3 Reasons Why QSRs Are Struggling To Hire (And The Solutions)

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Article written by Mike McMahan, Workstream • Republished with permission

Restaurants are starting to completely reopen and consumers are gaining confidence to eat out again, but are restaurant workers ready to come back to work?

A handful of economic factors point to the perfect storm of low supply and high demand in the hunt for hourly employees. QSR owner/operators and hiring managers should keep these in mind as they put time and money into recruiting talent.

Stimulus checks are frustrating the supply of job seekers

The IRS recently reported that Economic Impact Payments for 90 million qualifying Americans began dropping into personal checking accounts again on March 12th, 2021. Another 37 million payments were reported on March 24th, followed by several million more announced on April 1st. This makes a total of 130 million payments worth about $335 billion being distributed in the past 30 days.

Stimulus checks may be delaying employment seekers from taking job action. Over the past 2 months, QSR owners have reported seeing former employees come out to eat, but demonstrate little interest in jumping back into the workforce. Likewise, other QSR owners have reported a 66% decrease in front-of-house applicants and an 88% decrease in delivery driver applications over the same time period.

To put all of this in perspective, consider the following example. A married couple with two kids will receive $1,400 for each qualifying adult and for each qualifying tax dependent. So this family of four could receive $5,600 in a single stimulus check payment. Employment Services professionals estimate that potential workers will abstain from active job seeking until this stimulus money runs out. But this is not the only reason potential job seekers might stay home.

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  • Atosa USA
  • DAVO Sales Tax
  • Day & Nite
  • McKee Foodservice
  • T&S Brass Eversteel Pre-Rinse Units
  • Inline Plastics Safe-T-Chef
  • Texas Pete
  • BelGioioso Burrata
  • RATIONAL USA
  • RAK Porcelain
  • Simplot Frozen Avocado
  • AyrKing Mixstir

Unemployment benefits may have a longer-term impact on job seeker supply

Federal unemployment benefits were recently extended through September 6th, 2021, giving qualifying Americans $300 per week. Over the next 25 weeks these individuals will receive $7,500 from the Federal government in addition to the unemployment benefits they may receive from their state government.

While stimulus checks may be spent almost as quickly as they arrive, the unemployment benefits pose a longer-term effect on the supply of job seekers. Although, it’s worth noting that state unemployment benefits will vary substantially from state to state. And states such as Arkansas, Montana, and South Carolina have already opted out of the Federal Unemployment benefits provided by the American Rescue Plan, in an effort to eliminate any disincentives for potential job seekers.

Demand for hourly workers is up… way up!

Consider this $1.9 trillion stimulus package against the backdrop of broader COVID-19 vaccine availability and many state economies opening back up. In recent days both California and New York, arguably amongst the most strict states in regards to pandemic closures, are reporting strong progress toward reopening. Additionally, the old adage, “money burns a hole in one’s pocket” seems to be holding true as consumers begin to flock back to restaurants and bars, likely with stimulus checks “in-hand.”

Chief Economist at Indeed.com, Jed Kolko, recently reported that job postings on Indeed have surpassed pre-pandemic levels. As of March 18th, 2021, there were 10.7% more jobs listed on Indeed than there were on February 1st, 2020. However, restaurant owners are struggling to find applicants.

U.S. Job Postings Indeed

Workstream CEO, Desmond Lim, is calling this phenomenon The 2021 Great Rehiring. Restaurant owners that had to lay off virtually their entire staff, are now having to rehire that amount and more, but the supply of job seekers is clearly at a painful low. While employee hiring has always been one of the top challenges for restaurants, it is now by far the biggest challenge for restaurants across the country.

How to make hiring your competitive advantage

QSRs are faced with the decision to adapt to these circumstances or to continue struggling. Many are seeing a meaningful impact with just a handful of changes to their hiring strategy. Here are three of the most impactful changes reported by QSRs.

1. Up your wages

It may seem obvious, but we recommend that you consider upping your wages. Restaurants that pay above minimum wage are effectively jumping to the front of the line when it comes to sourcing applicants.

2. Review and revise your job posting strategy

Are you spending money to promote your job postings? Do you take a “set it and forget it” approach to your job ads? If so, then you may need to revisit and revise your bids. In a more competitive market, what you were willing to pay for a click last year likely won’t get you the same result now. A quick check-in may reveal that you actually haven’t been spending at all.

3. Be the first. Be the best at hiring.

If you are spending money to promote your jobs, but it takes you too much time to source, screen, and interview candidates, then you’re likely wasting a lot of money. Reaching applicants immediately after they apply and reaching them on their mobile devices will make hiring your competitive advantage in these tough market conditions. Find out how thousands of QSRs are using Workstream’s powerful hiring platform, built on automation and 2-way text messaging, to be the first to source, screen, interview, and hire candidates.

Summary

Economic relief and stimulus from the Federal Government is likely creating passivity in prospective job seekers, while states are re-opening, consumer confidence is rising, and the need to hire is bouncing back in a massive way. Restaurant owners and hiring managers need to review and revise their hiring strategy across wages, job ads, and the technology needed to succeed in extremely competitive circumstances.

  • DAVO Sales Tax
  • Texas Pete
  • T&S Brass Eversteel Pre-Rinse Units
  • Simplot Frozen Avocado
  • BelGioioso Burrata
  • Imperial Dade
  • RAK Porcelain
  • Day & Nite
  • Inline Plastics Safe-T-Chef
  • Atosa USA
  • McKee Foodservice
  • AyrKing Mixstir
  • RATIONAL USA