Industry Report: Restaurants Face Staffing Challenges, Old and New in 2023

In the restaurant business, the only constant is change. But what separates successful restaurants from the rest are the ones that can best adapt.

2020 marked the beginning of a new era for restaurant management. The pandemic, for all its devastation, granted many restaurants a silver lining: a chance to reset. And the restaurant business has gone through a decade’s worth of change in a few short years, leading to new staffing challenges—and new shades of the old ones.

The cause? It wouldn’t be fair to say that there is just one factor spurring change. The shrunken labor pool inflation, turnover, and technology, all make up the stew that operating a restaurant is in 2023.

But those who are qualified to speak on the subject are the ones doing the work day in and day out trying to untangle the web that is restaurant management in 2023 and beyond. So we surveyed more than 1,000 restaurant operators across North America to find out what their challenges are—and what they’re doing to adapt.

Here’s what we found.

Hiring and retention remain the biggest challenge for restaurants when it comes to team management overall.

As we enter year four post-pandemic, the top challenges in team management as reported by restaurant managers and operators are:

• Hiring
• Employee Retention
• Labor Costs

When we look at just the full-service restaurants, hiring and retention are ranked at the top spot. But they also find that staff communication is among their top challenges.

On the whole, hiring and retention are restaurant operators’ top priorities.

When we look at all of the data together, it’s clear that hiring and retention are at the top of everyone’s list. Restaurants are faced with the challenge of finding the right people and creating the right environment. The restaurant labor pool shrank during the pandemic when unemployed workers left the industry for good.

As a result, the new generation of restaurant workers has different values and expectations than those that came before. They’re looking for higher wages, clarity around their roles, and a business they can stand behind and be proud of.

Here’s what a few (anonymous) operators had to say:

Both hiring and retention are as hard, if not harder than ever. Restaurants are trying new ways to bring the right staff in and keep them around for the long haul. These include increased wages, hiring bonuses, and benefits like paid vacation and retirement.

Operators look to wage increases as a top way to tackle the tough hiring market.

As CNBC reported earlier this year, the hospitality sector is seeing wage growth, particularly in the fast food and fast casual segments. In order to attract and retain talent, many restaurant operators are increasing wages well above the federal minimum wage of $7.25 an hour.

In 2021, Jason Hammel told the New York Times that he raised wages to between $18 and $24 an hour at his iconic Chicago restaurant, Lula Cafe—and it’s one reason why he hasn’t had much trouble finding employees.

In fact, wage increases are the top area that restaurants are investing their money in, according to our survey. As one operator told us:

“Employees not wanting to stay on board for very long usually quit within the first month and a half. It’s affecting us pretty heavily because then we have to start the hiring process over, then training also. We’re trying to accommodate employees with higher wages and added benefits.”

Operators are looking to invest in leadership and training programs

Second behind wage increases, restaurant operators are investing their dollars into leadership and training programs as a way to retain employees.

Operators understand that an employee’s onboarding experience is the difference between an employee who stays for more than a year and one who leaves before 90 days.

As Ellesse Piper, Operations Manager at 7 Leaves Cafe told us,

“The onboarding piece is probably the biggest piece for me in making sure that you’re welcoming someone into the company on the right foot and making them want to stay and be invested in you.”

Recommended Reading: How 4 Restaurant Managers Hire, Train, and Retain

The restaurant workforce is changing, and forcing restaurants to rethink their operations for the future. At 7shifts, we’re working to solve problems through our software tools and by sharing ideas and expertise from the restaurants at the forefront of change.

That’s why we evaluated restaurant employee retention data in 2022. We uncovered trends like which state had the worst turnover and the average restaurant employee tenure. We dove deep into why restaurant employees quit and talked to restaurant operators to discover real ways to retain them. Download the restaurant retention playbook below.

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Appendix

This data study analyzes trends and data from survey of 1000 restaurant owners and managers across north America between February and March of 2023.