define hospitality. If that seems easier said than done, Wills has some tips, presented in the context of a guest visit.

First, guests take in the sights, sounds, and smells of your space. They also consume your menu items, and converse with your staff, their party, and other guests.

Look at your business through the eyes of your guests. Now, this can be a difficult exercise, particularly if you spend a lot of time in your restaurant, bar or hotel.

So, ask team members to do the same and provide feedback. We take for granted what our spaces, food, and drinks look like.

To improve the guest experience, pay attention to ticket times and F&B consistency. This will reduce recovery incidents and phrases.

Finally, Wills recommends engaging with guests (if that’s what they want). However, he also suggests facilitating connections between guests.

Interestingly, Wills also says, “Regulars are old money. You want to get that new money.” Then, you want to convert that new money into old money. Rinse, repeat.

Training

As relates to training, Wills categorizes new hires in two ways: toll takers and moneymakers.

Toll takers take a toll on your business. They cost you money, and if they don’t receive the proper training they can chase guests away.

So, you’ll need to spend time and money to convert toll takers into moneymakers.

Speaking strictly in a technical sense, training needs to provide team members with the knowledge and tools to become moneymakers. To accomplish this, Wills has three keys to making training stick:

Don’t make training too easy. If training is easy, team members won’t retain what they’re taught. Challenge your staff.
Vary your training. There are a number of training methods at your disposal. Use multiple methods to engage your staff. Wills suggests combining shift work, book work, and tests, at a minimum.
Turn training into a competition. At this point, we’re gamifying just about anything. So, Wills recommends the platform 1Huddle to gamify your training.

Simply put, Wills says we need to find new ways to make this industry exciting to new hires.

According to the National Restaurant Association, we’re still seeing significant job losses in hospitality, foodservice, and lodging and accommodation.

In fact, we’re down 14 percent when it comes to full-service restaurant jobs. For bars and taverns, the number is 25 percent.

For Wills, offering incentives, mental health breaks, and even cash bonuses for staying in role for a number of months can draw the attention of new workers.

However, he also has another interesting idea: making people smile. On average, according to Will’s research, people smile 20 times each day. He wants to find ways to make people smile 20 times during a single visit to a restaurant or bar.

Now, Wills admits he’s still working on how to accomplish this lofty goal. I believe a key component is creating a working environment that inspires team members to smile 20 times per shift.

Image: Kelly Sikkema on Unsplash

November 8, 2021by David Klemt David Klemt No Comments

You’re Competing Against Chains for Labor

You’re Competing Against Chains for Labor

by David Klemt

Independent operators and local chains aren’t just competing with one another for staff, they’re up against global brands.

Unfortunately, that means competing against massive corporations that can offer higher wages and all manner of benefits.

However, smaller operations can still take steps to lure workers and fill open positions.

The Threat

In response to the labor shortage, many national and global chains are increasing hourly wages.

For example, Chipotle boosted wages for hourly workers to $15 per hour a few months back. Along with this boost in wages came a hike in menu prices: four percent across the board.

Earlier this year, McDonald’s also announced they would boost hourly pay. Hourly workers saw a boost of about ten percent. Of course, this chain also found itself dealing with increased supply costs. To offset a rise in costs of at least four percent, McDonald’s also boosted menu prices.

The latest to enter the labor fray is Starbucks. And like other chains, the corporation addressed the issue of hourly wages publicly.

Indeed, Starbucks’ announcement shares several details. First, staff who have worked for the company for a minimum of five years could see a pay raise of ten percent. Those who have been with the company for at least two years (but less than ten) could get a raise of five percent.

However, it doesn’t end there. Starbucks workers in the United States can take advantage of $200 referral bonuses. On average, Starbucks says hourly wages will range from $15 to $23 per hour, with an average of $17 per hour. The company expects these wage changes to be in place by Summer 2022.

Solutions

Of course, one doesn’t have to need revenue in the tens of millions or billions of dollars to compete for staff.

We’ve addressed this topic several times on the KRG Hospitality site. In particular, we’ve brought up increasing menu prices to support wage hikes. Specifically, we recommend borrowing from Chipotle and McDonald’s: Be transparent and explain why menu prices are going up.

