The Trials and Tribulations of the Foodservice Industry in 2021
Nearly every single person in the world agrees that the year 2020 was one of the worst on record. It was certainly the worst year most of us on this planet have ever experienced. Yet, as bad as it was for everyone individually, I cannot recall a year that was as devastating to any one business segment as it was to the Foodservice & Hospitality industry.
“But Wait!”, you say…”What about 2008-09 and what that did to the economy?” Fair point. But let’s think about that for a moment. The last half of 2008 and all of 2009 were indeed devastating to a lot of people and professions. Architecture firms folded, construction slowed to a trickle, financial institutions laid off thousands of staff, and real estate took a nosedive.
And while all of those were bad…everyone in the U.S., and the world, still had the opportunity to go to their favorite restaurant, bar, pub, sporting event, convention, wedding, funeral, birthday, anniversary, graduation anytime they wanted. In one word…we could all “congregate” whenever, and with whoever, we wanted.
All of that went away through 9 and a half months of 2020.
Suddenly, no one could get together with…anyone! …outside of your own home. And because no one could congregate, that also meant that the venues that host get-togethers could no longer stay open. That meant that every office building, every hotel, every restaurant and bar, every classroom, every church, every country club, every stadium had to close for an undetermined amount of time.
So, in April 2020, hundreds of thousands of hospitality and foodservice workers across every state in the country were either furloughed or completely laid off. Retail restaurants struggled to stay open offering only take-out food or delivery. But the contract food segment…meaning foodservice operations within a completely different type of business or facility…had to shut down completely since there were no employees at work and no students at college. Fast forward to one year later in late March 2021 with vaccines approved and being distributed in a constantly increasing pace, and offices, universities, and retail restaurants and bars making concrete plans to reopen…finally.
The Catch? No one seems to want to apply to return to their old restaurant or contract foodservice job. Last week, Cini-Little moderated a panel of contract foodservice industry professionals to discuss the unprecedented challenge of hiring back hundreds of thousands of employees amidst a reducing timeline before businesses and universities reopen, as well as trying to ensure worker safety and addressing other challenges that have been part of the industry for many years.
A number of potential variables have been cited by industry professionals as to why former workers are not lining up to return to work in droves. These include, but are not limited to, reasons such as:
- Concern for worker safety as customers may, or may not, be vaccinated when they dine out again
- The level of hourly wages and employee benefits traditionally offered by the industry
- The current unemployment benefits that most states offer their citizens during the pandemic, along with periodic lump-sum federal stimulus payments
- Former foodservice workers taking this opportunity of “unemployment” to learn a new skill or trade or further their education, which then leads them to obtain a new job in a different industry altogether
- The demands on family and personal life that a “hospitality” career and weekly schedule requires
- And a few others
It is likely that each former foodservice worker has a slightly different reason for not wanting their old job back right now…or ever. Regardless of the reason though, the deadline for office buildings and university campuses reopening is getting closer and closer…and quickly. Already, both retail restaurants and contract foodservice operations are openly complaining that they cannot get anyone to even submit an application for employment…let alone actually show up for an interview.
Meanwhile, national labor statistics continue to report that the unemployment rate remains at, or above, the 6% mark. Clearly, there is a big disconnect between the two that has to be bridged in order to get the overall industry staffed to a healthy level again. It may not be as simple as vaccinating every living person. And it also may not be as simple as increasing hourly wages by 50%. But an answer (or, several answers) must be found to help the industry rebound to its former self.
From a human resources perspective, the contract foodservice industry has put in place various employee search and recruitment tactics to attract former and new staff. They have considered the concerns mentioned earlier and worked to assuage them through hiring incentives, flexibility in schedules, ongoing training, and continuing education and benefits incentives. But the contract foodservice segment, and the overall industry, may need to consider a larger reorganization as well from an operational standpoint. For example, can new technology help reduce the need for specific staff positions while simultaneously addressing social distancing protocols for some operations? Can production efficiencies in the kitchen — and the front of house –reduce the number of staff required? Is it time to re-visit business models to identify the caliber and number of staff required before charging headfirst into re-hiring the workforce to pre-pandemic levels?
But the point we are trying to convey is…there is no one definitive answer to the question of how this industry re-staffs itself. No one has a “silver bullet” answer. The foodservice industry has been notorious for having a much higher employee turnover rate than almost any other type of business. But they’ve never had any trouble in attracting employees to work…. until now. The goal moving forward must be to create a valued partnership between contract foodservice companies and their newly acquired staff to ensure high retention rates with a balanced life-work environment, appropriate wage structures and benefits, and mutual understanding so that people want to stay in, and return to, the industry even if another major interruption in service occurs (hopefully) many years down the road.
By: Barry Skown, Director of Management Advisory Services