2023: Restaurants and the Current State of Labor

Apr 13, 2023

Long lines, cut hours, overworked staff, some frustrated customers, and the sense that things can’t run as smoothly as pre-pandemic times are what the restaurant industry has been facing for the past few years. Since the lockdown, restaurants and hospitality services have been scrambling (and getting quite creative) to develop solutions for staff shortages. It may take some work; however, after years of disappearing staff, restaurants may find a little relief this year and in the future.


February Jobs Report

According to the Bureau of Labor Statistics, the restaurant industry gained 70,000 employees in February alone, and the predictions are looking sunny, says Restaurant Dive. The employment rate for the food and drink industry is 2.4% below pre-pandemic times, which is even lower than the month before, at 3%, says Nation’s Restaurant News. Although food and drink service employment remains slow-moving, it’s “moving in the right direction,” says the article.

Restaurant Staffing: Still a Challenge

Staffing is still a challenge, reports Nation’s Restaurant News, with 89% of owners saying recruitment and retention is a significant issue, with 62% saying they can’t meet demands with their current number of staff members. Since 2020, an estimated 2.5 million people have died or retired, says the Washington Post, setting off a domino effect for the food industry. Low-wage workers had the opportunity to move into higher-paying and more “professional” positions. The jobs that remained empty, and still are, are the less desirable, low-paying ones. According to the Post, many previous restaurant employees have not returned or have found “better” jobs. They may pay less initially, but the benefits, flexibility, and stability may be better than currently booming jobs like finance, construction, transportation, and warehousing. Labor economists say that the downshift in employment in the service industry has altered the US work market so much, it may shape the industry long term, reported the Post.

In addition to finding good employees this year and moving forward, is the cost of labor. Although nearly all restaurant operators plan on hiring more employees, many think it will be a challenging to balance their expenses. With each year surpassing the last in terms of costs, restaurants’ annual sales have been and will be affected. A specific concern is a weakness in inflation-adjusted sales, says Restaurant Dive. The cost of food and increased menu prices are predicted to drive sales growth in 2023, with food and drink sales minimally surpassing pre-pandemic levels because of inflation. With food and labor costs, restaurants’ bottom lines are continuously evaluated.

In the world of new norms, our restaurant experience has changed quite a bit for owners, operators, staff, and customers alike. After the reflective time during lockdown, the values, pay, flexibility, and work quality demanded by employees have taken shape. They are now beginning to shift the way our job market functions. Although predictions look optimistic, albeit slow-moving, the restaurant industry is still playing catch-up or changing the game to move along with the trends.

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