The Restaurant Labor Market in 6 Key Statistics?
Slowing turnover, steady unemployment and flat real wage growth. The restaurant labor market is cooling, statistics show. To understand why, one has to look at the state of the sector in early 2020. That spring, pandemic-induced mass layoffs and unemployment insurance programs implemented to forestall a catastrophic loss of income made workers more likely to look for new jobs. When hiring picked up later that year, low-wage workers — like those in restaurants and hotels — had more bargaining power at the individual level, said Elise Gould, a senior economist at the Economic Policy Institute. As a result, wages began to grow. “Low-wage growth between 2019 and 2022 [was] much faster than any other business cycle that we’ve had in the U.S.,” Gould said. As employer competition for workers heated up, prospective employees were able to exercise greater discretion in taking jobs, Gould said, further increasing wage growth. In foodservice and hospitality, wage growth outpaced inflation in 2021 and 2022, a stark contrast to most industries, which saw wages lag behind increases in the consumer price index. But in recent months, that wage growth has started to moderate, Gould said. This trend may be due to a gradual loosening of the labor market, meaning the number of job openings and job seekers is converging as employment nears pre-COVID-19 levels. According to one working paper from the National Bureau of Economic Research, high turnover, low unemployment and a high number of job openings per applicant in low-wage sectors was significant enough to measurably decrease worker pay inequality through wage growth. Data shows that sectoral employment has nearly reached pre-pandemic levels and unemployment in the sector is up year-over-year, while hires, quits and total separations have all fallen in recent months. Taken together, this data shows a clear, if small, loosening of the national restaurant labor market, indicating that workers are losing some power to demand high wages and exercise discretion in job choices.
How Data-Driven Decisions Help Restaurants Stay Competitive
Today data is an increasingly important part of how restaurants create value. Restaurants today don’t look much different than they did two decades ago — tables and chairs in the front and a kitchen in the back. At first glance, you wouldn’t know that this enormous industry (nearly $937 billion in annual revenue in the U.S. alone in 2022) is in the middle of an exciting, data-driven transformation in adapting to changing customer expectations and intensified competition from new business propositions, such as cloud platforms. In fact, IT is an increasingly important part of how restaurants create value, from how consumers choose a place to eat, make a reservation, give their order, and pay their bill to how they keep their memory of their evening out and share it with their friends. Customers generate data in almost every step along their journey, ranging from their channel preferences and mode of reservations to valet parking, point-of-sale (POS) records, and feedback systems. On the supply side, detailed preparation and food resource–management records enable restaurants to optimize their inventory and reduce waste. Overall, the volume of useful data to manage customer experience along with profitability has multiplied. This rich buffet of data provides restaurant managers with a wide variety of novel opportunities and business models, such as “ghost kitchens” (industrial kitchen spaces that only offer delivery service) and customer data mining. “We use data to delight customers — leverage data to offer a personalized menu and reduce their wait times during peak hours through better labor and menu management,” the COO of one restaurant chain told us.
Bielat Santore & Company – Restaurant Industry Alert
NEW LISTING
WALL TOWNSHIP, NJ PLENARY CONSUMPTION LIQUOR LICENSE FOR SALE
ASKING PRICE $600,000
This license authorizes the sale of alcoholic beverages for consumption on the licensed premises by the glass or other open receptacle and also allows the sale of alcoholic beverages in original containers for consumption off the licensed premises.
Below are additional NJ liquor licenses Bielat Santore & Company has within its listed inventory…
Long Branch “C” Liquor License – Type 33…Asking $350,000
Jackson “C” Liquor License – Type 33…Asking $400,000
Seaside Heights “C” Liquor License – Type 33…Asking $250,000
Berkeley Township “C” Liquor License – Type 33…Asking $275,000
Neptune City “C” Liquor License – Type 33…Asking $400,000
Old Bridge “C” Liquor License – Type 33…Asking $400,000
Call 732.531-4200 for additional information.
