Nearly one in ten working Americans held a job in the restaurant industry in January. In the race to hire and retain skilled staff members, restaurants need to be investing in every aspect of employee welfare to consistently attract team members who want to stick around.
— Erika Adams
U.S. restaurants and bars added 36,600 jobs in January, according to the U.S. Bureau of Labor Statistics. That’s slightly down from the 40,000 jobs added in December, but significantly ahead of the 20,000 jobs accrued the month prior.
Nearly one in ten Americans in the labor force this past month were working in restaurants and bars. In the overall leisure and hospitality industry, employees worked an average of 26.1 hours per week, earning weekly wages of $425.43. On average, workers were paid $16.30 per hour.
The numbers once again indicate healthy economic growth in the sector, but along with the influx of added jobs come the issues of figuring out how to best hire and retain skilled staff workers.
Shannon Meade, the vice president of public policy and legal advocacy for the National Restaurant Association, said last month that hiring and retaining staff was “the number one challenge” facing the industry today.
Steve Heeley, the CEO of California-based vegetarian fast casual chain Veggie Grill, agrees.
“The cycle of the economy is at a high, and unemployment rates are very low,” said Heeley. “People can be very selective about where they work. Being an employer of choice is important, and being able to retain team members is also very important.”
Investing in Employee Development
Andrew Dana, a restaurateur based in Washington D.C., opened up Call Your Mother, a “Jew-ish” deli and bagel shop, last fall. Employee satisfaction was a top priority for Dana from the moment the restaurant started hiring its team.
The starting wage at Call Your Mother is generally $15 per hour. Added onto that, each employee takes a cut of the tips, which averages out to be an extra $10 an hour thanks to the crowds the restaurant has drawn since its opening. Employees also have access to health insurance, a 401K program, and free gym memberships.
Due to the extra investments, labor costs at the restaurant come in at a little above 30 percent of the business’s total operational costs. It’s on the high end for a quick service, casual dining operation, but Dana says that the higher labor costs are balanced out by lower rent costs. He specifically looks for real estate in less expensive neighborhoods to keep rent in the 2.5 to 4 percent range of total costs (typically, a restaurant’s rent costs hover in the 8 to 10 percent range).
“I’ve always looked at our business as a startup, not a restaurant,” Dana said. “I want people to feel like they can grow there and that they are taken care of and have opportunities. I don’t want people to worry. Plus, it costs money to hire and train new people. The cost of a gym membership is less than having to train and rehire all the time.”
The strategy is working out well for Dana. Call Your Mother’s 25-member team has experienced no turnover since it opened its doors in October.