Long-Term Effects of Labor Shortage on Restaurants

The hospitality industry is having trouble finding workers to come back, but that doesn’t mean they’re gone forever. Right now, the industry is experiencing a labor shortage caused by poor wages and treatment, safety concerns over COVID-19 and so much more. However once the shortage inevitably ends, the industry will have already changed to account for the lack of workers. The restaurant industry can expect long-lasting effects caused by these months of struggling to hire servers.

Better Wages Solve the Labor Shortage

The number one reason that workers aren’t flocking back to open restaurants? Insufficient wages. The tipped minimum wage is $2.13/hr federally. Often, people can make more on unemployment benefits than serving full-time and risking exposure to COVID-19. Additionally, more and more restaurants have realized that the solution to their problem is to offer better pay. Workers will flock there if you’re not offering competitive benefits, too.

In reality, people want to go back to work. Even if they do get paid fairly though, many restaurant workers report unfair treatment in general. As restaurants right these wrongs in an attempt to entice back workers fired or furloughed during the pandemic, offering livable wages and safe environments will become a non-negotiable perk for many potential hires.

Menu Prices Rise

As wages rise over time, people have more disposable income. Often, menu prices go up to accommodate both increased demand and higher wages, although upper management could also take pay cuts to supplement a livable income for lower-rung workers.

If you choose to raise your menu prices, do so gradually rather than hiking up the cost of everything all at once. That will be off-putting to customers and even loyal patrons may choose to dine elsewhere. It can also help to explain to guests why prices are going up, even just adding a small note at the bottom of the menu. Mostly, people want to help out their community members. They’ll be happy to forgo tipping and pay a little more per meal to get their servers a fair wage.

Technology Meets the Labor Shortage

Where there’s demand and no labor to meet it, innovative tech solutions crop up instead. Technology makes it easier for restaurant management to address disruptions in the flow of operations. Whether it’s reducing prep time, streamlining communication between the front and back of house, or automating the arduous accounting process, smart Point of Sale systems meet the changing needs of the industry wherever labor falls flat.

In the meantime, deal with rampant turnover by relying on intuitive POS devices like the ones powered by eatOS. It’s easy to use and train new workers on the system. Flexible service providers help restaurants through the unpredictable recovery period, through the labor shortage and whatever comes next.

What Workers Want

Even if you offer competitive benefits at your restaurant, plenty of industry workers will still go where they’re treated well and can make a long-term career. People don’t just need a living wage: They also seek fair treatment, just as much if not more.

  • Consistent scheduling can provide stability and a work-life balance that makes all the difference.
  • Give workers control over their shifts. A little more responsibility tends to pay off. For example, eatOS is partnered with 7Shifts, a smart scheduling software that makes it easy to swap with coworkers digitally without manager permission.
  • Flexible scheduling is a must, particularly when it comes to time off. Employees want PTO, sick days and to be met with understanding when personal emergencies happen.
  • Promote from within to show workers they can rise through the ranks and really develop professionally at this establishment.

Ultimately, service workers just want to be treated like human beings. Respect and proper treatment go a long way toward retention. Even once you eventually hire back a full staff and reach pre-pandemic levels of business, these expectations are taking hold of the industry. Like higher menu prices, workers demanding better pay and treatment will remain even once the labor shortage passes.

Is your restaurant ready to get back to work? Hire, retain and manage workers better with a smart Point of Sale system.

eatOS offers an all-in-one cloud-based eco-system exclusively for restaurants. From Point of Sale to Contactless Ordering, Pay & Order at Table, Kitchen Display System, Customer Facing Display, Online Ordering APP / Website and Workforce Management there is everything to help a restaurant succeed no matter the size. Click Here to Schedule a demo to learn more about how your restaurant can make a smooth transition into the world of restaurant technology made simple.

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