If you’ve waited far longer lately for a table at your favorite restaurant, or noticed that the owner is now filling in by serving or bussing tables, you’ve seen the foodservice industry labor crisis playing out first hand.  

And of those closest to the crisis – foodservice industry operators including restaurateurs, retail food operators and specialized food operators for businesses and schools – 90% aren’t confident that it will be resolved this year, according to the latest “Labor Deep-Dive” issue of Datassential’s Operator Check-In series. 

That’s a stark contrast from just one year ago, when 25% of foodservice decision makers predicted the labor shortage would be resolved within six months. 

With this growing expectation that labor shortages and surrounding issues will continue to be a problem into 2024, how is the environment changing? And what new strategies are operators using to bring on new staff and convince them to stay?

Here are six insights from the report: 

1. Operators this year are slightly more optimistic about their labor situations, but almost three-quarters (72%) of operators are still struggling with hiring and retaining staff. Only 6% of operators say labor and staffing are an area of strength for their business.
2. Most operators have chosen to offer better pay and schedules rather than changes to benefits, leave policies or other investments. 58% of operators say they offer starting wages above minimum wage, while 28% are considering it. And a somewhat smaller segment of operators (48%) say they’ve restructured to make shifts more predictable, while 28% are also considering this.
3. And even if they had the money to address labor issues as a whole, more than half of operators would still prioritize short-term hiring over long-term investments like automation or increased training. Only 14% say they’d hypothetically invest first in front-of-house automation to like self-order kiosks to lessen the burden on customer-facing staff.
4. If suddenly short-staffed, more operators are willing to step in themselves rather than inconvenience their employees. 68% would have a manager cover a missed shift.
5. Since last year, operators are still confident that two-thirds of their employees are either reliable or committed to a career in foodservice. Operators say that almost half (44%) of their staff seems committed to their jobs, including having an interest in growth and advancement and providing great service.
6. Rising food costs are operators’ top current operational challenge, followed by inflation and rising labor costs. It may seem unrelated, but this point is a critical one. Beyond the parallel issue of rising ingredient costs, food costs are actually tightly woven with labor concerns. Here’s why: As restaurants and other operators see the labor shortage persisting, they may move to use more prepared foods, opting for more expensive components to make up for being either short-staffed or having more recently-hired inexperienced staff.

This is a critical issue for manufacturers to adapt to as well: offering food service operators products that will save time in the kitchen or make dishes easier to prepare will be winners in this prolonged labor shortage environment. 

In Datassential’s OneTable: State of the Operator report last year, operators said they would turn first to product formats that were versatile, long-lasting and convenient, including shelf-stable, frozen, fully-prepared and ready-to-drink items. 

So while an anticipated COVID recovery has been tamped down in many respects by continued labor issues, rising food costs and supply chain issues, it’s clear that operators are adapting to whatever the longer-term “new normal” turns out to be and are looking for new resources and alternatives from their food and beverage supplier partners.  

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