Additionally, Bar Hacks guests like Chef Brian Duffy and Lynnette Marrero have spoken about this topic.

As Chef Duffy says during his second appearance, treating staff better is a big step toward reducing turnover. Word spreads among hospitality workers, and improved employer-employee relations is an excellent recruitment tool.

Another effective benefit? Flexible and improved scheduling which, of course, can be implemented easily via scheduling apps.

Mentorship is a powerful recruiting and retention tool. Both Chef Duffy and Marrero believe in the power of this benefit. They have decades of experience to pass on to staff that can help their careers.

Marrero also suggests implementing labor structures that corporations don’t offer. For instance, she suggests new operators are well positioned to offer earned equity, profit sharing, and co-op ownership structures.

Existing operators can also leverage Marrero’s ideas. However, they’ll need agreement from their investors if they have any.

Now that you know where labor threats are coming from, you can strategize and fight back. You may not have billions of dollars in the bank, but you’re nimble and can implement changes much more quickly. Listen to your staff and be open to making meaningful but reasonable concessions.

Image: Fernando Venzano on Unsplash

July 14, 2021by David Klemt David Klemt No Comments

Hospitality Labor Shortage not Improving

Hospitality Labor Shortage not Improving

by David Klemt

Surveys and data focusing on the restaurant and hotel employment situation paint a stark picture.

The sobering reality is that operators can’t simply point to the pandemic as the reason they’re failing to fill available positions.

Instead, we need to focus on the problems hospitality workers continue to face.

It’s not going to be easy. However, it can lead to positive change. That change can help the hospitality industry recover and thrive long into the future.

Culture is Crucial

Per several sources, millions of hospitality professionals are washing their hands of the industry.

Unfortunately, foodservice and lodging workers are citing several reasons for the exodus:

Lack of livable wages.
Inconsistent wages.
Stress levels not worth level of monetary compensation.
Lack of benefits.
Lack of mentoring and/or career progress.
Industry volatility, particularly devastating as a result of the pandemic.
Unhealthy lifestyle: Long shifts, late nights, and alcohol and drug abuse.
Cultures of harassment and discrimination.

Obviously, it’s easier to blame labor shortages on the workers. Well, being easier doesn’t make it true.

Industry and workplace culture matters. Employee turnover rates were high long before the pandemic ravaged the planet.

Rather than make excuses, operators need to look at their restaurant, bar or hotel’s culture.

Barking orders and feeling infallible isn’t leadership. Admitting failures and shortcomings—and learning from them and implementing positive changes—is how successful operators lead.

Generic Job Listings

Last week, KRG Hospitality president Doug Radkey asked a simple but poignant question on LinkedIn: Are your job listings just like everybody else’s?

He suggests knocking it off with the old standards:

“Are you friendly, energetic, and highly motivated?”
“Are you an experienced and enthusiastic [insert position]?”
“The ideal candidate must work well in a fast-paced environment and be a team player.”
List of basic job tasks.

What’s appealing about such basic, generic ads? Why would rock star talent be moved to work for operators who post these types of ads?

Instead, Doug suggests the following:

Hire for values, not experience. Training can address systems and standards, not personality and drive.
Operators should be transparent about their core values, company culture, and potential for growth.
Showcase the approach to inclusivity, diversity, acceptance, and flexibility. That is, if that’s authentic. If not, that’s a flashing, neon red flag that requires addressing.
Offer a living wage, benefits, potential for personal growth, and education.
Produce a video of team members sharing why they work at the company. This must be genuine and honest.

A unique approach to ads, hiring and onboarding can lead to an increase in employee retention.

Yes, it’s more comfortable to avoid looking internally for the roots of problems. It’s more comfortable to avoid blame. And it’s more comfortable to point fingers anywhere but at ourselves.

That’s not leadership. And it certainly won’t improve any operator’s situation, nor will it improve the hospitality industry and its opportunity to thrive.

Image: One Shot from Pexels

May 26, 2021by David Klemt David Klemt No Comments

Remote Restaurant Workers are Here

Remote Restaurant Workers are Here

by David Klemt

When people think of working from home, rarely do they picture restaurant professionals working remotely.

Normally, people associate working from home with desk and cubicle jobs across an array of industries.

