Restaurant Labor Shortage: How to Thrive with Limited Staff

Imagine catering for a large group of people. You have the food prepared and ready to go, but there’s no one to deliver it or serve it. That’s what it can feel like when you’re operating during a restaurant labor shortage.

You could have the best food in the community but not be able to keep customers happy if you’re understaffed. Unhappy customers can hurt your bottom line in more ways than one, such as customers not coming back and losing sales. With 82% of restaurant businesses openly hiring in 2024, the competition for reliable, quality talent is steep.

Unfortunately, you can’t make new workers magically appear. But you can do something about it. There’s a way to decrease your reliance on in-house staff. Learn how you can make it easier to find and retain employees so you can stop focusing on the shortage and start focusing on more sales—without the stress.

Understanding the current restaurant labor shortage

If you’ve been to the grocery store recently, you’ve experienced shrinkflation. The bag of chips looks smaller, and the basket of apples is one or two apples short. It feels as if you’re losing from every angle. It’s the same for labor. Not only is it becoming harder to find reliable staff, it’s also much more expensive to hire employees when you do.

Restaurant Business reports, “Labor remains more expensive than it was four years ago [...]. Labor retention remains a key stressor for operators, and restaurants have more job openings than almost any other industry.”

In other words:

• Talent is more expensive
• It’s hard to keep that talent
• There are too many openings across the restaurant industry

These gaps affect restaurants in various ways, from the quality of the service to the food and your bottom line.

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The impact of labor shortages on restaurant operations

The front-of-house team member takes phone orders while trying to help a customer at the counter. Because he’s juggling several different tasks, order accuracy goes down. You spend time and money fixing wrong orders, trying to make customers happy after a disappointing experience, and delaying the whole process.

Modern Restaurant Management reports that 51% of customers feel restaurant experiences suffer because of the labor shortage.

In addition to a poor customer experience and a burned-out team, it’s expensive to manage high turnover rates. When you don’t have a full team, your employees are overextended. Your current team will leave soon (or they’ll stop showing up) because they’re working the job of two or three people, and your customer experience quality will suffer. You’re not just down another person—you also have to spend an average of $5,864 in training costs and productivity loss.

It’s an endless cycle of understaffing, poor customer experiences, and declining sales—and it needs to stop.

These factors negatively affect your profitability, which means you work much harder as an owner and miss the chance to grow or even take a day off.

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It’s easy to think of the damage labor shortages do to the restaurant business. But that won’t help you eliminate stress, implement successful staffing, and make customers happy. Instead, you can find success by doing things a little differently.

Strategies for navigating the restaurant labor shortage

You can improve your restaurant staffing levels and retention strategy by implementing key action steps.

1. Add flexible scheduling

When you give employees more control, they will enjoy their work environment and stay longer with your restaurant. Create competitive flexibility perks that allow work-life balance.

One advantage that helps with scheduling is incorporating phone orders and delivery, outsourced by a trusted partner. With these tasks handled by a restaurant outsourcing company, you don’t have to worry about scheduling staff to cover them. That can take care of your short-staffed challenges and allow more flexibility for staff to choose hours and days that work for them.

Restaurants can also add rotating schedules. For example, if there are popular holidays or staff want more weekends off to enjoy with family, you can create a schedule that gives those employees every other weekend (or holiday) off. 

2. Implement employee retention strategies

Along with flexibility, find ways to keep employees, like outsourcing key tasks, paying competitive wages, and improving your leadership skills, for a healthy workplace culture.

If front-of-house staff don’t have to worry about phone orders because of outsourcing, they can focus on the customers in front of them. Partners like Tarro can even provide order information in Chinese if needed for team members with low English proficiency.

Another critical step is lowering your stress. As a restaurant owner or manager, your attitude directly affects turnover. A full 82% of employees say they would quit their job because of a bad boss. 

When employees work at your restaurant, make the effort to show empathy and encouragement, and find ways to make the workplace enjoyable. Outsourcing roles, whether that’s phone orders, delivery, or marketing, can help alleviate your stress so you can improve your presence around workers.

3. Invest in employee recruitment, training, and development

If employees experience growth, they will likely stay longer. Add consistent training sessions (not just for new hires), and create development opportunities like learning new skills. 

There are many ways you can implement educational and development programs:

• Offer small “scholarships” for online classes and video courses for culinary skills, leadership, customer service, and more.
• Schedule regular training to freshen up your expectations and processes at the front counter and kitchen.
• Find local events relating to hospitality and food and invite your staff (even if it’s only a few at a time based on busy schedules).
• Host upskill and cross-skill training so a trainee cook can learn a new skill in the kitchen, like a difficult prepping step.
• Finally, to help with recruitment, owners can connect with their community at job fairs, workshops, and chambers of commerce to find new employees. 

