Restaurant industry has nationwide labor shortage
Exemplified by local McDonald’s closing early, lacking staff

By Brandon Anderegg

Sept. 13, 2018

MUSKEGO — The lobby of a McDonald’s on Racine Avenue closed early on Monday night due to staffing shortages, a handwritten note read on the front door of the business.

Many restaurants both in the state and across the nation struggle to find enough staff to operate their businesses, which has led companies in the industry to reduce hours of operation or utilize technology in lieu of physical bodies, said Susan Qualm, Wisconsin Restaurant Association executive vice president.

Several factors have contributed to the shortage of workers in Wisconsin. With the economy on the upswing, more people are choosing to eat out or have food delivered instead of having home-cooked meals, Qualm said.

“Demand for dining out is steadily increasing,” Qualm said. “Today’s consuming public eats out more than it ever has.”

With higher demand, business owners feel more comfortable opening new restaurants, which means there are more restaurants overall and an even higher demand for workers, Qualm said. In fact, if this trend continues, the number of workers needed to accommodate new restaurants and the demand for dining out will increase by 10 percent over the course of a decade, she said.

Staffing shortages are also impacted by an overall decrease in the number of people looking for entry-level jobs. Fewer teens are joining the workforce, which Qualm thinks could be a product of extracurricular and after-school activities. A decline in immigration has also led to a shortage of workers to fill entry-level positions, Qualm said.

“Immigration has slowed dramatically in the United States in recent years so that has also been a factor on some of those entry-level positions,” Qualm said.

The restaurant industry is also troubled by widespread poaching, or restaurant owners offering higher pay to skilled workers such as managers and line cooks, Qualm added. In fact, skilled workers at a Madison restaurant that closed due to the recent floods found a job within 24 hours, Qualm said.

“We’re seeing a lot of poaching in between great workers within the industry,” Qualm said. “And manager positions are the same way.”

With Wisconsin’s unemployment at a record low, lack of workers in general is also a factor in restaurant staffing shortages, Qualm said. In fact, restaurant owners are offering much higher wages for bussers and other entry-level positions to attract workers, a tactic that has largely been unsuccessful.

“Restaurant owners are offering higher wages than they were five years ago,” Qualm said. “I’m seeing quick service operations offering wages of $13 to $14 where they’re hiring people who don’t have any experience in the work force.”

Automation in the form of food ordering kiosks and cellphone applications has also taken a toll on the restaurant industry workforce, but has also provided some relief. In the case of a restaurant short on staff, businesses are using tablets to give customers a chance to order food and drink.

“Giving customers the opportunity to have a great dining experience that doesn’t have a human being interacting with them at every single step,” Qualm said. “Most in the industry would prefer to have that human touch at all times, but in the cases where someone is just asking for a refill, this way the customer can get it in a timely manner.”
 

By the numbers nationwide

Seventy-five percent of restaurant operators reported that they made a capital expenditure (remodeling or purchasing equipment) over the past three months.

Fifty-three percent expect to make a capital expenditure over the next six months.

In June, the industry added 16,400 jobs.

Over the past year, the industry has added 221,000 jobs. On a net basis, that is 600 jobs per day.

The restaurant industry employment growth rate at 1.9 percent is above the overall national employment growth rate.

Commodity groups such as eggs, beef, citrus and potatoes have increased in price while fresh veggies, poultry, pork and cheese have decreased.

Menu prices increased in June by 2.6 percent while grocery store prices increased by .05 percent. Overall inflation is up 2.5 percent in June.

Source: National Restaurant Association July Industry update