How Restaurants Are Combatting the Labor Crisis

There are a lot of labor challenges facing operators right now. After a mass exodus from the industry in the wake of the pandemic, restaurants, bars, and hotels across the country have struggled to find skilled staff from a smaller pool of qualified applicants. To compete, many operators now offer higher wages, better benefits, and flexible hours to retain employees. Overall this is good for the industry, but these efforts have made it difficult to balance rising labor costs with profitability. 

So how are businesses coping with these challenges? Full Book spoke to some of the top operators across the country who have found success with approaching things in a different way. At Birdie’s in Austin, Texas, a counter service model keeps the team lean and the restaurant packed. For Crown Restaurant Group in Cincinnati, Ohio, hiring and training for higher touch hospitality keeps guests coming back again and again. And in California, Last Word Hospitality focuses on efficiency with cross-training where it makes sense.  

(As told to Joanna Sciarrino.)

Counter Service

Birdie’s is a hybrid model where guests order at a counter, but then we transition their experience to a full-service restaurant. Servers bring over food and drinks, and wine service still happens at the table. And while we ask that orders are placed at the counter, people can definitely order more, whether that's via QR code or by flagging down a server. We also course out meals in the same way as a traditional full-service restaurant, which helps define our approach to hospitality.

We signed our lease three weeks before the start of Covid-19, so we had a lot of time to think about places that we loved and knew we needed to do something unique and different for such a unique time. And we weren't sure how long the pandemic was going to last, so we needed to keep our model lean. We were inspired by some great lunch counter service models that felt more elevated, like Sqirl and Destroyer in Los Angeles. So we took that idea of elevated food, and layered on wine and then put it at dinner. It would be a normal restaurant experience but to keep everything tight and lean from a labor perspective, we would remove the reservationist, the host, the back waiters, and the front waiters. 

We knew going in that controlling our labor costs was going to be important. For anyone who's ever looked at a P&L, labor is just out of control. But if you can control your labor, you can really create the restaurant you want rather than the restaurant you feel like you have to have to keep the lights on. And that was very important to us. Birdie’s was an opportunity for us to reset the traditional restaurant model and make it better for everyone — to eliminate the burnout that’s so common in the industry, pay people fairly, and create a healthier place to work. Because we keep our labor costs lower with this model, we’re able to offer better benefits to our employees. We also add a 3.5% health and wellness fee to all of our checks to support the cost of health insurance, subsidize mental health care, and offer parental leave. We're also closed Sundays and Mondays and close for one month a year — two weeks between Christmas and New Year's and two weeks in August — but we still pay our team. It’s expensive to close our restaurant and pay everybody so we need to be crushing it when we are open. But when you offer better work-life balance for the entire team, employees can show up and work hard when they need to, and really enjoy their time away from work. 

From an accounting perspective, this model is cleaner, and it’s good for morale, too. We tip out everyone who's full-time at Birdie's evenly, so dishwashers, servers, and cooks all get tipped out flat. This avoids a complicated tip pool, where people have different rankings or point systems. In a more traditional fine-dining structure, there's a hierarchy that develops, but we wanted to make sure everyone's compensated fairly. Guests tip an average of 22% at Birdie’s, on everything from a $5 Miller High Life to a $2,000 bottle of old French wine, and with a counter service model, that ends up being fantastic for everybody. 

For any operator interested in trying out the counter service model, it’s important to connect the dots for guests and make it very clear why you’re operating the business this way. Most people don't know how much dishwashers or cooks make in a traditional restaurant model and that it's not really a fair cost of living. But if you explain that you’re a restaurant trying to take care of its people, I think most people can really support and get behind it. We try to be transparent with our guests about why we do what we do, and the more we do that, the more they open their minds to what a restaurant can be.

Cross-training Staff

I grew up in restaurants and there was always a really clear delineation between front of house and back of house that made me slightly uncomfortable, especially because I grew up in a tip exemption state (Massachusetts). So designing our restaurants in a different way came from an emotional desire to create something where there wasn't such a separation between the two sides, and to cultivate a sense of people working together toward the same goal.

To achieve this continuity between front and back, it became more than just cross training staff, but making as many singular positions as possible. What are things that a cook can do in terms of service and what are things that servers can do in terms of food preparation and how do you create this crossover? California doesn’t have a tip exemption so everyone essentially makes the same wage and tip pools that include the back of house here are much more common. This made it possible for us to really test this theory and see if we could create positions that really would do what is typically two different positions and two different sides of the restaurant. Found Oyster was our first shot at it, and it was crucial that we design the restaurant physically to accommodate this idea. 

