COEUR D’ALENE IDAHO —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Restaurateurs attending the 17th annual Distinguished Restaurants of North America Educational Conference and Gala at the Coeur d’Alene Resort here said the days of simply offering competitive wages are long gone. Today’s workers are looking for quality-of-living enticements like health care benefits, flexible scheduling, a 40-hour work week and even housing. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“Kitchen guys used to expect to work six days a week,” said Bert Cutino, co-owner of The Sardine Factory in Monterey, Calif. “But things have changed over the past five years. Today it’s not just about the money. People want quality time in their lives. Now it’s 40 hours—maximum—and with two consecutive days off.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
But while operators observe that many employees are holding out for compensation packages, they also acknowledge that the labor pool itself is progressively growing shallower and more problematic. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Teresa Siriani, president of People Report, a Dallas-based research firm that tracks human resources practices in the restaurant industry, told the conference’s 150 attendees that the current labor shortage differs from the one faced by the industry in the 1990s. Not only is the unemployment rate stationary around 4.6 percent—the federal government regards 3.6 percent as full employment—but the situation is complicated by generational shifts and the fact that the country is experiencing a wartime economy. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
At the same time, other industries, notably health care and education, now are competing for many of the restaurant business’ traditional pool of workers, particularly managerial candidates with two years of college education. While the foodservice industry is expected to grow by 16.4 percent through 2014, health care and education will expand by 30.3 percent and 32.5 percent, respectively, during that same period. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“Foodservice was the choice for individuals not wanting to pursue four years of education,” Siriani said. “But now they have more choice.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
In addition, experts indicate that the industry’s core labor force, individuals between the ages of 16 and 24 years old, is not expected to grow between 2006 and 2016. By comparison, the foodservice industry is expected to add 1.9 million jobs during that period. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
And while hiring presents a new set of difficulties to fine-dining operators, retention also remains a problem. A new study of fine-dining restaurants in New York, conducted by People Report in partnership with American Express, reflects the monetary cost of losing good employees. The year-long study found that the turnover rate for hourly workers in fine-dining restaurants in New York City was 82 percent, while the turnover for managers was 38 percent. On average, Siriani told DiRoNA members, it costs $2,336 to replace an hourly worker and $19,661 to replace a manager. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Using those figures, she demonstrated that it could cost one high-volume New York restaurant with 123 hourly employees and 13 managers an approximately $335,760 a year to replace those individuals who leave to take other jobs. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“Finding and retaining good people is one of the hardest things that most of us have to deal with,” said Rod Jessick, executive chef at the Coeur d’Alene. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Some DiRoNA members even traveled to the three-day conference with the intention of discussing solutions with their peers. Jack Czarnecki, chef and owner of the 42-seat Joel Palmer House in Dayton, Ore., said he was preparing to offer his 11 full-time employees a benefits package, but was interested in what other restaurateurs had to say. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Czarnecki said he is looking to offer a high-deductible—$2,000—health care and dental plan for which the restaurant would pay 90 percent and the employee 10 percent. However, he also wants to arrange another smaller plan that would be paid for by employees that would help to cover the deductible payments. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
He said he also is considering offering life insurance and a 401(k) plan. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“It’s a tough market, and we have to find ways to compete with the chains that want to put us out of business,” he said. “One way to do that is to take care of our workers. Besides, it’s just the right thing to do.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Not all restaurateurs are rushing to add benefits packages, however, citing the potentially high price tag and complicated paperwork. Given the current labor trends, though, experts say those restaurants eventually may have to change their policies or risk extinction. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“We say we’re the industry of choice, but when you say that, you also have to be consistent in how you provide for people and offer them benefits,” said Ferdinand Metz, former president of The Culinary Institute of America and a keynote speaker at the event. “The industry provides a great sense of opportunity, perhaps more than other industries. But when it comes to benefits, we have yet to step up to the plate. We may not offer the same benefits that other industries have.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
In addition to traditional benefits packages, many employees are not willing to work the long 50-to-60-hour workweeks historically associated with the restaurant business. Yono Purnomo, owner and chef of Yono’s Restaurant in Albany, N.Y., said no one in his fine-dining restaurants in the Hampton Suites Hotel works more than 40 hours a week. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“A generation ago, people wanted the money,” Purnomo said. “Now it’s quality of life.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Flexible scheduling is another incentive many employees are looking for. Hans Schuler, owner of the 98-year-old Schuler’s Restaurant & Pub in Marshall, Mich., said in addition to making sure that workers have two consecutive days off every week, the restaurant is very flexible when it comes to scheduling. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“You have to be flexible and work like a team,” Schuler said. “For example, married couples often have two careers these days, so you want to be able to allow them to spend time together.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Schuler’s, which seats about 400 and employs about 125, offers salaried workers health care and dental benefits, life insurance and up to four weeks vacation each year. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
In the case of some restaurants, benefits can extend as far as providing housing for some employees. Kurt Knowles, whose family owns The Manor and the Highlawn Pavilion in West Orange, N.J., said the restaurants must provide housing for some employees brought over from Europe on visas. To help staff the kitchen, The Manor has been bringing over for a number of years foodservice professionals on limited visas who then are housed in apartments nearby. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“It’s been a great program,” Knowles said. “But we may have to revise it. It’s become a homeland security issue.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
Ted Balestreri, who co-owns The Sardine Factory and several hotels with Cutino and who also co-owns several real estate companies in California, said hiring is now being complicated by the high price of gas—particularly when a restaurant is located in an upscale area where housing costs are prohibitive. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“Nobody can qualify for a housing loan, rents are high, it’s a perfect storm for a labor shortage here,” he said. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
However, Balestreri admitted to being fortunate in the fact that he also is in the real estate business. —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.
“We build some affordable housing and offer them first to some of our employees who need housing,” he said. “But, really, that’s just a drop in the bucket. If we built 100 units, it wouldn’t be enough.” —As the foodservice industry continues to wrestle with a steadily tightening labor market, leading fine-dining operators are taking unprecedented measures to ensure that they attract and retain the type of skilled employees necessary to run their businesses.