Eating places see company returning, however really feel in a labor disaster

Daniel Halpern is looking for 800 employees, and that wasn’t easy.

Halpern is CEO of Jackmont Hospitality, an Atlanta-based food service company that sells approximately 45 restaurants nationwide, including TGI Fridays.

Diners are returning. However, Halpern hopes that its locations will be properly staffed in the coming weeks to ensure that the customers he has been waiting for have the experience they expected.

Jackmont currently employs around 1,200 people. Before the outbreak of the pandemic, the company employed 2,700 people, more than twice as many.

“For those of us in the service industry, human resources are of the utmost importance to success. When we come out of the crisis, we want to be able to provide our guests with a quality experience,” said Halpern. “We are constantly trying to keep people occupied – this is the main problem in our discussions with our directors.”

Two people drink outside of Baja Sharkeez in Huntington Beach, California on Tuesday, April 6, 2021.

Paul Bersebach | MediaNews Group | Orange County Register via Getty Images

The average wage in his restaurants is $ 13 an hour before tipping. He also offers perks, but wants to incentivize servers by paying them tips for cards on a daily basis and discussing additional perks like sign-up bonuses.

An added incentive for both direct payments to individuals and higher unemployment benefits is a potential double-edged sword for restaurants. Consumers have more cash to spend and are returning to eat out. However, some operators, such as Halpern, feel that this is an incentive for workers to stay at home. Additionally, large retailers like Amazon have hired hundreds of thousands of workers over the course of the pandemic, which is likely to impact the service sector workforce.

In the Tropical Smoothie Cafe, the labor crisis is taking place at its almost 1,000 company-owned and franchise locations, which usually employ 16 to 22-year-olds. CEO Charles Watson said the hiring was the company’s biggest headwind right now.

“There is a shortage of workers in the restaurant business and in the service business like we have never seen before. … In many of the markets where we have coffee shops, there are simply no workers – simply put, people would prefer to be home stay and get paid than go to work, “he said. “This creates big problems for us in relation to our most important thing, which is customer service.”

A sign that reads “Hiring Now” is displayed outside a Taco Bell restaurant on February 5, 2021 in Novato, California.

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In March, the number of non-farm workers rose by 916,000 for the month, while the unemployment rate fell to 6%. This was the highest increase in total employment since August 2020, a sign that the economy is recovering.

The National Federation of Independent Business said the challenge of finding skilled workers weighs on small business owners. While overall sentiment rose in March, 51% of owners said they had few or no “qualified” applicants. In addition, 42% of all owners said they had vacancies they couldn’t fill – a record high and 20 points above the group’s historical average of 22% over the past 48 years.

“Main Street is doing better as state and local restrictions are relaxed. However, finding skilled workers is a critical issue for small businesses across the country,” NFIB chief economist Bill Dunkelberg said in a statement. “”Small business owners are competing with the pandemic and the increased unemployment benefits that are keeping some workers out of the workforce. However, the owners remain committed to recruiting and growing their business. “

Ritch Allison, CEO of Domino, also confirmed the tight labor market on CNBC’s “Power Lunch” Monday. The company hired tens of thousands of workers, including delivery workers, during the pandemic.

“It’s a very competitive market. So we see ourselves as competitors for customers and also as drivers for drivers and team members – we have to be great in both areas,” he said.

Large restaurant companies recently announced hiring events for tens of thousands of jobs. By Thursday, McDonald’s will host an event to fill 25,000 jobs in the state of Texas alone, Reuters reported. The fast food giant hired 260,000 people last year when the restaurants reopened to diners.

IHOP, owned by parent company Dine Brands, announced it will hire 10,000 people to fill part-time and full-time positions in 1,600 locations across the United States

And Yum Brands’ Taco Bell is renewing its hiring parties across the country in nearly 2,000 locations on April 21. The company plans to hire 5,000 people and convert parking spaces and patios into job fairs to protect applicants from the ongoing pandemic.

“It’s no secret that the job market is tight, which is why we’re excited to host our fourth round of hiring parties in partnership with our franchisees,” said Kelly McCulloch, Taco Bell’s chief people officer, in a statement.

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