Crain's New York Business
November 1, 2004, Monday

Employers in the soup; Restaurant jobs jump; good staff hard to find, keep

BYLINE: Lisa Fickenscher

As a recent grad of the Institute of Culinary Education with little formal experience, Andrew Shepherd worried that he would have to pay his dues at some struggling restaurant in the city. Instead, it took the 22-year-old North Carolina transplant only three days to land a plum job as an entry-level cook at Tom Colicchio's three-star restaurant Craft.

''It was a shock that I didn't have to prove myself more,'' concludes the newly minted garde manger.

Mr. Shepherd's good fortune is welcome news for job seekers in the restaurant business, but cause for concern among employers. With the city's economy improving and an uptick in the number of large, upscale restaurants opening this year, competition for top-notch cooks, servers, managers and kitchen staff is sizzling hot.

''The number of restaurants has grown, but the number of qualified people has not,'' says Joan Steinberg, vice president of executive recruiting firm Marshall-Alan Associates Inc.

According to the latest Zagat Survey, 226 restaurants have opened this year in New York City-the largest number since 2000. Moreover, job growth at restaurants in the city appears to be outpacing the increases in other industries, says Jim Buckmaster, chief executive of Craigslist, an online job Web site.

The number of positions at full-service restaurants climbed by 1,500 in September, a rise of nearly 2% versus the year-earlier period, according to the New York State Department of Labor.

As the power shifts toward job applicants, restaurateurs have been looking at ways to hold on to their best workers and attract qualified new hires. They are improving their benefits packages, with many now setting up retirement savings plans or offering health benefits to line workers. Others are reducing the hours for their beleaguered top managers, who have typically worked 70-hour weeks.

Some restaurateurs are relying more heavily on recruiters and have resigned themselves to paying higher salaries to get the talent they want.

''New restaurants have to offer more money to recruit people who are already employed,'' says Richard Sandoval, who owns seven restaurants and is scouting for real estate to open two more eateries in the city.

The job market began to percolate earlier this year. Craigslist, for example, posted 3,000 New York openings this past July in its retail/food/hospitality category, compared with only 500 in July 2003. StarChefs.com says its postings for cooks here have tripled this year to date compared with the same period last year. Demand is so great that StarChefs, a nine-year-old Manhattan-based company, will host its first job fair in April.

No match

Smaller operators are feeling the worker pinch the most. Jennifer Mandell-who just opened her second restaurant, Bistro Musee, on the Upper East Side-says she couldn't match the salaries of $85,000 to $100,000 that many restaurants pay for a top chef.

''That's high for a smaller restaurant,'' she says.

In the end, Ms. Mandell was able to hire someone within her budget, but it took far longer than she had planned.

Other employers feel that they have no option but to fork over top dollar to get their first choice. Rosa Mexicano is opening a third location in lower Manhattan next July; Howard Greenstone, chief operating officer, says he just made an offer for the general manager position that is 25% higher than his company has paid in the past.

''We are spending significantly more time on interviewing and more money on recruiters and online ads,'' says Mr. Greenstone. That's in addition to the 401(k) retirement plan that Rosa Mexicano set up for its top managers in September.

Beanstalk Restaurants established a similar program about a year ago, but it went a step further, including line workers in its pension plan.

''It's our way of saying, 'We want you to stick around,' '' says Danny Abrams, an owner of the four-restaurant group.

Union Square Hospitality Group-revered not only for its successful restaurants, which include Union Square Cafe, but also for the way it treats its employees-answered the competitive call a year ago. USHG instituted a company-wide 401(k) plan, improved its disability coverage and set up flexible spending accounts for its 900 employees.

Who's stalking whom

If Beanstalk's Mr. Abrams had any doubts about how sought-after restaurant pros are right now, he got the message a few weeks ago, when he was interviewing candidates for a server position. Employers typically ask new hires to work at their restaurant on a trial basis, a practice called trailing. One experienced server, however, asked to trail at Mr. Abrams' restaurant to help him decide whether to take the position, since he had another offer.

Despite the applicant's strong qualifications, Mr. Abrams denied the request. ''Who is hiring whom?'' he asks.

Restaurants that have generated loads of buzz and boast a celebrity chef are especially vulnerable to poaching. One-year-old Davidburke & Donatella almost lost a key manager recently when he was offered a job in Las Vegas.

''They offered him more money, flew him out to Vegas and had a limo waiting for him,'' says Donatella Arpaia, a co-owner of the restaurant.

In the end, the manager decided not to jump ship.

''We were lucky,'' concludes Ms. Arpaia.