Worker Shortage Has Restaurants on the Ropes Again

With many would-be employees leaving for other sectors during the pandemic, recovery from COVID losses could be years off.

Milwaukee restaurants that survived the deepest throes of the coronavirus pandemic are now faced with another challenge that again threatens their very existence – finding employees.

And there appears to be no simple solution for what is shaping up as a potentially devastating long-term trend.

“It’s more complicated than you would think,” said Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association.

Many factors are driving the critical labor shortage, she said, noting that the hospitality industry’s workforce shrunk by about 22% during the pandemic.

“Even when restaurants were shut down, there were industries that were still hiring, like health care, manufacturing and retail,” Hillmer said. “So, some of those workers are permanent losses for our industry.”

The employment crisis has led to operational changes at many restaurants while others fight for survival, according to Hillmer.

“I know a number of restaurants that normally would be open seven days a week for lunch and dinner, but they can’t find workers, so they are open five days a week just for dinner only,” she said. “Other restaurants are now closed Sunday and Monday or Monday and Tuesday. It’s becoming harder to find restaurants that are open.”

An array of other factors is also making it difficult, if not impossible, the find coveted workers.

 

 

Teenagers, who traditionally have been key cogs in the restaurant business, aren’t as willing to join the workforce, Hillmer said.

“Not as many teens are working, especially if you have families where both parents work. They want to have their weekends free for doing things as a family or their kids are in club sports and traveling,” she said. “The restaurant industry would typically be a first job for many of them. Without those teen workers, it adds to this global worker shortage.”

A shortage of day care options has also become an issue for parents who otherwise might be in the workforce, she added.

Some of the troubling trends pre-dated the COVID-19 crisis, Hillmer added.

She noted that economists have predicted for years a flat population growth for the state. Census figures that came out last month show Wisconsin’s population grew a modest 3.6% since 2010, while Milwaukee and Milwaukee County dipped slightly.

“The number of able-bodied, working adults is less than the number of jobs,” she said. “That’s not going to change anytime soon. In Wisconsin, we don’t have the population growth for the growth in jobs, and that’s across the board, not just hospitality. It’s manufacturing and health care and so on.”

But the combination of factors has created an especially troubling outlook for the restaurant industry.

“The competition for workers is fierce,” Hillmer said. “Then when you look at our industry and see that we lost so many workers because of the pandemic and who went to other industries, it’s really at the critical stage for our industry.”

Adding to the struggles of Milwaukee’s restaurants is that the fact that many Downtown office buildings remain vacant or only partially occupied as businesses shifted to a virtual work environment due to the pandemic.

“A lot of Downtown restaurants are closed for lunch now because offices are still closed,” Hillmer said. “Operators are having to make some really tough decisions on what days and hours they are open because the other risk they run is to open fully but not be fully staffed. Then you’re going to completely burn out the staff that you do have, and to try to replace them would be really difficult.”

Hillmer urged patrons to alter their expectations when visiting local restaurants.

“If you go to a restaurant, you are going to have to bring your patience,” she said. “Operators and their employees are doing everything they can to give you a great experience, but they may be short-staffed. A kitchen that usually has seven people in it may now have only three or four. You might have a server who usually has five tables that now has 10. With that patience, please show kindness, too. Think of the toll that this pandemic has taken on the operators and their staff.”

The industry is holding out hope that the some of those who have turned away from the restaurant industry will come back.

“Hospitality isn’t your typical 9-to-5 job,” Hillmer said. “It’s not sitting behind a desk. Hospitality is a great industry because there is a lot of flexibility in when you work. You can work around personal schedules much easier in hospitality than you can in other industries.”

The worker shortage has forced Saz’s Hospitality Group in Milwaukee to scramble for workers during the busy summer season.

“It’s been tough for us, for the catering division and the restaurant,” said Saz’s “chief progress officer,” Kellie Commons. “We are short people. Summer is always a build-up time for us. This summer even more so than most since we’ve had events that had been canceled because of the pandemic rescheduled and back on our calendar.”

Changes in the marketplace have added to the challenge, Commons said. She cited the shifting of Summerfest to September from its traditional early summer run.

“That means we’re still heavily recruiting, especially for our catering division,” Commons said. “We are working hard to put the positions that we have available in front of interested candidates, which are in different places than maybe they have been historically. We are having to recruit in different ways and partner with different organizations to try to find folks who are interested in filling roles.”

Saz’s employee recruitment efforts are multi-pronged.

“We’re reaching out to some organizations that may have volunteered with us in the past and we are partnering more with organizations like Goodwill Industries or JobsWork,” Commons said. “Our social media presence has really been taken over by our recruiting effort. That’s where we are seeing some good traction. Just using our existing follower base and our social media presence to draw those people in and remind people that hospitality, while it is hard work, is a fun place.”

