A quick review of industry media coverage makes it clear: most foodservice operators are struggling to attract and retain high quality workers. In an industry that had notoriously high turnover prior to 2020, 75% of operators across foodservice sectors are currently reporting staffing gaps of more than 10%.


Between the pandemic, the Great Resignation, and inflation, the foodservice labor market has been completely upended in recent years. While some might advise operators to automate to address labor issues, that is not always feasible or optimal. Even when it is, it is a long-term solution, and the labor shortage is an immediate problem. Foodservice operators need solutions now. So, what changes can foodservice operators make quickly to deal with the labor shortage.


Rethink Compensation

To start, operators may want to rethink their compensation strategies. This includes wages, bonuses, hours, and benefits. Each operator is different, so each operator’s approach to compensation will need to be tailored to their specific business and labor pool. The James Beard Foundation has been leading recent restaurant industry conversations on more inclusive, equitable compensation, and has developed several resources for firms who want to revisit their strategies. While innovative compensation models are typically associated with haute cuisine, north-eastern fast casual café chain The Works documented how they were able to do the same for their staff. It is truly an exciting time to see food industry leaders rethinking how compensation could work to create more value for workers, managers, and investors alike. 


Leverage Frozen Foods

Food operators are increasingly using frozen products to cope with the tandem challenges of labor shortages and supply chain disruptions. A recent survey found that 90% of operators had incorporated frozen food into their menu. Since frozen foods (e.g., fruits and vegetables) are processed earlier in the cold chain, foodservice operators can save time and labor costs related to ingredient prep. Other pre- or parcooked products can also streamline kitchen operations and decrease the turnaround time on food preparation. This frees up existing staff to focus on more complex tasks and customer service.


Simplify Product Offerings

Other foodservice operators are simplifying their menus to cope with labor shortages. Applebee’s, for example, trimmed its menu from 160 items to 100. By focusing on their most popular and profitable products (and products that use the same ingredients as those offerings), operators are directing their available labor in the most profitable directions.


The Bottom Line

While automation can replicate many tasks, it can be capital intensive and takes a long time to implement effectively. In a time of inflation and unprecedented labor strains, foodservice operators need solutions they can implement quickly. By re-assessing their compensation strategies, incorporating frozen food into their workstream, and simplifying product offerings, operators can focus on building strong teams and directing their energy towards the most sustainable and profitable lines of effort.


Tim Powell is a Managing Principal of Foodservice IP. Tim serves as a trusted foodservice adviser to management at several food companies.

To learn more about FSIP’s Management Consulting Practice, click here.

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