We’re going to go out on a limb and guess that maybe you’ve heard of this thing called the “Great Resignation.” Let’s be honest. Chances are you haven’t just heard about it. You’re feeling the very real, very painful effects in your restaurant business.
47 million people voluntarily quit their jobs in 2021, according to the U.S. Bureau of Labor Statistics. More than 50 million quit in 2022. So, what’s happening to all the workers calling it quits? They’re seeking (and finding) greener pastures in new jobs that offer better pay, better benefits, and better working conditions.
Those trends are happening across industries; the restaurant industry is feeling the effects to an exponential degree. The leisure and hospitality industry saw a staggering 5.1% quit rate in January 2023—more than double the average across industries. According to Black Box Intelligence, turnover reached record highs in 2021 and 2022, increasing by 14% for full-service restaurants and 24% for limited-service venues compared to 2019.
Restaurant workers not quitting outright are flexing their power, calling for higher wages and other concessions from employers. Stories are everywhere of restaurant staff walking out—workers in Seattle, Kansas City, Nashville, Chicago, California, and all around the country threw down their aprons and left restaurant owners high and dry.
A recent study found that 1 in 4 restaurant workers plan to leave the industry within a year. The food service industry’s labor shortage has garnered so much attention that even the satirical publication, The Onion, posted 18 reasons why restaurant workers quit during the pandemic.
So just what has workers fed up enough to quit their restaurant jobs or even the industry? Let’s take a look at the top reasons workers are quitting and how you can motivate restaurant employees to stay.
“For too long, restaurant workers have been treated like we’re expendable. Now, owners (and patrons for that matter) are learning the hard way how difficult it is to restart the engine when you never took care of the pit crew.”
— Adam Reiner, writer and former server
The biggest reason restaurant workers give for unionizing, changing jobs, or leaving the industry entirely invariably comes back to pay. An opinion piece published in the New York Times highlights the fact that the national subminimum hourly wage for tipped workers has been $2.13 for more than three decades. That’s a long time to go without a pay raise.
In recent years, as inflation rose but wages didn’t, restaurant workers realized it pays to leave. Those who switched jobs got a 7.7% pay bump, compared to a 5.6% increase for those who stayed. Higher pay for switching isn’t big news. That’s typical. The figure that should make you sit up and take notice is just how big of a pay jump they got. Black Box Intelligence states the “2.1-point difference is staggering given that the historical difference is a mere 0.7 percentage points.”
One respondent to a 2021 survey painted a bleak picture of life on low wages, “I deserve better than a job that I make just enough to live day by day. That’s the thing: I wasn’t living paycheck to paycheck; I was living day to day. Sometimes I wouldn’t make enough to even get a roof for the night and would sleep in my car outside of my job.”
Restaurant owners and operators are listening. By the end of 2022, food service workers’ average hourly wages had risen to $17.55, well above the minimum wage. Compare that to just $14.17 per hour before the pandemic. Still, the battle for higher wages is only one of the forces driving both part-time and full-time restaurant employees to quit.
When someone is living paycheck to paycheck, an unpredictable schedule can have far more significant consequences than just getting in the way of a night out.
Kristen Harknett is a professor at the University of California, San Francisco, and one of the founders of The Shift Project. In a recent interview with CNBC, she laid out just what’s at stake for hourly workers. “If you don’t have stable and predictable hours, everything unravels,” she explains. “It’s very hard to make ends meet, to pay your bills on time, and to avoid serious material hardships, like hunger or housing instability.”
“If you don’t have stable and predictable hours, everything unravels. It’s very hard to make ends meet, to pay your bills on time, and to avoid serious material hardships, like hunger or housing instability.”
— Kristen Harknett, Professor, University of California, San Francisco, and Principal Investigator at The Shift Project
According to The Shift Project, 60% of hourly workers receive less than two weeks’ notice of revisions in their schedule. Policymakers in cities and states like Oregon, Seattle, San Francisco, Philadelphia, Chicago, Los Angeles, and New York City have passed “Fair Workweek” legislation to protect workers from unpredictable work schedules. The consequences for restaurant owners and operators who run afoul of these labor laws can be significant. In a 2022 settlement with New York City, Chipotle Mexican Grill, Inc. agreed to pay $20 million in compensation to roughly 13,000 workers for violations of the city’s Fair Workweek and Paid Safe and Sick Leave laws.