Saz’s continues to have success recruiting through what Commons described as its best resource – those already on the company’s payroll. “Historically, we put additional referral and retention bonuses in place to try to help bring people in,” she said.

Commons said she has seen restaurant employees leave the industry for jobs at places like UPS or a warehouse environment. “It seems more stable after last year, but as the hospitality business recovers, I think we are going to see the same stability that we have had historically. Wooing folks back to the hospitality life is a huge focus for us right now.”

Commons touted the benefits of working in the restaurant and hospitality world.

“Most of the roles that we tend to hire for are entry-level positions, which kind of cracks open the world to anybody from high school students to retirees,” she said. “The scheduling is extremely flexible. We have roles available that can have shifts as low as four hours and then we have other positions that have traditional length workdays of eight to 10 hours.”

Saz’s has an active roster of about 500 employees for its restaurant and catering operations, including the festivals division, which has been ramping up throughout the season.

“As part of the recruitment process, it’s certainly given us and the industry in general an opportunity to focus on different ways to engage and retain folks,” Commons said. “I know a lot of the difficulties we are having is that a lot of hospitality jobs are entry-level. They tend to be lower wage and not benefits-eligible. So, it’s been a great opportunity for us to take a look at additional benefits that we can try to offer employees who may not be full-time.”

Among the options is offering some level of medical coverage, as well as non-traditional benefits options. Commons mentioned a Milwaukee restaurant that offers free yoga classes for employees.

“We’re also looking at adding English as a second language option for Spanish-speaking employees,” Commons said. “We are just trying to drill down into those benefits we can offer that really serve our employees’ interest so that they can continue to grow and engage.”

Saz’s employs about 60 full-time employees, most of whom were retained during the pandemic. “We had some brief furloughs, but we brought folks back as quickly as we could,” Commons said.

The roster of full- and part-time employees can grow to as many as 1,000 during peak times in past years with a full slate of festivals on the calendar.

Suzzette Metcalfe, owner and chef of the Pasta Tree restaurant and wine bar on Milwaukee’s Lower East Side, had been working to get the Italian restaurant back to pre-pandemic employment levels until she had to temporarily close the business after suffering a serious injury when her fingers became caught in a pasta-making machine.

Prior to her injury, which likely will keep the Pasta Tree closed until November, Metcalfe struggled to find employees to fill open jobs at the restaurant.

She placed ads on Indeed, Facebook and even Craigslist in her desperate search for employees. She also posted on LinkedIn and private social media groups comprised of Milwaukee-area restaurateurs.

“I have been trying to hire people,” Metcalfe said. “I have exchanged text messages with candidates and one day I had 11 interviews set up. It was on a Monday, a coveted day off for me. Not one single person showed up for their interview. That is the game people are playing.”

It left the restaurant short-handed. Before the pandemic, the Pasta Tree typically had a crew of 10 or 11 on hand during the week and 11 or 12 on weekends. “I had been running with seven for a while right before my injury,” Metcalfe said.

The dire situation has called for drastic measures.

“We are asking for favors from other restaurant owners,” Metcalfe said. “I’ve had people contact me and say, ‘Suzzette, I know you’re closed right now and I don’t want to steal your staff, but can I borrow your employees until you open up again?’ The situation is terrible. I don’t know why people don’t want to work.”

The employment crisis has forced restaurants to come up with recruitment strategies, many short-term in nature, designed to attract workers, Wisconsin Restaurant Association’s Hillmer said.

“Some restaurants are offering signing bonuses or adding benefits, or compensation is going up,” she said. “I know in the Milwaukee area there are restaurants that are paying $17 an hour for dishwashers, and they still can’t find anyone.”

The Wisconsin Restaurant Association is working on programs that would identify certain members as preferred employers.

“If you’re a great place to work and you can make good money and be treated well and it’s fun, you are one of the places that isn’t going to struggle versus a place that is not doing some of those things,” Hillmer said. “If you don’t lose staff you don’t have to replace them. And if you have robust recruiting within your existing staff, that is one of the most successful ways to attract employees.”

Existing restaurant employees are being encouraged to recruit family and friends to fill open jobs.

“We are really trying to help those who need a job get connected with our members,” Hillmer said.

The recovery for the restaurant industry won’t happen overnight, with some economists projecting that the restaurant industry won’t experience a recovery until at least 2024, she added.

“It’s going to take years for restaurants to overcome their losses from the pandemic,” Hillmer said. “Even if you see a restaurant doing really well with a full dining room and they are really rocking it, you have to remember that during the pandemic there were months when they had to completely shut down inside dining or they have had capacity limits where they were not able to fully open.”

Many restaurants operate on paper-thin profit margins yet have had to invest in outside dining setups and safety protocols due to the pandemic while taking on added debt.

“It’s going to take a long time to recover,” Hillmer said.

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Rich Rovito is a freelance writer for Milwaukee Magazine.