4.5 million Americans quit their jobs in November 2021, with the hospitality industry having the highest quit rate at 6.1% followed by healthcare and other industries. Restaurants have always been infamous for high employee attrition due to low pay, lack of benefits, burnout, etc. The pandemic only made it worse by adding new issues to the mix, like fear of contracting the virus, additional safety protocols, and dealing with irate customers refusing to comply with Covid appropriate behaviour such as wearing masks and social-distancing.
This ongoing staffing shortage has led restaurant owners to re-think their management models as it has a significant impact on their restaurant staff and their ability to hire and retain. It’s time to re-invent ways to manage, compensate, and reward restaurant teams and make a career in the restaurant business sustainable and rewarding.
However, in order to choose a management model, understanding the root cause behind this acute manpower crisis is important. Let’s understand that.
Why is there such an acute manpower crisis in restaurants?
Working in restaurants is no cake-walk with long shifts, unpredictable schedules, and high-stress situations for both the front and back of house staff. Pandemic has further intensified these concerns with restaurant employees having to navigate through the uncertain world of the pandemic, covid protocols, and customers who paid no heed to these concerns. Unlike other industries, restaurant workers did not have the option of working from home which led them to spending less time with their family, employees taking extra shifts to make up for those who were laid off or resigned at the start of the pandemic. It was restaurant employees who worked long hours in restaurant kitchens to keep the business running, risking their life, and all of it often for modest pay, no security, no perks and frills unlike other industries. There have been numerous reports about how overburdened restaurant industry workers have felt and their employers and management have done nothing to address these issues.
Revising pay scales is one way to retain employees, however, is that alone enough? The simple answer is no. Employers need to think of out-of-the box solutions and management models that have tangible benefits for both the employer and the employees.
Management models relevant in the new world
Traditional staff management models are not enough to address the challenges of the new-age restaurant industry. The challenges that restaurant employees face today are very different from what their predecessors encountered. Staff management models that worked in the past are not enough in the current landscape. Consider these emerging new staff management models if you truly wish to create a sustainable and happy workplace for your restaurant employees.
- Open book management
- Employee profit sharing
- Safe and inclusive workplace management
- Employee stock ownership plan (ESOP)
Open Book Management
Open book management has become popular over the years and is being adopted by many restaurant business owners too. In this form of management, owners give workers access to the company’s financial details. Doing so makes workers feel more accountable as they are now fully aware of how their actions, salaries, and mistakes affect the profitability of an enterprise. The model also involves employees in the decision-making process and gives them an opportunity to learn the basics of running a restaurant. Open book management also brings a plethora of benefits for restaurant business owners like:
- An engaged workforce
- It helps employees optimize their productivity and efficiency
- A more dedicated working staff
- New perspectives and ideas
- Transparency in day-to-day operations
Restaurant business owners are adopting this management style as it resonates well with modern transparency trends. This particular management style also makes employees feel more vested in their place of work. They feel important and valued.
Employee Profit Sharing
Employee Profit Sharing, more popularly known as revenue-sharing, is an incentive-based system where employees receive an additional payment from the profits over and above their regular salary and performance. The profit sharing model and open book management mostly co-exist, though not always. A profit sharing model is often perceived as a fair and equal system of rewarding employees. An employee profit sharing plan helps boost employee morale, nurtures loyalty, and is a good employee retention strategy. Employees are motivated to do more, as they know the more profits the restaurant makes, the better for their year-end compensation.
Safe Workplace Management
We live in an era where customers are demanding, seek instant gratification, and in many cases can be unreasonable with their demands. Restaurant employees are always under pressure to deliver service par excellence. Though delivering a stellar customer experience is important, making sure your employees feel safe is important too. Restaurant owners are now focussing on creating policies around harassment management to create a safe and enjoyable work environment for their employees. Inclusive hiring (hiring employees of different nationalities/genders/colours), making policies that put employees’ safety and their well-being first, and protecting them against harassment in the workplace by customers/colleagues/supervisors is now an area many employers are focussing on.
ESOP is a great way to reward your employees and instill a sense of belongingness and ownership. An ESOP gives your employees a stake in your company which elevates their status from an employee to a partner. They feel more involved and committed to the organization. ESOP is becoming a popular way to manage and retain employees in large food chains with multiple outlets across multiple locations.
Why switch to these unconventional models?
Any management strategy that opens a channel of open communication, brings transparency, benefits both the employee and the employer, and resonates with the changing business environment is good for a business. Acknowledging and adapting to change is always healthy for any business. Today, money alone is not the only factor that attracts job seekers, they are looking for something more meaningful.
Which management model is best for your restaurant?
The way you manage your staff determines how your restaurant will perform in the long-run. It will also significantly impact hiring, employee retention, engagement, and many other facets. Choose a model that aligns with your business goals and thought process. It’s wise to be flexible when choosing a model, depending on the situation. Discussing all management options with your employees, and taking their view on what benefits them the most can be a good starting point towards this change!