Many restaurants are still built with kitchens in the back, so people are constantly shuttling fresh food and dirty plates from the kitchen to the dining room. But if you have the opportunity to design the kitchen and the dining room all together in a cohesive way, you can start to be  proactive and as efficient as possible from the design phase onward. Now if everybody's stuck in this one space, it forces people to figure out what these systems need to be, but there’s a built-in efficiency with the kitchen right there with the same people preparing and serving your food. Sushi restaurants are a great example of this. People love being served by a sushi chef in the same way that people love being served by a bartender. If that same person can also make your food, that becomes a really efficient force for labor.

At Found Oyster, it’s mostly in service that we’re able to shrink rolls. There's no way to take the station that's cooking the majority of the hot food and have them also shuck oysters or run food. But there are other dishes, like sandwiches, salads, cold appetizers, and crudos that most team members can prepare and serve.

As with anything else that breaks the mold a bit, this approach takes time. It was really challenging at first asking people who are traditionally cooks to learn about wine and asking servers to shuck oysters and use sharp tools all day. But eventually it attracts a certain type of staff who is interested in being able to do more. And because everyone's in there together and capable of helping each other out, service doesn’t really suffer because you've got more people around you who can jump in and help in any situation. It means when people are sick, other people can cover more easily. It just solves a lot of these really unique challenges of all the specific roles that restaurants typically have.

Unfortunately, most people don't know what the labor costs of a restaurant really are, so you have to find a way to be more efficient while still providing the same great level of service that guests are used to.

High-touch Hospitality

We opened Crown Public in 2018 with authenticity in mind. My husband [Anthony Sitek, chef/owner of Crown Restaurant Group] and I met in culinary school and have worked in restaurants across the country. When we decided to do our own thing, we worked with Dana Wronski on the principles and foundations of what that would be. Dana’s operated restaurants for decades and she showed me a totally different way of leading that focused on exceptional hospitality that I didn't even know existed in our industry. We’re about to open our next restaurant — our seventh concept in seven years — and it’s because we’ve created relationships with our guests that we’re able to do that. 

We do things a little differently with our staff, starting with the hiring process. When we interview people, specifically for front-of-house positions, we focus on personality. How do they carry on a conversation? How do they talk about their experience? Are they able to keep eye contact? Are they personable? Experience and resumes are important, but I can't train somebody how to have a personality. 

Because our restaurants make everything from scratch, I want to make sure that whoever is presenting that menu to the table can articulate it well and connect with the guests. At the end of the day, front-of-house people are salespeople and they have to sell the product that the team in the back has worked so hard to create. So if someone can make a connection with you when you're hiring them, they can usually create that warm inviting experience with guests. 

From there, team members are trained (and tested!) on the nuts and bolts of what we do. A big part of that is the 2-2-2-2 rule: no longer than two minutes before someone is greeting a table after being seated; if anyone comes within two feet of a table or guest, they’re checking in; after two bites of food, someone approaches to make sure everything's to a guest’s liking; when there’s two inches left in a drink, someone is checking in for a refill. It seems so simple and generally leads to happier guests (and bigger checks), but a lot of businesses don't operate like that.

Another important part of our model is physical support from leaders. Leads are very involved in service. At all of our restaurants, when service happens, managers or GMs have to be on the floor at all times, and they have to touch every single table. This lets guests know that they're there and they care about their dining experience just as much as the server. And it reinforces to the server that if anything happens, their manager's got their back. We’ve gotten lots of feedback from employees that they’ve never worked at a place that cares this much, where the leaders are so involved. But it helps to set a higher standard for our team. If the owner or the director of operations is bussing tables, it inspires people to do more. We're never going to ask someone to do something we wouldn't do ourselves, and that ethos has really helped us find people who want to grow with the company. 

Most of our staff work at multiple locations because they can find shifts that work for them and they're already trained in the company culture. Menus might be different from our steakhouse to our gastropub, but it's still the same hospitality that you're receiving, tailored to each guest. And new restaurants are a great opportunity for employee growth, too. A lot of our staff are eager to take shifts at new spaces, to gain experience at a different concept; they’re able to do that with us. We reward people for hard work and we work together with the people who want to advance to leadership positions. 

It’s not always easy finding the right people who get what we’re trying to do and who want to do the work. But people like the way we approach things and it’s worked for us so far, and that comes from how we invest in our team and the relationships we cultivate with our guests. We’re fortunate to have regulars who want to see us succeed and they’ve supported us along the way. We are very well aware that it's a competitive market and guests choose to dine with us and we don't take that lightly. We want to make sure that when they're with us, they don't have to worry about anything and we’re making sure everything's taken care of.