A newer technology company is trying to change that perception.

New Restaurant Tech

Bite Ninja seeks to match restaurants with remote workers to online ordering and drive-thru operations more efficient.

Let’s say your business has a drive-thru window. Obviously, someone has to work that window, meaning there are labor costs that accompany it.

As operators know, it’s difficult to recruit, hire and train right now. Some states point to the $300 federal boost to unemployment as a main culprit for the labor shortage restaurants are facing currently, announcing exits to the program.

According to Bite Ninja, remote workers are a feasible solution to labor and cost challenges (at least for some operations).

The tech company trains “Virtual Cashiers” and provides on-demand access to these remote workers.

Benefits

Per Bite Ninja, the company provides operators with several benefits. First and foremost, it would seem, is an answer to staffing challenges.

Obviously, if utilizing virtual cashiers costs less than recruiting, hiring, training and employing their counterpart, that’s a benefit. Another benefit? More staff is available to engage with and serve dining room and patio guests.

On the subject of no-call no-shows, the platform claims that simply doesn’t happen with their remote workers.

While not a solution for every operation, Bite Ninja also claims upsell averages of between $40 and $60 per shift. More importantly, the company says order accuracy through their virtual cashiers is nearly 100 percent. According to Bite Ninja, the average upsell per shift pays for a venue’s hired ninja. If that’s the case and virtual cashiers pay for themselves while making an operator more money, perhaps employees can see a pay bump.

Additionally, the company tracks some key metrics for their clients, including customer volume, order accuracy, and upsells.

KRG Hospitality Takeaway

We appreciate restaurant and bar tech that helps operators lower costs, increase profits, solve problems, improve the guest experience, and increase guest visit frequency.

However, we’re not fans of tech that eliminates a position from the industry and takes someone out of the workforce.

Bite Ninja isn’t a labor solution for every hospitality operation. For those who see the value in remote restaurant workers, at least the company isn’t building robots that eliminate one or more human jobs outright.

Image: Jonathan Kemper on Unsplash

May 14, 2021by David Klemt David Klemt No Comments

These States are Ending Federal Benefits

Which States are Ending Federal Benefits?

by David Klemt

So far, 22 states across America are planning to end the weekly $300-per-week federal boost to unemployment.

Some reports suggest a few states will opt out of federal unemployment benefits as early as June 12.

Obviously, that’s significantly earlier than the September 6 expiration the American Rescue Plan mandates.

Two Sides

Clearly, the impact opting out of the federal unemployment program is largely academic at this point. We won’t know if the move will lead to a boost in hiring across the country or simply plunge struggling Americans further into peril.

One side, those who support the exit, believe the move will jumpstart the economy and hiring.

In their view, the $300-per-week benefit is a disincentive for claimants to seek employment. That, in turn, is what’s fueling the current labor shortage.

“Incentives matter,” says Montana Governor Greg Gianforte. “And the vast expansion of federal unemployment benefits is now doing more harm than good.”

The opt-out by 15 states will impact 1-1.5 million people.

Now, the other side believes opting out is cruel and will make it even more difficult for drowning Americans to get their heads above water. As they see it, most jobless people are using state and federal unemployment programs correctly.

“Let’s not take our eye off the ball,” says President Joe Biden. “Families who are just trying to put food on the table, keep a roof over their head, they aren’t the problem.”

Hospitality Industry Struggles

Obviously, the $300-per-week benefit is often cited by operators as one of the main reasons they can’t fill available positions.

Unfortunately, the reality of the situation isn’t that simple. Scapegoats may be “convenient” but they’re also dangerous—they distract from real issues.

The pandemic, mass unemployment, and current labor shortage isn’t solely the product of unemployment payment enhancements. A significant portion of hospitality workers aren’t working for other reasons. Many are leaving the industry entirely due to an array of issues.

These include workplace culture, inequity, lack of diversity and inclusion, and earning a livable wage, many among others.

Sure, it’s convenient to point to and vilify one contributor to the hiring struggles operators are facing. However, it’s clear that the industry has long-term problems with which it must reckon. Things can’t continue as they were pre-pandemic if the industry is to reset, recover and thrive in a post-pandemic world.

