Restaurant operators expect the job market to relax somewhat in 2023, although hiring and retention will remain a challenge for the industry as a whole.
The National Restaurant Association’s December business conditions survey reported that 89% of operators said labor costs were a significant challenge and 62% did not have enough staff to meet existing demand.
The survey found that operators are actively seeking to increase headcount, with 87% saying they are likely to hire additional staff in the next six to 12 months if qualified applicants become available. However, 79% of operators said they have vacancies that are difficult to fill.
Operators contacted by NRN said they are approaching the tight job market with a focus on providing their employees with a rewarding experience while streamlining operations to minimize their labor costs. They’re leveraging technology solutions and process transformations that not only improve guest experiences and increase revenue, but can also eliminate some of the pain points employees encounter while doing their jobs.
These operators are optimistic about their prospects of attracting and retaining workers in the coming year.
“I think some of the impact of the COVID environment — the stimulus checks, the remote work — will wear off and we’ll see some normalization in the labor market,” said Joth Ricci, president and CEO of Dutch Bros Kaffee. “I’m actually a bit more optimistic about the job market for the industry this year than in previous years.”
Dutch Bros, one of the fastest growing concepts in the hospitality industry, has navigated the tight labor market thanks to its strong corporate culture, a nurturing philosophy from the inside and a pleasant work environment with minimal disruption, he said.
The company has one of the lowest turnover rates in the industry, according to Ricci, and is very picky about hiring — only about one in 25 applicants gets hired, he said.
“You have to be a top-notch employer that cares about your people and pays very competitively in any market,” Ricci said. “You have to treat your people well and empower them to make decisions.”
Part of the appeal of working at Dutch Bros is that any employee can do any job at the restaurant, so workers don’t get bored doing the same tasks every shift. In addition, the company ensures that the environment in the restaurant is pleasant, with music, free clothing and free drinks, and the opportunity to earn tips on top of the hourly wage.
“You become part of something at Dutch Bros,” Ricci said. “I think that’s an environment that the company has nurtured over the last 30 years.”
Even so, the company still has to pay competitive wages, he said, noting that the company introduced a $10 minimum wage starting Jan. 1 in all states that don’t have a minimum wage above the federal rate of $7.25. dollar lies.
Maintaining open communication at Smokey Bones
Likewise, Hal Lawlor, chief operations officer at Smokey Bones Bar & Fire Grill, said that investing in the Employer of Choice position has helped Smokey Bones navigate the work environment over the past several years.
The company has found that continuous communication with workers has helped drive the success of its work strategy. For the past several years, Smokey Bones has partnered with employees at its restaurants and restaurant support center using Great Place to Work surveys, which has helped the company glean actionable insights from employee feedback.
In addition, since the second week of the pandemic, the company has been conducting “town hall” meetings for managers every Thursday to provide business updates and solicit feedback via question-and-answer forums.
“We found that it was very beneficial,” Lawlor said. “We provide a safe forum where people can ask questions and even push back initiatives within the organization in a safe way.”
The company also encourages two-way dialogue in other ways, such as through informal, one-to-one “coffee chats” where employees are asked what they like about working at Smokey Bones and what they would like to see changed.
The company is also in the process of evaluating new training platforms for both management and hourly workers, Lawlor said, with a goal of having them in pilot testing or rolling out in the second half of the year.
Monigo Saygbay-Hallie, chief people officer at Checkers & Rally’s, also said her company’s Company culture was the key to success in attracting and retaining a workforce. This includes opportunities for advancement within the company, which can include progression from hourly worker to manager and eventually to shopkeeper. As an example, she cited multi-unit franchisee Bruce Ong, one of the most successful operators in the Checkers & Rally system.
“We offer a seamless path from team member to general manager in less time than graduating from four-year college,” she said.
Other employee-centric incentives offered at Checkers & Rally’s include immediate benefits for all part-time employees for just $15 per month for employees and their families, free English classes for non-native speakers, and free GED classes and certain college courses. The company also rewards its top-performing executives with a Caribbean cruise.