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Why a Blended Capital Strategy is Critical for Emerging Restaurants
Full Course founder Lauren Fernandez shares. A blended capital strategy is critical for emerging restaurants looking to grow beyond their first unit, according to Lauren Fernandez, CEO and founder of investment firm Full Course. Fernandez, who also has experience as general counsel for Focus Brands and as a franchisee of 11 Chicken Salad Chick units, shared a primer on restaurant finance options on Monday at CREATE: The Experience, as one of three TED-talk style presentations. Fernandez started by outlining the most common funding sources for all startup businesses, not just restaurants: personal savings and credit, friends and family, and crowdfunding, or what she called “an extended friends and family raise.” “[Founders] don’t think beyond these wedges as they grow beyond one unit,” she said. But they need to, because fewer than 10% of startups get any funding at all, and by their 10th year, almost 70% of U.S. businesses that do get off the ground will have failed. Only 4% of U.S. businesses hit $1 million in revenue, Fernandez said. She talked through both the macro and micro factors that impact funding decisions for restaurants, urging operators to have regular conversations about their options. “This is not a once-a-year conversation,” she said. In addition to the top three funding sources for startups, options Fernandez outlined were broken down as debt, equity, and gift. She encouraged restaurateurs to pursue a blended capital strategy, incorporating all three types of financing into a business strategy. The types of funding include:
Get Your House in Order Before Bringing on Investors
Restaurant investors shared advice for bringing in financial partners. Plan to look for investors? The first thing you need to do is get your house in order. But for an emerging restaurant concept, that can be a challenging task. At an Investment Summit on Sunday—which was literally on the summit of Mt. San Jacinto in Palm Springs, Calif.—several prominent investors who work with emerging brands offered some advice about what they look for in considering investments. Finding the right investor partners is very much like a marriage, and, for many people, will last longer, said Satya Ponnuru, general partner of NewSpring Franchise. So, it’s important to be prepared for potential storms ahead that could impact the match. “In any great partnership or marriage, it will be the challenge that defines you, not how things are going when it’s great,” said Ponnuru. Organize your business so you’re functionally sound. “Not everything has to be perfect,” said Andrew Smith, managing director and co-founder of Savory Fund, which includes in its portfolio brands like Swig, Crack Shack, Pincho Burgers + Kebabs, and Mo’ Bettahs. But restaurant companies need to be ready for scrutiny when investors dig in and try to understand your business before they part with their money. Here are some strategies for getting your house in order before approaching potential investors:
The Difference Between a Restaurant Coach and Consultant
And why every restaurant needs the former. The COVID-19 pandemic of 2020 did two things. As a negative, a lot of restaurants closed forever. This devastated millions of people, their families, and supporting businesses. The pandemic also really hurt us mentally and emotionally because restaurants were one of the few places where people met socially and were cared for by other human beings. The positive side of all of this is that it forced us restaurateurs to creatively look for solutions. In this process, we had to do things differently. As I wrote about in last week’s column, we had to do a whole mind shift. We had to look at all of the false beliefs we thought we were supposed to do to be successful. For me personally, COVID was really rough. I had been recruited by restaurants my entire career and rarely had to seek employment. And up until the crisis, if I did apply, I always had a new gig really fast. But this time, no one in Nashville was hiring because our industry was hit really hard by bad city policy. I not only couldn’t find a job for the first time in my career, but my wife was now a stay-at-home mom with our 1-year-old son. For this reason, I started my coaching company. So, now that I’ve shared my personal story, let me explain why I chose to coach rather than consult, and why everyone should have a coach. A consultant is a professional who has a certain area or areas of skillset and has chosen to go out and share that skill for a price. A coach is also a professional who has a certain area or areas of skillset and have chosen to help others as well.
