Recruiters are expensive, but they're worth it. Operators may actually be able to lower staffing costs and increase retention rates by investing in hospitality talent agencies.
— Andrea Strong
The restaurant staffing crisis is not exactly news. Ask any operator — whether fine dining, fast casual, or quick service — and they’ll probably tell you one of their biggest headaches (behind rising labor costs) is finding and retaining staff. “Wherever I work, we are at a deficit looking for talented management,” says Beatrice Stein, a restaurant consultant for the past three decades. To answer the call, an increasing number of hospitality recruitment agencies have cropped up, helping clients recruit mid- and high-level salaried talent from CEO, to directors of food & beverage, and executive chefs — working on everything from crisis hiring to re-orgs, and general turnover.
“Nearly any restaurant can benefit from using a recruiter,” says Mike Hewitt, founder of the hospitality recruitment firm One Haus. But he finds that talent search agencies are best suited to operators who do at least $1-1.5 million sales per year or have at least three to four units. That’s because these operators can usually comfortably afford the recruiter fee, which can vary from 12-25 percent of a hire’s yearly base salary. The fee is usually collected a lump sum, or can be divided into two payments, but requires that level of liquidity.
While the fee can be steep, the investment often pays for itself quite quickly. “It’s a very expensive investment, but it’s also expensive to go through three people for same role,” says Amy Falbaum, who founded the search firm Amy Falbaum & Associates nearly a decade ago. Alfred Ehrlich, President of the 20-year-old personnel consulting firm Kitchen Maestro, says “the cost of filling a position or training unqualified candidates takes more of a toll on a business than the investment of hiring a personnel consultant to conduct a search for qualified vetted professionals.”
Falbaum adds that high staff turnover is not only a financial drain but also hurts the company culture. Hewitt agrees. “It hurts morale and it affects guest satisfaction and reviews of food and service when the GM is constantly turning over,” he says. “There are ripple effects of losing staff because of one bad apple.”
The benefits of hiring a recruiter begin with their networks, which are cultivated over years and tend to be incomparable. “It’s worth it to pay the fees for the recruiter because they have access to talent you will never have,” said Stein, who is routinely brought on to projects at their inception or after crisis, when entire teams need to be built from the ground up. “I’ve run ads for GMs and I’d get about 100 resumes and many of them have never even been managers. With 100 responses, maybe five or 10 are actually people who may be qualified. With a recruiter, you don’t have this problem. Every person they send you is qualified.”
Not only qualified, says Stein, but properly vetted. “The recruiter makes sure the resume is real and not pumped up,” she said. “They tell me the candidate’s story, review the resume, and check references and recommend that person, so I am already halfway there.”
There’s also the recruiter guarantee; most agencies will replace a hire who leaves or who is fired free of charge within a certain period of time; three months to a year, depending on the agency. “I look at it as hospitality employee insurance, said Ehrlich, whose Kitchen Maestro firm gets paid a contingency fee and provides a one year replacement guarantee.
Another advantage is that most all recruiters have themselves been in the hospitality business and have decades of organizational and staffing experience, an asset when evaluating what sort of staffing an operator truly needs.
Falbaum spent 15 years in operations and 13 in recruiting before opening her own agency eight years ago. Her extensive hospitality background allows her to work with clients who have specific needs, those who are doing complete reorganizations, and those who don’t really know what they need. “I am often asked for help in structuring management teams and setting salaries,” she says. “Sometimes those salaries are too high and I keep a client on budget. Or maybe I’ll say, To start, save some money and hire a consultant, not an executive chef. It’s like a recipe. There are 10 different ways to prepare a great chicken.”
Hewitt, who has over twenty years of experience in the hospitality industry, ranging from operations, to brand development, and human resources, sees the job as going beyond just placing people; he says it’s about becoming a kind of restaurant therapist; he says that an intimate knowledge of a client’s story is key to a successful relationship. “We become like an advisory board for any staffing-related needs,” he said. “Even when you don’t need someone, we are around to bounce ideas off of.”
For example, he finds that clients will come to him saying they need a director of operations. But after learning about their business and evaluating their current staffing, he advises them to actually hire a seasoned general manager and a couple of stronger floor managers. “Sometimes clients can save money because we come in and listen and understand how to structure their staff differently and most cost-effectively,” he said.
Recruiters are also working to bolster retention rates, which may seem counterintuitive, but the success of their hires is at the core of their work. “There is great talent out there, and there is a way to retain your great talent,” said Falbaum, who finds that most people don’t leave because of salary. She reminds her clients that employees need to be treated right. “People need to be valued and noted and noticed,” she says. “All those little things like please and thank you and praise and career development. It’s all those basic things that make your staff want to stay.”
Hewitt agrees; so much so that he has added a free service with his recruits called Recruit, Retain, Relax, a partnership with Sarah Diehl of Empowered Hospitality. The Recruit Retain Relax service includes a post-hire review of a client’s onboarding procedures to help with staff retention. “We make sure a restaurant is set up for success. We make sure that the employer and employee are on the same page in terms of expectations and performance. You don’t have to have a Google suite of perks, but you have to have offer enough incentives to get your staff to stay.”
And if they don’t stay, well, hire a recruiter.