Restaurants work to counter talent crunch
Due to oversupply of restaurants, local insiders share their strategies for addressing the shortage of human capital.
With the Grand Rapids-area unemployment rate at 3.9% as of July, local restaurateurs are pouring their energy into finding ways to attract and retain workers.
The shortage of workers is nationwide and cuts across all industries, with the national unemployment rate hovering at 3.7%, according to the U.S. Bureau of Labor Statistics.
But for the foodservice sector, which already tends to have high turnover and slim profit margins, the talent crunch can be especially difficult, requiring proprietors to brainstorm ways to not only keep the status quo but meet the demands of growth.
James Berg is managing partner of Essence Restaurant Group, which owns and operates Bistro Bella Vita in downtown Grand Rapids and Grove and The Green Well in the city’s East Hills neighborhood.
The latter establishment recently decided to take Mondays off in order to give employees a dedicated, reliable break each week.
Grove already takes Sunday and Monday off, and Bistro Bella Vita runs full days Monday-Thursday but only serves dinner on weekends.
The Green Well management took to Facebook to explain the decision on Sept 13: “Essence Restaurant Group has made the decision to take Mondays off at The Green Well due to the labor shortage in the hospitality industry. Our beautiful city is growing, and we’re happy to be a part of it, but with that comes an undersupply of restaurant staff and an oversupply of restaurants. Simply put: Our team’s well-being comes first and maintaining our company culture and core value of kindness is our highest priority.
“This will allow us to uphold our standard of providing exceptional hospitality with food and service that’s always better and always fun. We will remain open for our normal business hours Tuesday-Sunday. We apologize for any inconvenience this may cause and thank you for your patience.”
Berg said the decision to take Mondays off wasn’t in any way based on sliding sales, as Mondays have always been a busy day for the restaurant.
He said generating one less day of revenue may be counterintuitive, but he believes it will be a smart investment for The Green Well.
“We were really concerned about the kitchen because that’s the manufacturing side of it, you know? Having that day off for those folks is huge,” Berg said. “Their personal well-being, their happiness — all of that goes up, then their production and their execution go up.”
According to the Michigan Restaurant & Lodging Association’s most recent member survey in December, restaurants’ labor costs as a percentage of sales were at 30% in the fourth quarter of 2018.
Berg said this budget imbalance is caused mainly by an oversupply of restaurants in the market — depressing sales for individual restaurants — and an undersupply of workers to staff them all, which has driven up wages and benefit costs.
“We don’t have a good system like we’ve had in the past where we were able to access more people. We’re just not able to do that in today’s climate,” he said. “So, the past couple of years, it has just been really rough on our industry; it’s been a huge tax. Any improvement you make on the sales side is sucked up in your labor.”
As a result, Essence Restaurant Group is now devoting about 25% of its marketing budget to recruitment.
Combined with strengthening the company’s “internal culture,” Berg said he hopes this will help the restaurant improve its staffing levels over time.
Essence currently is about one or two positions away from being fully staffed across all its restaurants on a consistent basis, Berg said.
As hard as it is for locally based, full-service restaurants, quick-service chains also are having a tough time navigating the labor shortage.
Steve Stephan is owner-operator of four Culver’s franchises in the Grand Rapids area — at 28th Street in Cascade; on Alpine Avenue; on East Beltline Avenue; and one in Cedar Springs.
Currently, Stephan’s four Culver’s locations employ 45-60 people per store, ranging in age from teens to adults in their 70s.
He said finding the right people — who are friendly, hospitable, good communicators, team players and have a genuine passion for customer service — is harder than ever.
It’s perhaps more important to find candidates with those soft skills than it is for them to have prior restaurant experience, he said.
“We’re not lowering our standards (on soft skills),” Stephan said.
Instead, he is using social media to advertise — Facebook ads for “older” workers and Instagram for younger ones.
Hiring teenagers younger than 16 is tricky because child labor laws restrict their hours to after 3 p.m. or on weekends, Stephan said.
Nonetheless, he has started hiring two to three 14- to 15-year-olds per store at the beginning of each summer who show aptitude to be trained for positions of increasing responsibility while they have plenty of free time. They will then be able to be retained year-round for the next few years until they go off to college “or even after if they go somewhere local,” he said.
In addition to better digital marketing and a robust training program, Stephan offers educational scholarships for students, better employee benefits and has recently instituted a 10% profit sharing opportunity for employees.
He added he also provides the opportunity for employees to attend local certification classes and has done his best to provide “open communication of how the business is doing” while recognizing employees’ “successes and milestones.”
Berg said it’s best for restaurants — whether locally or on a national level — to go with the flow during this season.
“I always say, ‘What you resist persists.’ So, we’re just in a moment of going with the change right now.”