One Way to Reduce Cost, Improve Operations and Simplify Menu Communications
How to use menu complexity scores. Understanding menu complexity scores is important for any restaurant owner as it helps establish a rating for each menu item based on its complexity. The rating is based on seven key factors that play an important role in the profitability of your business. It’s essential to know your menu complexity scores as that knowledge can have a significant impact on your restaurant’s bottom line. Low-scoring menu items are less complex, while high-scoring ones are more complex. The seven key factors that determine the complexity score of a menu item are assembly average, cook average, cook assembly rating, total number of prep recipes used, number of unique prep recipes used, number of unique SKUs, and number of stations needed to produce the item. Once the rating numbers for each factor are added up, an overall complexity score for that individual menu item is formed. This exercise is conducted for every item on your menu, and once the complexity scores have been determined, you can use them to your advantage. By having menu complexity information at your fingertips, you can be sure that you’re always making the most strategic decisions possible to increase your profitability and bottom line. There are multiple benefits, including:
High-Volume Holiday Recruiting Strategies
Hiring top talent can be a daunting task for any organization. However, for restaurants dealing with high-volume recruitment needs, the challenge is even greater. The need for high-volume recruiting typically arises from rapid growth, seasonal demands like the upcoming holiday season. While high-volume recruiting can be an exciting indicator of organizational growth, it poses unique challenges for hiring teams. First, hiring teams often encounter tight timelines when managing high-volume recruitment. The need to fill multiple positions swiftly can lead to rushed decision-making, potentially compromising the quality of hires. The sheer volume of applications to review, screen, and interview can be overwhelming, leaving recruiters with limited time to thoroughly assess each candidate. With a larger pool of applicants, finding top talent becomes more challenging. Hiring teams must sift through numerous resumes and applications to identify candidates with the right skills, qualifications, and cultural fit. The risk of overlooking qualified candidates or inadvertently hiring under qualified individuals increases, impacting the overall quality of the workforce. Maintaining a strong employer brand becomes crucial in high-volume recruiting. A company’s reputation and image play a significant role in attracting qualified candidates. However, when hiring teams need to fill multiple positions rapidly, it becomes challenging to provide each candidate with a positive experience and effectively communicate the organization’s values and culture. Scaling up recruitment processes to handle high volumes of applicants requires efficient systems and streamlined workflows. Manual processes can be time-consuming and prone to errors. Hiring teams need to leverage technology, such as applicant tracking systems (ATS) and automation tools, to manage large applicant pools, screen candidates, schedule interviews, and track candidate progress effectively.
Is Your Bar/Restaurant Safe?
Fire Prevention Week. As a result of the Great Chicago Fire that killed 250 people in 1871, the National Fire Protection Association has declared the public observance of Fire Prevention Week since 1922, marking more than 100 years this year of the public observance. The holiday was later cemented by President Coolidge, marking the longest-running public health and safety observance on record. Society Insurance has been working alongside business owners for more than a century, seeing first-hand the devastating effects a fire can have on the establishments that make communities great. Fire departments across America responded to an average of 8,240 structure fires at eating and drinking establishments every year between 2012 and 2016. These fires resulted in two civilian deaths each year on average, along with 115 injuries and $246 million in property damage. The theme of this year’s Fire Prevention Week, October 8-14, is “Cooking safety starts with YOU.” Ahead of this year’s Fire Prevention Week, Society Insurance has put together top tips for bars and restaurants to better protect their building, staff and patrons, including by properly maintaining cooking equipment, avoiding flaming shots, creating safer smoking controls, and implementing the safety procedures recommended by industry experts. ” Cooking equipment is probably the most important thing inside a restaurant and/or bar – and it’s also a leading cause of fires. These fires are often due to failed, aging equipment; improper installation and maintenance; poor cleaning practices; and inattentive or careless use. Bar owners can mitigate these risks by hiring qualified professionals for installation, maintenance, and cleaning service. Additionally, they can train employees on proper cleaning, frequency intervals and safety procedures. When it comes to your expensive equipment, don’t take shortcuts. Get your equipment serviced regularly by an experienced technician. Take a hard look at your systems and procedures and make changes as necessary to ensure your staff, customers and business stay safe.
Did You Know?
Strategies for seamless kitchen moves. You’re excited to take your business to the next level. However, you’re probably also feeling stressed about transferring your equipment and ingredients from one commercial kitchen to another. Not only do you have to worry about moving high-value and fragile items, but you also have to find a way to streamline the move so it doesn’t interfere with your business operations. This guide features practical strategies you can use to simplify the moving process and relocating your commercial kitchen with ease.
Employee Tip
N.Y. launches program to turn more immigrant asylum seekers into restaurant and hotel workers. In a pilot program likely to be closely watched elsewhere, the state of New York is acting as matchmaker between newly arrived immigrants who have been cleared to work and 379 companies that are eager to hire them. About 90 restaurant and lodging employers are among the workplaces participating in the placement program. The initiative, announced yesterday by New York Gov. Kathy Hochul, is intended to address two of the Empire State’s vexing issues.