- Leisure and hospitality is down 2.2 million jobs from February 2020 levels.
- One restaurant owner said the people they typically get to fill positions are finding work elsewhere.
- Signing bonuses and pay increases may not be enough of an incentive to attract workers.
- See more stories on Insider’s business page.
Just like many restaurants across the country, Sugapeach Chicken & Fish Fry in Iowa is having a hard time finding workers.
Chad Simmons, who owns the restaurant with his wife Carol Cater-Simmons, said the pandemic has been a difficult time for them. They did grow their business during the pandemic, but at the same time their expenses grew. The restaurant is looking to hire now that customers are coming back, but they’ve had few applicants.
“We still have not been able to be successful at attracting people. The primary people we would normally attract are finding opportunities in other areas,” Simmons said, noting that he and his wife typically look for more experienced workers. He said these workers are leaving the industry, finding jobs with higher pay, or aren’t looking for work right now because of unemployment benefits.
Restaurants like Simmons’ are struggling to find workers. According to one survey, 74% of independent restaurant owners said they’re having a harder time filling positions than before the pandemic. Teens on break from school are helping fill openings over the summer, but those workers are only temporary. Wages have increased in the industry as owners try to attract workers, but some restaurants have had to cut operating hours because of staffing issues. Even as the industry recovers from pandemic jobs losses, the leisure and hospitality industry still has a long way to go: employment is down by 2.2 million jobs from February 2020.
Restaurant owners are coming up with creative solutions to the staffing shortage
Angel Li knows how challenging it can be to find workers right now. Her sister owns a restaurant in Connecticut, which has three openings. Li, who’s a partner at accounting firm Fiondella, Milone & Lasaracina, has had to help out on a few holidays. Some of Li’s clients are restaurants, and she said that she has seen others like her sister struggle to hire and have had to find “creative solutions.”
“Currently, there is no backup plan for if someone misses a shift or needs to quarantine,” Li said in an email. “My sister is the only backup plan right now. Filling the open positions she has would often be the difference between her working until 2 am prepping for the next day, or going home at 9 pm.”
Simmons has hired high schoolers as part of a program called Scholars Making Dollars, which works with local Alpha Phi Alpha chapter in Iowa City. High schoolers get mentorship provided by the chapter and part-time work experience through the restaurant. Sugapeach also asked a a former employee who now works at Amazon to help clean for a few hours a week for pay and a meal.
“We’ve had to try to really get creative because customers don’t care about your problems,” Simmons said. “They want their food and they want it in a timely manner.”
For Li’s sister, that means hiring workers from out of state, usually New York. Her sister picks these workers up on Thursday and drives them back on Monday, providing them with a house while they’re in Connecticut.
“A lot more restaurants closed in New York than in Connecticut, so there actually are talented people in all types of positions looking for jobs there and some of them are happy to take a position in Connecticut that comes with a place to live,” Li told Insider in an email.
Workers aren’t going to come back just for bonuses and pay bumps
The quit rate in restaurants and hotels was 5.3% in May 2021, higher than the pre-pandemic rate. Some hospitality workers don’t plan on coming back to the industry, according to one survey by Joblist, even as some employers are offering bonuses. Bonuses may not be enough as an incentive, Saru Jayaraman, president of One Fair Wage, told NPR.
“It’s not enough to have a worker who’s decided, I’m going to walk away and change my life, to then flip back for a temporary boost,” Jayaraman told NPR.
Li said she knows one cafe she advises that has increased pay by about $3 per hour to retain employees.
“Even with the strong retention because of the higher wages, the owner is short-handed and hasn’t taken a day off since early 2020,” Li said.
Daniel Zhao, senior economist at Glassdoor, told Insider that signing bonuses and increased wages are helpful incentives, but “ultimately people evaluate job opportunities holistically.” He said workers think about things like pay, company culture, and benefits offered.
“For many of these employers, it’s going to be difficult to raise wages by a dollar or two an hour and expect that to beat out another job, which might have better working conditions and better long-term career opportunities. ” Zhao said.
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