By Heather Haddon
Restaurants spent much of the past year trying to win back
customers. Now, they are struggling to win back employees.
Nationwide chains and independent eateries alike said they can't
hire enough workers to staff kitchens and dining rooms, just as
Covid-19 restrictions relax and more consumers want to eat out
again.
Fast-food operators, including owners of Jimmy John's Gourmet
Sandwiches restaurants, are offering signing bonuses for recruits.
Chipotle Mexican Grill Inc. is offering free college tuition to
employees who work at least 15 hours a week after four months on
the job.
Taco Bell is giving paid family leave to company-store managers.
McDonald's Corp. owners are assessing what pay and benefits its
U.S. employees most want, to better pitch the Golden Arches as an
employer.
Atlanta-based restaurant operator Daniel Halpern, who runs 50
TGI Fridays and other restaurants, recently increased hourly wages
and is offering employees immediate pay. He said he is still short
about 900 workers.
"You have a long wait and empty tables. We just don't have
enough servers," Mr. Halpern said.
U.S. restaurants increasingly are seating and serving customers
again, after a year when quarantining and seating restrictions
forced many to launch online-only food brands or rely on takeout
business. Sales at bars and restaurants rose 13.4% in March
compared with February, the biggest month-over-month increase since
June, Commerce Department figures show.
But servers, hosts and line cooks aren't similarly rushing back,
restaurant owners say -- whether because they are fearful of
Covid-19, have moved on to other industries or remain on
unemployment benefits. Other sectors of the U.S. economy also are
scrambling to staff up, with manufacturers, live-events
coordinators and other companies wrestling with labor
shortages.
Diners can see the effects. Some restaurant owners have said
they are having to pass along some of the wage increases to
customers in the form of higher prices, as other costs rise at the
same time. Consumer prices for fast food in March grew 6.5%
compared with last year, the biggest year-over-year increase since
at least 1998, Labor Department data show.
The labor crunch is affecting service. Some McDonald's and Pizza
Hut restaurant owners said they are closing some locations earlier
in the evening than they would have if they were fully staffed,
cutting off potential sales. Subway franchise owners are working
behind the counter to help. Some IHOP owners said they can't bring
back late-night service because of a lack of servers.
Food-service job postings on Indeed.com in mid-April stood 16.2%
higher than in February 2020, the job-listing site said. That
reflected the highest number of openings for servers, cooks,
managers, hosts and other restaurant jobs posted since the pandemic
began spreading in the U.S.
Restaurants were struggling with employment before the pandemic,
when unemployment stood at 3.5%. Covid-19 created new problems,
restaurateurs said. Millions of restaurant and bar workers were
laid off when the pandemic hit last year, and economists expect it
will take time for workers who dropped out of the job market to
return.
Supplemental federal unemployment benefits of $300 a week for
laid-off workers this year are a barrier to bringing back
employees, some restaurant owners and economists said. Federal and
average state unemployment payments can surpass the weekly pay of
an employee working 40 hours at $15 an hour. The median hourly wage
for a fast-food worker in mid-2020 stood at $11.47, Labor
Department data show.
Full-service and high-end restaurants like Wolfgang Puck's Spago
Beverly Hills, where servers can earn $100,000 a year with tips,
also are struggling to recruit workers. Mr. Puck said in an
interview that expanded unemployment benefits and new options like
personal chef gigs are contributing to staffing shortages at Spago
and his other restaurants.
"I don't think we should pay people to stay home and not work if
there are jobs available," he said.
The industry's competition for workers could intensify. Chains
including Chipotle, Starbucks Corp. and Darden Restaurants Inc.
plan to open dozens of new locations this year, requiring more
staff. Meanwhile, retailers like Target Corp. and Amazon Inc. are
hiring, too, and have boosted hourly starting wages to $15 an
hour.
"We are inundated with applications," said Richard Galanti,
chief financial officer of Costco Wholesale Corp., which raised its
starting wage to $16 an hour last month.
Chain restaurant companies are trying to help their franchisees
hire. Taco Bell and IHOP are holding job fairs to try to recruit an
additional 15,000 employees across both chains.
At McDonald's, where locations in Texas alone aim to hire 25,000
new workers starting this month, restaurant owners are surveying
managers to assess pay, benefits and other current and potential
job offerings to guide a new employee program. The company and
franchisees are "more committed than ever" to attracting the
workers to meet demand, help performance and improve McDonald's
reputation as an employer, the chain's U.S. division said in a
company email earlier this month.
Illinois-based Portillo's Hot Dogs LLC boosted hourly wages in
markets including Arizona, Michigan and Florida, and is offering
$250 hiring bonuses. The chain has hired social-media influencers
and built a van called the "beef bus" to help recruit. Still, many
of the chain's 63 restaurants remain understaffed, said Jodi
Roeske, Portillo's vice president of talent.
"We are absolutely struggling to get people to even show up for
interviews," Ms. Roeske said.
She said she fears the pandemic has tarnished restaurants' image
as reliable employers.
Earlier this month, Zella Roberts, a 21-year-old college student
from Asheville, N.C., quit her job at a local Sonic. She said she
didn't feel the restaurant did enough to enforce mask policies, and
that an average pay of $10 an hour with tips wasn't worth the
risk.
A spokesman for parent company Inspire Brands Inc. said Sonic's
starting wages are often above state and federal minimums, and the
company and its franchisees have worked to ensure the health of its
employees.
Ms. Roberts, who hopes to go into social work after graduating
in May, said fast food wasn't the right environment for her and
other former co-workers who have left. "There's huge turnover," she
said.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
April 25, 2021 10:14 ET (14:14 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From Apr 2024 to May 2024
Starbucks (NASDAQ:SBUX)
Historical Stock Chart
From May 2023 to May 2024