Service a little slow at dinner? It may be because your favorite restaurant is having a hard time finding and keeping workers, as the industry is facing an unprecedented labor shortage.
Worker Resignations And Job Openings At An All-Time High
The Department of Labor released the April 2021 Job Openings and Labor Turnover summary last week; the numbers are not pretty for the restaurant industry:
Workers Quitting. Workers quitting their jobs increased to new highs of 4 million and 2.7%, with a record 5.6% of restaurant workers quitting their jobs in April.
Job Openings. Job openings increased to 9.3 million and 6%, both records. Restaurants job openings increased the most by any industry, adding nearly 350,000 new job openings since March, for a total of 1.34 million job openings in April.
The U.S. Chamber of Commerce has described the labor shortage as “getting worse by the day” even making it the focus of a new initiative.
That restaurants are suffering the brunt of the shortage is not surprising, given the long hours, low pay, reliance on tips, combined with the furloughs, layoffs, and zig-zagging COVID-19 protocols since the start of the pandemic and the spike in assaults from customers refusing mask mandates.
Pandemic unemployment insurance benefits may be keeping some from returning to these types of jobs in the short term (though the extent of this is still unclear). Without a doubt, many Americans are using this as the time to change careers.
New Incentives To Find, Hire, and Keep Workers
The restaurant industry is the ultimate service industry, so it had no choice but to get creative in attacking the problem.
Chipotle is reportedly expanding debt-free educational degree options for employees.
Whataburger reportedly promoted all managers to “operating partner” and raised salaries to at least $100,000,
While some McDonald’s restaurants are taking the direct approach of raising hourly wages, another McDonald’s restaurant in Illinois gave away iPhones to workers who stay six months, while another in Florida offered $50 to anyone who came in for a job interview.
Applebee’s offered free appetizers to all who showed for a job interview in an effort to hire 10,000 employees (40,000 showed, according to Applebee’s).
Added Overtime Based On Extra Incentives
It is hard to take away benefits once given, so when the tide does turn, many restaurants may keep the benefits in place. Those that utilize incentives now and in the future may be (unknowingly) adding overtime pay too.
Overtime is calculated using an hourly worker’s “regular rate” of pay, which includes more than just the hourly rate of pay.
According to the Department of Labor, “all compensation for hours worked, services rendered, or performance must be included in the regular rate … even if not directly related to employee performance or hours worked….” Translation: more incentives often equals triggers more overtime pay for hourly workers.
Whether restaurants are aware or adhere to this requirement remains to be seen, but workers getting extra benefits may expect a corresponding bump in overtime pay.