Guest Blog | BYOD, Inc.
Most of the conversations I am having with restaurant colleagues these days involve any number of terms: RRF, PPP, Covid-19, recovery, consumer confidence, and many more. However, at my own restaurants the conversations center around one thing: staffing. In 25 years, I’ve never seen an employment pool as shallow as it is right now. While the economy is seeing wonderful recovery (the unemployment rate fell by another .3% last month adding almost 550K jobs, and the economy grew by 6.4% in Q1 and continues to skyrocket), we in the hospitality industry are not experiencing the same boom. Reuters reports that 5.6% of restaurant workers quit their jobs in April (an all-time high according to Gordon Haskett Research Advisors) and the bureau of labor statistics shows the hospitality industry came out of April still down more than 2.8 million workers from where it was pre-pandemic, with an unemployment rate of 10.8% compared to the national level of 5.5%. On top of that, I haven’t spoken to an operator in months where the phrase “severely understaffed” doesn’t come up.
Though there are multiple drivers (unemployment benefits, governmental pandemic regulations, large wage increases in industries that weren’t shutdown, etc.) behind this situation, and we can all debate them until we are blue in the face. The reality of the situation is that a smaller and shallower hospitality employment pool is here to stay. With that sobering fact readily apparent after the last several months, we also are hearing a lot from “experts” stating the only way to attract workers back is to raise wages. With efforts from groups like the IRC as well as state and national government to push a $15/hour minimum wage it seems a bit like the industry is being pushed into accepting this new reality by bully pulpit and the peanut gallery. The problem seems insurmountable, especially considering the fact that industry wide we lost 110,000 restaurants permanently last year and almost $240 billion. However, the building blocks of an alternative solution to “raising wages and just keep raising them” are already in many other industries.
In the 1950’s the manufacturing and agricultural industries employed 1 in 3 Americans workers, but in 2009, it was closer to 1 in 8. What happened, you ask? Automation. We began to use machines, computers, and finally data to evolve how those industries work. Now I know I just lost some of you. For years people have told me how backward the restaurant industry is, and how technological behind we are. We’ve been slow to adopt new technologies and sometimes burned by the ones that we have. I hear the argument that while spending millions of dollars on technology might work for a big factory doing $1 million dollars a day in revenue, it can’t work for a restaurant doing $1 million in revenue annually. But that supposes that automation requires large physical infrastructure, expensive software programs, large implementation teams, and a number of other hurdles that make it very difficult for an industry that is made up of more than 60% independent operators to consider implementation.
Automation is something that the restaurant industry has championed for years (just ask McDonald’s), but it has approached it from the standpoint of unit replicability, when what we need to focus on as an industry is how automation applies to a single unit. Simply put, are there tasks that technology can do (perhaps better than humans) that can be easily and inexpensively implemented? The answer is a resounding yes – with machine learning and artificial intelligence. Why couldn’t an AI build a schedule better than an assistant manager? Crunch data and predict sales and staffing at better rate? Coordinate your ordering for you? Essentially remove all of the mundane “office” jobs that an operator deals with on a daily basis so that they can focus on more important tasks? If a manager could skip 50% of their paperwork to spend more time training the limited staff that they already have (because an AI did it for them), could that staff begin to handle a higher workload? If consumer interfaces could start with technology as a welcome funnel (QR codes, AI engaged CRM’s that auto-seat customers) could that allow restaurant to do more with less staff?
In the end, what I believe will come out of the pandemic is not necessarily higher wages, but a greater reliance on technology as an interface between management and staff as well as restaurants and their customers. Technology isn’t the only solution to the current job market, but it certainly seems like a more palatable one. | Samuel Short
Sam is the Chief Strategy Officer for BYOD, Inc., a Restaurant-focused Artificial Intelligence company. Sam also owns a restaurant group in Michigan and has spent the last 25 years in the restaurant industry. He served on the board of the Michigan Restaurant and Lodging Association for many years.
This guest blog was submitted by BYOD, Inc. For more information on guest blog opportunities, contact Marla McColly, Business Development Director, Oregon Restaurant & Lodging Association.