Employees are quitting in droves. Some call it “The Great Resignation,” but whatever you want to call it, I am willing to bet it’s affecting your restaurant.
I have been talking to several clients about this challenge, which indicates to me that it’s time to collect and share my thoughts in these emails.
First, let’s talk about the problem.
There is an imbalance in the job market
The labor market is like the housing market – it functions best when there is equity in supply and demand.
Right now, we don’t have an equitable environment.
- The restaurant labor market lost about 10% of its workforce due to the pandemic and this group will never return.
- Expanded unemployment benefits make leaving a job easier than ever.
- The work environment in most restaurants is more stressful than it has ever been.
These facts (and many more) lead to the national hourly turnover rate rising well above the 100% mark. Additionally, employees are demanding more pay, benefits, and flexibility.
The result – restaurants (still recoiling from the financial repercussions of the pandemic) are having a hard time retaining their workforce, which leads to additional expenses, constant new employee training, and often poor customer service.
The result – restaurants (still recoiling from the financial repercussions of the pandemic) are having a hard time retaining their workforce, which leads to additional expenses, constant new employee training, and often poor customer service.
Customers are demanding more
Restaurants have been all but forced to raise their prices – sometimes up to 50% based conversations I have had. With higher commodity prices and labor costs, it’s all but a certainty.
(If you want to talk about what this can look like in your situation, reply to this email)
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Luckily, for most of the restaurants I have talked to, customers have been okay with the increase. This higher average check helps make up for any remaining traffic decrease.
There are, however, no free lunches! With higher costs, customers demand increased value.
If a customer is paying 30% more for their burger, they will expect 30% more value. The question is how to add that value
How winning restaurants are responding
I talk to restauranteurs daily, giving me insight into the problems they face. There are a few things you need to consider.
Remember that it’s still all about customer service.
The restaurants that are winning have found that increased customer value is coming through not just more service, but better service. The better service guests get, the more repeat business you get.
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What’s the key to good service? Excellent employees.
“Excellent customer experience depends…entirely…on excellent employee experience.”
-Tom Peters
It’s your team’s job to serve customers excellently. And, it’s your job to serve your employees excellently.
Deliver a reality check.
From an employee’s standpoint, they are seeing menu prices rising and thinking to themselves, “I should get a piece of this new profit.”
As you know, these prices are to stop the bleeding, not to pay for your vacation home. Make sure that your employees know that. They can’t be faulted for thinking about only their needs if you have not engaged them, especially in today’s market.
Have an all-hands meeting and get everyone on the same page. It’s a tough market. Costs are high. The company is hurting. Raising prices is your way to keep them employed. Rally the team. They are stakeholders and must be treated as such.
Thoughtful and clear communication is required for employees as would be for all stakeholders – vendors, investors, customers, etc.
Support your employees better than ever.
This increase in prices means that customers will expect more. Specifically, what they are expecting is a lot of customer service. Curbside pickup would have been unheard of prior to March 2020. Now municipalities have special parking for it.
This customer service comes from your team, so provide the training, tools, and resources to help them do that. Set the example by going above and beyond in serving your employees well. And, set proper expectations for them to do the same.
Other than pay, employees are quitting due to a lack of control over scheduling and poor manager communication. Focus on these, and watch employee retention go up, followed by your profit!
Want more insight on responding to the current job market?
These are just a few initial thoughts, but if you still have questions and concerns about what the “Great Resignation” is and what to do about it, let’s talk.