4. Leverage technology to streamline operations

Restaurants should also use technology to modernize their business model. For example, you can outsource phone ordering and delivery so your restaurant employees can focus on the tasks in front of them.

In an analysis diving deep into American Chinese takeouts, restaurant owners tackled their barriers head-on: One challenge is that young people aren’t as willing to work in the challenging Chinese takeout food industry.

Before, Chinese food was often the only work option for Chinese immigrants and families. Today, these workers can make money with Uber, construction, and other industries.

Even when restaurateurs hire the right people, they often deal with bad attitudes and less-than-perfect consistency. Plus, when phone orders come in during busy times, it’s almost impossible for someone to pick up the phone to take a detailed order.

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Many owners conclude that if they can outsource, staffing and operations will be much easier.

For example, restaurant staff can focus on their main roles, such as cooking or serving customers at the front desk. This relieves the pressure and stresses of multitasking while also making it easier to hire team members based on clear expectations and fewer needs for staff English proficiency.

By outsourcing phone ordering and delivery with a restaurant answering service, restaurants can grow their business with staff that enjoy working there and continue to give their best effort.

These changes have led to multisite growth for Nice Day in New York and Connecticut. The team can efficiently run their restaurant knowing that takeout orders are on auto-pilot and done by a dedicated team of representatives.

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Future outlook: Preparing for long-term labor challenges

The hospitality labor shortage will constantly change and evolve—it’s the restaurant business. Things move fast, but the labor shortage may stay for a long time, with the U.S. Chamber of Commerce stating, “We have 8.2 million job openings in the U.S. but only 7.2 million unemployed workers.” This deficit will affect restaurant owners if they don’t prepare with long-term staffing strategies.

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We know that:

• The labor shortage will continue for the foreseeable future.
• Fewer people are in the labor force due to a desire to work remotely or lack of desire to work.
• More businesses choose outsourcing to fill that gap by reducing the need for labor and optimizing operations.

What restaurants can do is prepare for the future based on modern trends.

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Customers want to order fast and have a great experience. By investing in technology and outsourcing, you can provide high customer satisfaction and combat the restaurant worker shortage.

Businesses continue to see the benefits of outsourcing across the board. In its report Outsourcing And Shared Services 2019-2023, Deloitte predicts outsourcing will hit $1.1 billion by 2025. 

Technology, for example, can help you process more orders by handling phone orders and deliveries. Call center services like Tarro can answer calls in three seconds or less. Thanks to AI-empowered human representatives, the team can take one call or even ten simultaneously. Your customers can order 24/7, 365 days a year.

With outsourcing solutions like these, you don’t need two employees taking orders during rush hour. Even better, you won’t have to deal with unpredictable peaks and downtimes. Instead, representatives can take your orders for pickup and even send delivery drivers.

By investing in technology, you don’t need as much staff. You also expand your hiring pool since you don’t need to worry about high English proficiency or challenging multitasking expectations. Restaurant teams can focus on their roles and what they do best without burnout.

As the labor market changes, you can confidently rely less on your in-house staff and more on a dedicated, high-quality team of agents to walk through menus and take accurate orders.

End your labor shortage worries for good

Is outsourcing the answer to the labor shortage, then? The best approach is the long-term approach: what’s in your control. Outsourcing protects you from labor shortages and streamlines your operations.

That’s why so many restaurants use Tarro to combat employee shortages while also growing their business.

Tarro’s AI-powered technology and human representatives become your partners, supporting your phone orders, delivery, and even marketing. While Tarro’s teams take your orders, you can focus on the tasks before you. Everyone on your team can do a better job without the stress, making keeping and hiring employees much more accessible.

That’s exactly what happened to Mr. Chen and his restaurant in Boston. He had plenty of orders but few staff members, so the owner couldn’t keep up and make all the sales he wanted to.

Mr. Chen automated his customer order-taking process with Tarro. The change proved to be the right move when Mr. Chen experienced the most challenging test for his labor solution during the worst labor shortage in recent years. He says, “Tarro has been a game-changer that kept us afloat during the toughest days of [the COVID-19 pandemic].”

With a stronger front desk that could now focus on the customers in front of them and tech-driven fast orders with Tarro, Mr. Chen saw revenue double from $40,000 in phone orders to $80,000 per month within three years. The owner boosted sales, reduced labor costs, and enhanced customer service despite labor shortages.

You can see similar growth for your restaurant no matter the labor market when you take control of your restaurant’s future with a partner like Tarro.

Book a meeting to learn how to streamline takeout orders with a 99.5% order accuracy rate—without hiring more employees

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