Though labor shortages in the restaurant industry sparked by the pandemic appear to be easing, restaurant operators told The Food Institute the fear of immigration raids is now interfering with operations, leading to chronic understaffing.
A recent report from the National Restaurant Association and Workday found “understaffing is a material drag on growth, service, quality and sales.” Just being down one employee can lead to hundreds of dollars in losses per shift. High turnover also is a profits killer with 80% of operators saying they are hurting.
“Although the labor market has stabilized since the ‘Great Resignation’ of 2021, staffing remains a persistent challenge. Improved applicant flow may allow restaurants to prioritize quality over speed, but operators must keep hiring to stay in business. Thus, the need for smarter staffing strategies that support retention, operational stability, and long-term resilience,” the report said.
Nearly 16 million people worked in restaurants last year, representing about 10% of the national workforce, and 62% of operators said recruiting and keeping employees is a real headache.
“The reasons for staffing shortages are both cyclical and structural,” Milos Eric, co-founder and general manager of OysterLink, told FI, noting government statistics showed 44,000 hospitality jobs were added in March alone, but 167,000 openings remained unfilled nationwide.
Eric said deportation is compounding the problem, considering government data shows 37% of cooks and 5% of dishwashers are foreign-born.
Sarah White of Westover Taco said fear of Immigration and Customs Enforcement is a real problem taking a toll on the back of the house, yet she remains leery of hiring overqualified people to fill these critical roles.
“We are also having people apply for jobs, but they are often seriously overqualified and worked for the federal government before DOGE [Department of Government Efficiency]. There is a fear on our part as operators to hire them because we know when a job in their field comes open, they will be gone and we will be looking to hire and train again,” White said.
Izzy Kharasch, president of Hospitality Works, said since 2019, workers have been hard, but not impossible, to find.
“At that point restaurants were seeing how robots and other technology could fill those positions. Now, I am finding it a bit easier to fill server, busser and cook positions but the turnover rate is still high,” Kharasch said.
And though increases in the minimum wage and the elimination of taxes on tips have encouraged more people to wait tables, a restaurant that had a $200,000 in 2019 is now paying $300,000, Kharasch said.
So, is technology the answer?
“We can’t remove human workers like some jobs. Hospitality means real people taking your order, cooking, and delivering your food,” Westover Taco’s White said. “Yes, there are QR code orders and even robots that can carry food to the table, but we really rely on the personal touch only a human can give.”
Improved working conditions are the answer, said Rick Camac, executive director of industry relations at the Institute of Culinary Education.
“PTO [paid time off] and other perks (health and sick leave) that one gets from most other industries, more flexible schedules, better treatment, better culture and better pay. Not a small request but that’s how you bring new people into the industry and get experienced ones to return,” Camac said.
The NRA/Workday report noted the use of technology has made hiring easier and fears it would eliminate jobs is fading with just 6% of operators saying it has let them reduce staff.
An essential element of hiring and retaining employees is making sure they understand their role, said Swasan Abulan, franchisor and CEO of Shawarma Press. Abulan makes employees members of a crew, rather than hiring them for rigid roles.
“Employees are cross-trained and can fill in at any station. Cross-training is essential during labor shortages and enables flexible schedules and the accommodation of days off for team members without impacting operations. We also noticed that during serious shortages, hiring multiple part-time employees to work shorter shifts that were normally covered by a full-time employee was helpful until full-time employees were back on the job market,” Abulan said.
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