It was on a trip to Hilton Head, South Carolina this August where one of our country’s biggest economic issues (I know there are quite a few) hit me.
We had decided to take the 12-hour drive to Hilton Head with our two young children (six and two), which was an adventure in and of itself (the trip took 15-hours). We arrived in Hilton Head early on a Friday morning and started looking for a place to eat. Something simple, like a bagel and some coffee. On a side note, the bagels were nothing close to what we have in New Jersey. What we found was that almost all the restaurants were closed until at least 9 a.m.! How is a weary traveler supposed to get an early morning bite to eat and cup o’ joe so he/she can get through the rest of the day (without any additional sleep) while entertaining two little children?
I came to find out, after some high-level detective work (there were signs posted on the shop windows), that many of the restaurants and stores in that area opened late and closed early because of a worker shortage. Keeping in mind that enhanced unemployment benefits were still in play and the pandemic was, and continues to be, in full swing, I still could not gather how these places could not find people to keep the doors open during “regular” business hours.
First let’s look at the numbers.
Based on data from the U.S. Bureau of Labor Statistics, employment in the country increased in August 2021 from the prior month by 235,000, bringing unemployment to 5.2%. However, when you break this down further, the leisure and hospitality industry did not grow at all in August. To be fair, in the prior three months, this sector had increased employment of 812,000.
Forbes pointed out that new jobless claims rose for the second week in a row in September 2021, bringing total continuing unemployment claims to about 2.8 million, which is 131,000 more than the previous week. This is troubling since those enhanced unemployment benefits have expired. In a press conference held in September by Federal Reserve Chair Jerome Powell, the slow economic recovery is being blamed, you guessed it, on the surge in COVID-19 cases, mostly related to the delta variant. Among the hardest hit industries….travel and leisure, which has a direct correlation with the food and beverage industry. The Fed also stated that they believe that unemployment could continue above pre-pandemic levels until 2023!
Pre-Covid, some industries were still struggling to keep their stores at optimal employment. Supermarkets, for example, really pushed to combat low employment by implementing new technologies, such as self-check out lanes. And in a time where rising costs, not just product costs but also labor costs because of minimum wage increases, how does a business owner afford to pay a job candidate more, even if they are underqualified, because that same person would be snatched up in a second by another other businesses having the same problems. And it is not just happening in lower wage industries. We are seeing the same thing in the accounting world – staff being offered more money and flexibility at similar sized and larger firms. And businesses in the food and beverage sector are not only competing against themselves, but they are also competing against industry giants like Amazon who are hiring at an enormous clip. According to CNBC, when this article was written, Amazon had hired 450,000 workers nationwide since the pandemic began and plans to hire another 125,000, paying them well above the federal minimum wage and at least $3 per hour more than every state in the country, at $18 per hour.
So, what can business owners do in the food and beverage sector to bring in and retain the talent they so desperately need, outside of just offering higher salaries and wages?
- Referral bonuses can be paid to staff for bringing in new employees. These can be tiered based on position and scaled based on retention as well.
- Retaining employees by showing “appreciation” is key. Whether it is an Employee Appreciation Day, gift cards, outings (of course complying with CDC guidelines), or sporting event tickets, showing that extra attention to those employees who have went above and beyond during this difficult time will build some loyalty.
- Building excitement within the business. You not only need to market your business to new prospective employees, but also your current team so that they want to continue to work for you.
- Continue to make sure that the culture that you have built the business upon remains the same. It is easy to stray from ideals that have made a business successful but sticking to them during difficult times where changes are coming from all directions is difficult.
- Think outside the box as far what a typical worker looks like. Recruit from outside the sector. Sometimes employees who are not traditionally from your industry can add a new perspective and contribute in a meaningful way.
- Promote from within. You don’t always have to seek out new talent to fill more advanced positions. Encourage your current workers to reach for more responsibility and reward them appropriately for their efforts. It is usually much more difficult (and more expensive) to find higher level talent than it is to find entry level employees.
- Offer flexibility and better benefits, where practical. Flexible scheduling, especially for parents of children who may not be able to afford day-care, for example, may entice those who were not in the workforce before to re-enter. Certain monetary incentives like bonuses, employee discounts, tuition reimbursement, and day-care programs can be implemented as well. Traditional benefits like medical and retirement plans are also important to many people. Having competitive plans in place can often be the deciding factor for a job candidate.
As winter is surely upon us in the northeast, it will undoubtedly become even more difficult to attain optimal employment levels, especially if further health and safety mandates are put in place (a topic for another day), so making sure that some of these ideas are implemented now are even more important to ensure the success of your business over the next several months.
