Beyond the Minimum: Addressing Labor Shortages and Costs in the Kitchen

By Caroline Hatchett

By

Caroline Hatchett

The restaurant industry’s labor force is shifting in dramatic, potentially catastrophic ways. Instead of wringing your hands, you can make changes in your restaurant—today—to help your business survive and thrive through the transition. At the 10th Annual StarChefs International Chefs Congress, a panel of chefs, restaurant owners, and industry insiders gathered to discuss practical, ground-level solutions to address the national cook shortage and an impending minimum wage increase. Moderated by StarChefs Will Blunt, here are some of the insights from Christine Cikowski and Josh Kulp of Chicago’s Honey Butter Fried Chicken, Rachel Yang of Joule in Seattle, James Mallios of NYC’s Amali, and Gwyneth Borden of the Golden Gate Restaurant Association.

1. Invest in people first. “The first thing people have to adopt is a paradigm shift. Labor is the most important asset of your business,” says Mallios. “When we had the most difficult times at Amali, and when we were least profitable, is when people are leaving.” Mallios suggests running an analysis of all the time (training, interviews, onboarding) and hard costs (job postings, overtime for other employees, etc.) to understand the value of retaining staff—and giving them appropriate raises.

2. Share the numbers with the staff. Most of your servers know how much revenue you bring in each week, but no one on your staff understands how much money walks out the door—unless you tell them. Cikowski, Kulp, and Mallios share gross revenue and expenses at staff meetings that are open to everyone. A more open system helps staff understand real (slim) profits and work together to cut costs. “Dishwashers know how much soap costs so they use one less squirt,” says Kulp.

3. Tie wage increases to training and the health of the business. Working on the assumption that money is tight at your restaurant, and that you start to share your business realities with staff, you can compensate your team for helping to reduce costs. If a sous chef can cut food costs by 1 percent, then she can get a $5/hour pay bump. Work with a manager to figure out how he can train to benefit the business, become a more valuable employee, and get a raise.

4. Get creative with benefits. On top of paid vacation, maternity and paternity leave, and sick days, the most competitive restaurants use low-cost incentives and benefits to create a loyal workforce. In the hyper competitive Bay Area, restaurant owners are offering retirement options, yoga retreats, and professional development opportunities, according to Borden. Mallios suggests adding managers to a friends and family phone plan—it’s a small cost to the restaurant but can save employees over $1,000 per year. 

5. Train everyone on staff to be a chef-owner. Cooks are rarely business school grads, so Yang teaches her cooks how to run a business—so they can improve hers and move onto their next projects set up for success.

6. Distinguish your food, so you can charge higher prices. Everyone on the panel conceded that mom and pops as well as older, stale restaurants are more vulnerable to swings in labor. Borden is seeing them shutter in San Francisco (where they’re victims to higher rents, too). Yang said, in the end, customers are willing to spend more on inventive, consistent, delicious food. If your food stands out, people will support your restaurant, even if the prices are a little higher than your competitors.

7. Experiment with your business model. The traditional restaurant compensation model is under scrutiny, and industry-leading groups like Union Square Hospitality have eliminated tipping from their restaurants. But it’s not always easy to envision the future. In the Bay Area, restaurants are experimenting with profit sharing, replacing hourly workers with a full-time crew, implementing pre-fixe and ticketed dinners with service included, and also blurring the front- and back-of-house so cooks can have a stake in the tip pool. It’s not yet clear which, if any, of these new models will pan out, or if they’ll do enough to motivate your FOH staff, but it’s worth a look.

8. Read, study, take action. You don’t have the luxury of ignoring the labor shortage or mandates of the minimum wage. Charge yourself or someone on your team to get in front of the problem—even if that means making small gradual changes. Join RAISE (Restaurants Advancing Industry Standards in Employement) to network with like-minded business owners. Cikowski and Kulp recommend open book management training at Zingerman's in Ann Arbor, Michigan, along with The Great Game of Business by Jack Stack. Mallios suggests subscribing to newsletters from employment law firms so you know all your legal obligations.

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