Nation's Restaurant News: Restaurants adapt to the new reality of today’s workforce

 By Lisa Jennings
Nation's Restaurant News, May 2, 2019

Five years ago, the proposal for a $15 per hour minimum wage seemed a ridiculous suggestion coming from radical fringe groups. ... Today, it seems restaurant operators are increasingly seeing $15 an hour as inevitable at a time when attracting and keeping good workers is harder than ever. ...

But restaurants are not dying. They are adapting by changing the way they think about attracting and retaining workers.

Perhaps the forces behind the “Fight for $15” movement can take some credit, spurring the ongoing debate around what constitutes a living wage. But the far more significant factor has been a labor landscape reshaped over the past few years by a strong economy and a declining unemployment rate, which topped 10% in 2009 and has dropped steadily since, reaching 3.8% in March. ...

Across the country, both chain and independent restaurants are struggling to compete for workers. ... Restaurants are not only competing for workers within the industry. ... In the retail world, Amazon reportedly increased its minimum wage to $15 per hour in November, and Target announced plans to hit that wage by next year. Even McDonald’s Corp., long the target of the “Fight for $15” movement, has said it would not oppose legislation that would bring the federal minimum wage to $15 per hour by 2024.

... And lawmakers in some states are pushing to get rid of the tip credit or adopting scheduling mandates.

 As Michael Lastoria, CEO of Washington, D.C.-based &Pizza, said recently, “Wage is just the starting place.”

Some, like industry observer Jim Sullivan, argue that it’s not a labor crisis, it’s a turnover crisis. Turnover for hourly workers is estimated to be more than 150%, and 75% for managers.

To combat that trend, restaurant operators are evolving to create a more visible career path for workers, offering better benefits, such as more flexible work schedules, sick and family leave, and tuition reimbursement or other education incentives. ...

At the end of the day, adaptation to today’s labor realities must not come at the expense of the customer experience, said Victor Fernandez, vice president of insights and knowledge for TDn2K, in a recent report.

“The importance of service cannot be overstated as a key differentiating factor for top-performing restaurant brands,” he said. “We constantly see a strong pattern in which adequate staffing enables a service experience that translates into improved sales and traffic.”

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Copyright 2019 Nation's Restaurant News

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