Did you know that fast food employers in NYC must give workers regular schedules that stay the same week-to-week? What’s more, employers are required to pay premiums for schedule changes or clopenings.
Implementing employee-scheduling software with built-in compliance can make it easier to adhere to national and local labor regulations like the Fair Workweek law.
Even before the pandemic, the food service and hospitality industry had the highest employee burnout rate worldwide. 80% of industry workers said they felt overwhelmed by their workload.
There are also generational factors at play. Gen Z and millennial workers make up the bulk of the restaurant and food service workforce. They also happen to be the generations getting increasingly stressed out and overwhelmed at work.
It’s creating a mental health crisis within the industry. The 2022 AmTrust Restaurant Risk Report analyzed Worker’s Compensation claims and found 2021 had the highest number of mental stress claims on record—shooting up an alarming 71% from 2019.
1 in 2 workers in the food service and hospitality industry said they quit because of burnout. It’s not just hourly workers who are at their wit’s end. Nearly half of food service managers (48%) say they feel burned out on a daily basis.
Chef Marcus Samuelsson said, “You can’t have burnt-out staff and great food.” It turns out you may not have staff, period—let alone great food—if you work them to the point of burnout.
Restaurant owners and operators have to take a page from Samuelsson’s book and make addressing overwork and burnout a priority. If they don’t, they will only find themselves trapped in the vicious cycle of burnout, resignations, staff shortages, and overwork, repeating again and again as they burn through workers and money at a rapid pace.
McKinsey & Company recently surveyed more than 2,100 frontline employees (defined as hourly workers, primarily individual contributors, making less than $22 per hour). They wanted to understand what frontline workers want—and how it compares to what employers think they want.
One of the biggest surprises? The research team found that “the opportunity for job growth or promotion is an even higher priority for frontline employees than pay or benefits alone—and is significantly more important to frontline employees than their employers think.” Learning opportunities ranked third in importance, right after job growth and pay.
Given this insight, it’s no surprise Jonah Stillman, author of Gen Z @ Work, said in a recent interview that “The number one way to keep Gen Z in a job is to show them the path to promotion.” When restaurant workers see their job as a dead-end, they have no problem walking out the door.
Suffocated by a micromanager, demeaned by a tyrant, just about everyone has at least one rotten boss story. Horrible bosses are such a common plight that Hollywood made a movie about it.
Over half of employees quit their job because of a bad boss. The only thing surprising about that number is that it isn’t higher. In fact, an analysis of exit interviews found restaurant employees mentioned “manager” almost twice as often as they mentioned pay.
Restaurant owners and operators bear the responsibility of ensuring managers are actually up to the job of managing people. Just because someone is highly skilled in the kitchen doesn’t make them an exceptional leader.
9 out of 10 restaurant managers started in entry-level positions. This is great news for everyone who aspires to climb the ranks and lead a team one day. However, it also underlines the importance of continuous leadership training and development for restaurant managers and future leaders.
One thing most bad bosses have in common is poor communication. A recent report found Quick Service Restaurant (QSR) workers are 5X more likely to quit over miscommunications with management during their first 90 days than after.
Communication plays an essential role in employee retention from the very beginning. Sadly, leaders aren’t very good at it. Only 35% of frontline workers think corporate leaders are effective communicators, yet 65% of corporate leaders think they’re doing great.
It’s time to close the gap. The same survey of frontline workers found the top three things employees want are to hear directly from their managers, for communication to be short and easy to read, and to have the ability to interact with peers and other locations.
What Gen Z wants might surprise you. Your youngest workers prefer face-to-face communication with their managers (just under 85% of them), according to Jonah Stillman.
This generation of digital natives also wants employers to empower them with technology. A mobile app like HotSchedules, which allows workers to message managers and co-workers to swap shifts, ask for time off, and request schedule changes, can go a long way in helping to solve some of the most common communication issues.
