Independent restaurants are overwhelmed by the labor shortage. They are raising prices, reducing hours of operation and even closing for good.

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Staff left the industry in search of better wages, benefits and working conditions. Álex Cámara / NurPhoto via Getty Image

  • Independent restaurants struggle to function because they cannot find enough staff.

  • The owners are reducing hours of operation, raising prices and returning to the kitchens themselves.

  • One said he closed his restaurant after larger companies poached staff with higher salary offers.

Independent restaurants are overwhelmed by the labor shortage.

Their desperate owners go back to the kitchens themselves and say they are working more hours than ever.

They are raising menu prices, reducing opening hours, and offering higher wages and more benefits in an effort to stay open – but for some the labor shortage has grown too great and they have had to close.

Government data and surveys of business owners suggest that the restaurant industry is hit hardest by the labor shortage.

In a recent Alignable survey of small and medium business owners, 85% of restaurateurs said it was “very difficult” to find staff. Only 3% said they had no trouble hiring.

Staff left the industry in search of better wages, benefits and working conditions.

While restaurant chains like McDonald’s, Starbucks and Chipotle have been able to raise wages – in many cases to $ 15 an hour and more – and offer hiring bonuses and education benefits to attract more. of staff, independent restaurants say it’s much more difficult for them to afford.

Insider has spoken to numerous restaurants across the United States who have said they’ve increased wages, but staff are still making less than $ 15 an hour, minus tips.

In a survey conducted by Alignable between September and October, 61% of independent restaurateurs said they expected large companies to make their hiring process more difficult in the fourth quarter by offering higher salaries with which they could not compete.

Alignable CEO Eric Grove said only 15% of small restaurants told him they had been able to offer additional perks to their staff, such as hiring bonuses, reimbursement of tuition, health care, flexible working hours and paid time off.

“Most of the time, big restaurants (or businesses outside of the restaurant business) pull applicants out of smaller restaurants with higher salaries and more of those benefits,” Grove told Insider in an email.

Joseph Devor, owner of Joey’s Chicken Shack in Pennsylvania, told Insider he had increased wages from $ 9 to between $ 10 and $ 12 an hour.

“I think [staff] deserve more, “he said.” It’s just hard because we started with very little and we have our bills to pay. “

Joey’s Chicken Shack isn’t the only one. Restaurants are facing rising wages and ingredient costs, which are squeezing their profit margins. Half of small and medium-sized restaurant owners said in an Alignable poll that they couldn’t pay their rent in full and on time in September.

To avoid soaring costs, some restaurants are closing earlier or closing their dining rooms. Robin LaForge decided to close his restaurant, Cheniere Shack in West Monroe, Louisiana, two days a week and close it an hour earlier on opening days after staff shrank by about three-quarters. Mirna McCormack, owner of the Korner Cafe in Lewisville, Texas, closes it about six hours early most days.

Some restaurants also charge customers more. Devor, for example, has increased its prices every month since May due to rising costs for labor and ingredients.

He said he wanted to raise prices further, but was concerned that this would deter customers. McCormack also said she believes her cafe’s retired customers will be put off by the price hikes.

Due to the labor shortage, restaurateurs also spend more time cooking or serving customers themselves.

McCormack said she started working 12-hour shifts most days before eventually reducing the cafe’s hours of operation. LaForge, meanwhile, said he now spends more time preparing meals in the kitchen and had to restructure his menu because he didn’t have as much time to come up with specials. He added that his wife, who is undergoing cancer treatment, needed to help.

Some restaurants eventually collapsed under the pressures of the tight labor market.

Taco Crush in McKinney, Texas closed in September after being left with just three kitchen workers. The owner, Paul Horton, told Insider that large companies have poached some of its employees with offers of much higher wages or benefits.

“As a small independent business, I cannot compete with the salaries of large companies, let alone offer them any benefits,” he said.

Extended coverage module: what-is-the-manpower-shortage-and-how-long-it-will-last

Read the original article on Business Insider


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