Frankie Little sees recent hiring issues as a wake-up call for the service industry when it comes to pay and benefits. Of course, that means a higher price to pay for a night out.
As owner of Roosters Latin American Food in downtown Mobile, Little said he’s had his fair share of problems hiring and retaining help, but a couple of changes have helped.
Little said he has started paying for Indeed.com, an online platform that shares job openings. He has also increased pay across the board and beefed up the restaurant’s benefits package to help lure workers.
“Because of the combination of all three of those things, it has been better,” he said of staffing. “We’re seeing a little bit of higher quality candidates.”
The COVID-19 pandemic is forcing restaurant owners and the industry at large to look at changes, especially in the rates of pay for staffers. Little said the change has “been sorely needed” but it will force prices to increase and put owners in a tough spot.
“You’re going to have to start paying people more,” he said. “That’s going to lead to higher prices. That’s just the way it is.”
Higher prices for a night out could lead to negative impacts on some restaurants, Little said.
“Americans don’t want to pay more money when they go out to eat,” he said. “There has been a price war for years. If you get labeled too expensive, you’ll fail.”
Liz Freeman, president of Long’s Human Resource Services, said the hiring issues are a bigger problem for those hiring wage earners, as opposed to those hiring more professional positions. It’s hard to keep wage earners employed at one place when everyone is hiring because many will jump for higher wages somewhere else, Freeman said. Specifically, Freeman said, this is happening because candidates apply for multiple positions with multiple employers at once.
“Turnover is just massive,” she said. “You put someone on a job and three days later they won’t show up.”
This market is especially hard on restaurants, which survive on already tight margins, she said.
“They are squeezing those margins tighter,” she said. “I don’t know how long we can sustain this.”
Grant Salz, co-owner of Moe’s Original BBQ downtown, said he doesn’t know of a restaurant in the area that hasn’t raised prices. This is due not only to higher wages being paid out but also to inflation, which is impacting global and domestic markets.
“We’ve seen a 10 percent to 15 percent increase on all of our prices,” he said. “Commodities like chicken and chicken wings, pork has doubled, beef has doubled; I don’t think there’s a restaurant downtown that hasn’t changed its prices to adjust. I look at our menu prices now and I kind of cringe.”
Like Little, Salz said his restaurant is doing all it can to hire and retain staffers. Salz said Moe’s now offers a paid time off plan, a 401K and medical, dental and vision insurance plans. The restaurant also offers a retention bonus for new hires; they get $500 after being there for three months.
“For a little barbecue joint, that’s kind of a big deal,” he said.
David Rasp, owner of Heroes Sports Bar & Grille, said his restaurant has been able to avoid some of the issues that have plagued other eateries. For instance, he said Heroes has not had to close early, but the restaurant has begun to be “more efficient” with its hours of operation due to staffing challenges.
Like Little, Rasp believes some things in the industry needed to “evolve,” like employee pay.
“We’ve made a concerted effort to pay more,” he said. “We want to be an employer of choice and earnings are part of it.”
Heroes has offered some benefits for years, Rasp said, but has recently added an anniversary bonus program.
While a worker shortage persists, the state’s unemployment numbers would lead one to believe hiring is not an issue. The state’s unemployment rate is 3.1 percent for October.
“October’s unemployment rate held steady this month, despite ongoing pandemic-related hiring struggles, and we actually dropped to the lowest number of unemployed people so far this year,” Labor Secretary Fitzgerald Washington said in a statement. “The labor force showed some positive growth this month, which is definitely welcome news as we begin to shift into the holiday hiring season. For more than a year, Alabama has proven that we will return to our pre-pandemic economic successes.”
Mobile County’s rate was a bit higher than the state average at 3.8 percent, while Baldwin County’s rate was a bit lower at 2.2 percent.
The unemployment rate, however, is not the best indicator of what’s going on in the labor market, Freeman said, because it doesn’t account for those who have stopped looking for work.
As for when hiring struggles might end, Freeman said it could be an issue through 2022.
“This will take us through next year,” she said. “You can’t run a business this way. It’s not possible to sustain, but we all just need to hang on.”
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