Another hot-button issue that has restaurant workers quitting? Benefits. Or, more specifically, the lack of benefits. A recent DoorDash survey found 2 in 5 restaurant employees are unhappy with their health benefits. No surprise there, considering only 58% of operators (and even fewer independent restaurants) said they offer any benefits to their employees.
Workers are fed up, which explains the growing trend of unionizing within the industry. More than half (56%) of those joining unions have their sights set on improved benefits—it trails higher pay by only one percentage point.
Fran Marion, a Taco Bell employee who walked out on the job as part of a strike calling for improved working conditions and better benefits, spoke with the Kansas City Beacon about the high stakes of healthcare for low-wage workers. “Most of us go without healthcare or are getting Medicaid because we can’t afford to have anything else taken out of our checks,” she explained.
This lack of competitive health benefits is just one of the reasons why so many workers decided to leave the industry in favor of jobs that offered more stable schedules and improved access to benefits like employer-provided health insurance.
For some, the pandemic brought out the best in them. Customers rallied around essential restaurant workers, tipping generously to show their appreciation. For others, the pandemic brought out their worst. Stories of customers going off on restaurant workers went viral on social media. We even talked about it in our recent post on why restaurants are short-staffed.
For Fran Marion, poor benefits weren’t the only reason she went on strike with her co-workers in Kansas City. “I can say that I have personally been called the N-word or some other racial epithet at least four different times since I’ve started working here,” she told reporters.
For many restaurant employees, especially fast-food workers, it isn’t just about getting dressed down by an entitled “Karen” during their shift (apologies to all the perfectly delightful Karens out there, we know you aren’t the problem). The harsh reality is clocking in can be risky.
The latest FBI violent crime statistics list restaurants as the 9th most common location for violent crimes. Bars and nightclubs came in 10th. With headlines like “Cold fries leads to deadly shooting,” “Suspect arrested after mayo dispute at Atlanta Subway leaves worker dead,” and “McDonald’s customer attacks staff with french fry scoop after order took too long,” you’d think we were living in a bad dystopian novel, not modern-day America.
Many restaurant workers said, “enough is enough,” and quit rather than put up with continued abuse from customers.
Long before the pandemic, the restaurant industry had a problem with toxicity in the kitchen. The #metoo movement uncovered rampant abuses by a number of well-known chefs and TV personalities. A 2018 article in the Harvard Business Review reported, “more sexual harassment claims in the U.S. are filed in the restaurant industry than in any other, where as many as 90% of women and 70% of men reportedly experience some form of sexual harassment.”
In 2021, the hit show Top Chef was embroiled in controversy. The season finale was overshadowed by the news that the winner of Top Chef Portland was fired for misconduct from his position at an Austin restaurant following taping of the show.
Any toxic behavior in the workplace, not just sexual harassment, has a far-reaching impact on workers. In its State of the Global Workplace: 2022 Report, Gallup reported the biggest source of burnout was “unfair treatment at work.”
In a UC Berkeley Food Labor Research Center survey, one former restaurant worker shared why she left the industry for good. “Who would want to go back to that kind of environment and stress? They kept saying to servers ‘if you don’t like it you can always find another job’ and that’s exactly what I did.”
“Who would want to go back to that kind of environment and stress? They kept saying to servers ‘if you don’t like it you can always find another job’ and that’s exactly what I did.”
— Heather, former restaurant worker
Now that you know why restaurant workers are quitting in droves. The question is, what are you going to do about it? With each of your competitors fighting over the same limited pool of workers, it’s more important than ever to create an environment that draws the best talent to you and makes them want to stay.
Get creative when it comes to finding ways to build a better culture and connect with your team. Revamping your processes to incorporate technology that fosters better communication and frees up managers so they can focus on building a thriving team can have big impacts on your business.
We’ve seen that using technology to streamline everything from hiring to onboarding to operations can help restaurant operators and managers:
It all boils down to this: when you make your restaurant a safe place where employees feel heard, valued, and cared for, you’ll minimize turnover, maximize retention, and reap the rewards of a happy, engaged staff.
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