States Ending Federal Benefits

Montana Gov. Gianforte is the first to announce a state would opt out of the federal unemployment program, causing a domino effect.

So far, the list of states exiting the program are:

Alabama (June 19)
Alaska (June 12)
Arizona (July 10)
Arkansas (June 26)
Georgia (June 26)
Idaho (June 19)
Indiana (June 19)
Iowa (June 12)
Mississippi (June 12)
Missouri (June 12)
Montana (June 27)
New Hampshire (June 19)
North Dakota (June 19)
Ohio (June 26)
Oklahoma (June 26)
South Carolina (June 30)
South Dakota (June 26)
Tennessee (July 3)
Texas (June 26)
Utah (June 26)
West Virginia (June 19)
Wyoming (June 19)

It’s likely that more states will join the exodus.

Update: There are 22 states opting out of the federal unemployment program as of May 20, 2021.

Image: Pepi Stojanovski on Unsplash

March 18, 2021by David Klemt David Klemt No Comments

Is Gen Z the Workforce Solution?

Is Gen Z the Workforce Solution?

by David Klemt

Is Gen Z the solution to the industry’s workforce problem?

That’s one big question posed during the 2021 Restaurants Canada Show.

A panel consisting of Philip Mondor, president and CEO of Tourism HR Canada; Adam Morrison, president and CEO of Ontario Tourism Education Corporation; Jody Palubiski, CEO of the Charcoal Group; and Lori Wilson, manager of people and change at BDO Consulting have answers.

The Problem

Canada’s hospitality industry is facing a labour shortage. In fact, that has been the case since before the pandemic.

According to several sources, the hospitality industry is Canada’s fourth-largest private-sector employer. And yet, there’s a labour crisis.

This is partially due to Baby Boomers retiring. As they leave the workforce, there’s a disparity in the number of people in Canada working or seeking work.

According to a January 2020 report from The Globe and Mail, there were at least 60,000 empty positions in foodservice before Covid-19 lockdowns.

Mondor concurs with that article’s sentiment. He expects “a very large shortfall” over the next year that could force the industry into a four-year recovery.

The Solution?

Neither Wilson, Mondor, Morrison or Palubiski see Gen Z as the solution to Canada’s labour shortage problem.

Now, that isn’t to suggest that operators and managers should dismiss Gen Z. Rather, Mondor suggests including this generation as they enter the workforce without viewing them as the only solution.

“Relying on youth alone is not going to meet the demand,” says Mondor.

Instead, Mondor posits that new Canadians—immigrants—will play a significant role in the hospitality industry moving forward. In fact, Mondor expects immigrants to make up 50 percent of Canada’s workforce.

Recruitment and Training

Palubiski says that what separates Gen Z from other generations is how connected and informed they are. Screen time provides Gen Zers plenty of information about social, regional and global issues.

To recruit Gen Z, Palubiski suggests brands and businesses be transparent about their stances on issues such as sustainability and the climate.

However, that approach to recruiting isn’t just effective when it comes to Gen Z—employees and guests alike want to know where a brand stands.

Morrison says that it’s important to be cognizant of the employment market. Knowing what people are being paid, even if an operator can’t match or beat that rate, is helpful. It’s also part of an effective strategy, says Morrison, to understand the ambitions of candidates to see if available roles will match their motivations.

Retention

Once an operator has built a team, the next step—training—is key to staff retention. And not just training for the specifics of one particular role in a restaurant or bar.

Rather, the panel agrees that this industry does a poor job of documenting transferrable skills. For example, operators can help develop employees’ leadership and conflict resolution skills (among many others) that they can take into other careers. Operators must explain that benefit to employees and help nurture it.

Additionally, the panel suggests looking at training and retention in the following ways to adapt and make businesses in this industry stronger:

Invest in people, don’t just hire them. That means training and developing their skills and careers.
View hiring and training as investments, not costs.
Everyone makes mistakes. True leaders admit their mistakes, fix them, and move forward.
Ask this question: Do your employees feel a greater affinity for this industry and your business after they’ve started working with you?

In parting, operators and managers should consider this: Palubiski had to furlough 950 employees due to the pandemic. A staggering 95 percent returned when they were called back. That is effective hiring, training, development and retention to emulate.

Image: Jason Leung on Unsplash