When longtime server Lori Fox lost their job early in the pandemic, they assumed they were stepping away from the restaurant industry for a short time. Instead, they never went back, shifting to a career as a freelance writer, editor and journalist.
“I didn’t want to go back into it because…I think [working in restaurants] was holding me back a little bit,” they said. “I realized that I was just serving other people and not getting my own needs met.”
Fox is in good company. According to the National Restaurant Association’s 2023 State of the Industry report, the United States restaurant industry remains 400,000 jobs below pre-pandemic levels, in part because workers have fled to other profitable sectors.
With long hours and difficult working conditions, high turnover has always been the norm of the restaurant industry. But the problem has significantly worsened in the post-pandemic economy, even as customer demand for restaurants has bounced back. Employees, operating in a labor market that leaves them with multiple options, have in many cases chosen to leave the physical and mental grind of restaurant work behind, even as restaurant operators have attempted to lure them back with higher wages and cultural improvements.
The specific requirements of restaurant work have traditionally made it an industry that has a hard time holding onto workers.
“Restaurant work…is very demanding. The shifts are long, you’re on your feet all day, and you deal with lots and lots of uncertainty,” said Alex Susskind, director of the food and beverage institute at Cornell’s Nolan School of Hotel Administration. “If you have staff members that are not completely passionate about the work that they’re doing, then it’s difficult to keep them engaged.”
Often, restaurant employees leave the industry due to high physical and emotional expectations and low levels of protection against harassment and disrespect from customers, a problem that the pandemic exacerbated. According to a 2021 survey from Blackbox Intelligence, 62% of workers reported having experienced customer abuse.
Fox says the guest-facing nature of the industry—and the harassment and the imbalanced power dynamic that goes with it–was one of the significant issues they had with restaurant work.
“It’s an expectation and an unspoken agreement…between the restaurants and the customer because the customer expects to be able to come in and have you play nice with them, no matter how shitty they are,” they said. “If you say no…you’re actually violating, in the customer’s mind, this unspoken agreement to your body and your time and your attention.”
The disrespect also comes from inside the restaurant, at the management level.
Nihil Zaradartha, a New York server with over a decade of restaurant experience, was two days into training for a new job when they were told they required a medical procedure. Zaradartha provided documentation and informed management that they would need a few days off. After a full week of communication attempts were met with radio silence, Zaradartha moved on to another restaurant job.
“I didn’t have time to wait around,” they said. “I had bills to pay.”
Prior to Covid, the turnover rate for restaurants sat at approximately 75%. By 2022, it had nearly doubled. In a year-long study conducted in August 2021-August 2022 by 7Shifts, an employee software company geared toward the hospitality industry, the average tenure for restaurant workers was just over 3 months.
“If you look at consumer services industries, many of which require in-person work, quits are still substantially higher than they were before the pandemic,” said Julia Pollak, chief economist at ZipRecruiter.
Were restaurants able to simply make up for high turnover by replacing lost workers, as they have in the past, the industry would most likely be able to carry on without making substantive changes. But times have changed, with the balance of power shifting from employers to employees. While restaurant industries in parts of the United States such as Texas and Florida have recovered to pre-pandemic employment levels, most of the country’s restaurant industries are still making up lost ground.
“The pandemic itself, the health crisis, for the most part is over… I would say that the economy itself, especially when it comes to the restaurant industry, is still making its way out,” said Jessica Muradian, director of government affairs at the Massachusetts Restaurant Association. “People can’t find folks to work in the restaurant industry, in the hospitality industry, like they could before.”
Jesus Mendez, general manager at Taco Tote!, a Mexican restaurant in Albuquerque, NM., says the number of applications the restaurant received prior to the pandemic has noticeably dwindled in its aftermath.
“[Before the pandemic] we’d receive maybe one to two applications a week,” he said. “Now, we’re receiving about one application every three weeks.”
As restaurants contend with still inflated costs, the not-insignificant price of turnover has become impossible to ignore. Jim Taylor, founder, and CEO of Benchmark Sixty, a restaurant consulting firm, estimates that hiring new employees costs restaurants an average of $2,500 to $4,000.
“I know that a lot of our members…make sure they’re going out of their way to show value to their employees,” said Nate Cloutier, director of government affairs for HospitalityMaine. “[Because] getting that commitment, or retaining your employees, is so much easier, with labor costs and training and other things.”
Higher wages and bonuses are one tool operators have been using to draw back workers. According to the U.S Bureau of Labor Statistics, the average pay for restaurant workers in April reached a high of $21 an hour, up from $17 an hour in February 2020. But relying on increased wages alone is an essential misreading of what employees are looking for, and hasn’t resulted in the hiring increases restaurant operators are hoping for.
“If you work in an environment where you feel cared for…that matters more than anything,” Susskind said. “It matters more than work hours. It matters more than good health insurance, and good retirement savings. Those things matter, but without a good culture, none of it will be pervasive. It just won’t last.”
According to an annual analysis of Glassdoor restaurant employee satisfaction surveys by financial services firm William Blaire, restaurants that prioritized positive work culture with an emphasis on effective management, career advancement, and work/life balance correlated more strongly with employee satisfaction than increased wages and benefits alone.
Portillos, a fast-dining restaurant chain based in Chicago, is a positive case study in how prioritizing employee needs can lower turnover rates. As the country emerged from the pandemic, the restaurant group conducted a company wide survey, polling employees on what they wanted in terms of incentives. While financial improvements such as premium holiday pay were added, other perks, such as the “Franks A Lot Fund”, which provides each Portillo’s restaurant with a monthly stipend to celebrate local employees for a job well done, addressed the need for employee recognition and appreciation. The shifts were reflected in the staffing. By 2022, Portillo’s had returned to pre-pandemic hiring levels, and their hourly turnover rate is 20-30 percentage points below the industry average.
One of the most effective methods restaurant operators have to boost employee retention rates is to nurture employees’ career advancement goals and give them the tools and mentorship needed to turn restaurant jobs into substantive careers. According to Muradian, Massachusetts operators are responding to this need by offering apprenticeship programs, as well as other types of employee training, such as English as a Second Language classes.
The increased efforts to boost retention rates seem to be having some effect. According to the March Job Openings and Labor Turnover Survey, turnover for the accommodation and food services sector fell by over 100,000 from the previous month.
“The fact that [restaurants are] moving towards these improved conditions, kicking and screaming, is evidence of the fact that they require this working-class labor to function,” Fox said. “When we…say we’re not doing that anymore, we exercise power that the culture doesn’t realize that we have.”