Why US restaurant industry is facing a hiring crunch as Covid restrictions end

Owners cite capacity restrictions and other issues in attracting employees, writes John Bowden

The US restaurant industry is still down nearly 2 million jobs from last year (Copyright 2020 The Associated Press. All rights reserved)

The US restaurant industry is still struggling to make up losses incurred during the Covid-19 pandemic, with a range of factors including capacity restrictions and continued fears about the virus contributing to a shortage of available or interested employees.

Owners of small and large businesses alike have raised alarms for months about their inability to rehire laid-off or furloughed employees, as well as the shortage of new, interested potential employees.

Many, particularly conservatives, have argued that continued government assistance in the form of federal unemployment insurance benefits is exacerbating the situation, as workers supposedly make more money staying unemployed than they do at work.

The actual cause of the shortage, which is widespread and affecting restaurants of all sizes, is more nuanced and involves several factors, including pay rates in the industry which have been a longstanding concern of many even before the Covid-19 pandemic began.

Smaller, locally-owned dine-in restaurants in particular have sounded off in interviews with a variety of media organizations about their inability to find waiting staff, who rely primarily on tips for income as businesses where workers supplement their income with tips often pay rates lower than minimum wage.

Nearly three-in-four of all restaurant operators in the US now say that “recruitment and retention of workforce” is their top challenge, according to the National Restaurant Association.

One operations manager of a restaurant and movie theater in Bethesda, Maryland, told The Independent that as many as eight in ten applicants for open positions abandon their applications before the interview stage or do not appear for interviews.

Such a system is presented with a major problem in the form of capacity restrictions, which mean that waiting staff working in states with such restrictions, which are still numerous, face the prospect of either serving fewer tables over the course of a shift (resulting in fewer tips), or seeing hours cut to accommodate other employees. As a result, many are indeed facing the prospect of making less money returning to work than they do if they remain on unemployment assistance.

However, the problem doesn’t end with tipped employees; many establishments are reporting difficulties in hiring back-of-house staff including cooks and dishwashers as well, positions which frequently are paid at a fixed rate, often well above the local or federal minimum wage.

The likelihood of such positions, which would be less prone to seeing hours cut than front-of-house staff, paying less than unemployment benefits (which are boosted by $300 a week at the federal level through September) is not high, particularly in higher-income metropolitan centres where cooks and other staff can make several times the federal minimum wage of $7.25 an hour.

Other concerns factor into why back-of-house staff may be hesitant to return. A study from the University of California earlier this year found that the food industry saw some of the highest increases in mortality rates, with line cooks in particular seeing the highest risk of mortality compared to non-pandemic times out of all job descriptions examined in the study. It wasn’t clear if dishwashers and other back-of-house staff were included.

“I haven’t been back since,” one former line cook told Eater in an interview in May, “because I can’t really trust any restaurant owners to provide a safe environment for their employees.”

Black and Latino workers, who are represented in restaurant kitchens at a much higher rate than other industries, are also more likely to have family situations in which they are forced to act as a primary caregiver to a child, elderly parent or another loved one, complicating their ability to return to work.

“With fewer people in the workforce, the stimulus supports still in place, worker safety concerns, the need for caregivers to remain at home, and much greater competition with other industries for workers, operators are returning to pre-pandemic recruitment techniques for hiring,” said Vanessa Sink, director media relations for the National Restaurant Association, in a statement to The Independent.

“These include higher hourly pay rates, additional benefits, and professional development opportunities, among others. All restaurant sales are local, so in the end, local market forces will impact not only the increase in needed workforce, but also the particular incentives needed to recruit those employees,” Ms Sink added.

Bridging the health concern gap between restaurant owners and their employees is likely going to be a continuing effort by the industry, which according to federal labour statistics is still just under two million active employees shy of the number it employed in April of 2020, right before the brunt of statewide lockdowns began.

Some changes are already on the way. Hiring websites now frequently list Covid-19 precautions that individual restaurants take to protect staff and guests, and managers often list such actions they take directly on employment fliers as well.

“I think we’re at a point where people are like, ‘We’re going to have to raise our prices, because we need to pay our employees more money, and we need to offer them benefits when we can,’” executive chef Joseph Tiedmann of La Petit Grocery in New Orleans told Eater in May.

“We need to make this an attractive business to work in. At the end of the day, it’s all about being able to do more for your employees. But in order to do that, you’re going to have to pay for it somehow.”