“While the past year has presented its challenges, we have seen an improvement in our ability to find and retain employees at the store level,” he said Saygbay-Hallie.
Technology that improves the work experience
Technology that helps automate some processes is also helping improve the work experience at Checkers & Rally’s, he said Saygbay-Hallie. The company’s introduction of voice-activated ordering with artificial intelligence in company-owned stores last year aims to improve the work experience by streamlining order-taking and fulfillment processes, she said.
“Additionally, with a 96% accuracy rate, the system has alleviated stressors and other pain points that can accompany multitasking in the restaurants, allowing team members to have more meaningful interactions with guests and make their jobs easier and more enjoyable,” she said.
Technology implementations have also been a key aspect of Smokey Bones’ efforts to attract and retain the best employees, Lawlor said. This includes both work management tools like HotSchedules and tech solutions that can make workers’ lives easier and more rewarding, he said.
HotSchedules, for example, which the company launched about two years ago, allows customer-facing employees to be more involved in their own scheduling, with features like the ability to swap shifts with colleagues.
“It helps you collaborate at a higher level with your frontline workers and also helps increase your worker productivity,” Lawlor said.
Additionally, Smokey Bones has started using Wisely, which offers reservation and waitlist management designed not only to improve the customer experience with tools like text-based communication, but also to improve dining room management for employees, he said.
Labor management in the kitchen has been an important part of Smokey Bones’ approach to overcoming the labor shortage. The company has taken a multi-pronged approach, using technology to increase efficiencies while increasing revenue by leveraging an existing workforce. This includes, for example, the expansion of the chain’s catering operation, as well as its collection of four virtual brands, which are prepared on the same production line alongside the in-house menu.
Late last year, the company opened a “virtual food hall” called BiteHall, which includes virtual concepts The Wing Experience, The Burger Experience, Bowl Market and Tender Box in addition to the Smokey Bones menu.
The company also expanded the functionality of its kitchen display system (KDS) to include off-site orders, which has helped the company minimize its error rates and reduce work complexity for back-of-house workers, Lawlor said.
Likewise, Dutch Bros employees have embraced the technology at this chain, Ricci said, particularly the company’s mobile app.
“Our teams love it and that’s why it’s been so successful,” he said. “Our employees know that it helps them to do their job better for the customer.”
Optimization of operation and design
Operators are also investing in operational and design changes to provide better experiences for both employees and guests.
For example, last year Checkers & Rally’s unveiled its “Restaurant of the Future” concept, which included the launch of “FIT Kitchen,” a back-of-house transformation initiative aimed at providing a more comfortable work environment, simpler, more efficient service.
“The new layout now saves Checkers & Rally crew members a total of 1.5 miles of walking per hour,” he said Saygbay-Hallie.
In addition, the company is redesigning several kitchen appliances and improving its cooking processes – for example, replacing flat-top grills with folding grills, expanding the capacity of frying and grilling stations, and removing the last frying processes on most products for faster service.
“Through these advances, the Checkers & Rally team has leveraged technology, advanced equipment and layout to enhance the comfort and ease of the employee experience.” Said Saygbay-Hallie. “Everything really starts with our teams. When our employees are happy, invested, and productive, our guests are likely to enjoy their experience, too. That is the most important thing for the coming year.”
Smokey Bones has also overhauled some of its kitchen processes to save hours and is in the process of optimizing its menu to curb labor costs while providing a better experience for customers, Lawlor said.
“This year is really going to be a year of improved execution,” he said. “We have spent the last 18 to 24 months responding to the pandemic. We’ve invested in platforms like BiteHall and now we want to leverage that to maximize returns.
“There are ways that we’re doing food production in the restaurants and making sure we’re using people in the kitchens more cross-functionally when it comes to food production,” he added. “We still believe that more efficiency needs to be established in this area in particular.”