How Restaurants Can Survive—and Thrive—During the Labor Shortage
- brad2281
- Jun 1, 2023
- 3 min read
Updated: Jul 31, 2025
Across nearly every industry, businesses are facing labor shortages, but few have been hit harder than the restaurant industry. Although the COVID-19 pandemic made things worse, the roots of this issue go deeper. From high employee turnover to low wages and a lack of benefits, foodservice operators have long battled workforce instability. So what's really driving this labor shortage, and how can restaurants overcome it?
What's Behind the Restaurant Labor Shortage?
1. Low Wages and High Expectations
Historically, restaurant jobs have been demanding but underpaid. In the U.S., many workers rely on tips to supplement base pay, often falling below minimum wage during slow periods. When combined with long hours, high stress, and physically demanding conditions, it's no wonder many workers are leaving the industry or avoiding it entirely.
2. Skill Gaps and Limited Training
Today's restaurant roles often require more than just basic service skills. Owners need staff who can multitask, manage systems, and maintain high standards. But with fewer experienced applicants, businesses face a catch-22: not enough skilled workers to train the next generation.
3. Post-Pandemic Perspective
COVID-19 forced thousands of restaurants to close, lay off staff, or reduce hours. When restrictions were lifted, many former employees chose not to return. Why? Low pay, minimal safety measures, and the lack of career growth made it an easy decision for many to move on.
If the Industry Is Recovering, Why Is the Labor Shortage Still Happening?
Even as diners return and business reopen, employees are demanding more, better pay, safety, flexibility, and respect. Meanwhile, travel bans and visa limitations have restricted the flow of foreign labor. Combined, these challenges have created a perfect storm.
How Restaurant Owners Can Survive the Labor Shortage
The good news? There are practical steps you can take to protect your business, retain staff, and attract quality talent:
1. Act Fast on New Applicants
Don't let good prospects slip away. With demand high, applicants are often fielding multiple offers. Move quickly, schedule interviews promptly, and follow up fast to secure top talent.
2. Prioritize Retention
Your existing staff is your most valuable asset. They know your systems, your menu, and your expectations. Protecting their happiness is cheaper than hiring and training new people.
Quick wins to boost morale:
Free meals or snacks
Employee discounts
Flexible shift scheduling
Open forums for staff feedback
3. Offer Competitive Incentives
While signing bonuses are trendy, retention bonuses can be even more powerful. You can also:
Offer bonuses for staff who refer new hires
Reward team members for loyalty or performance
Match incentives for both new and current staff to avoid resentment
4. Automate Wherever It Makes Sense
Smart technology can ease your team's workload. Consider:
Sensor-based cleaning systems
Self-service ordering kiosks
Online reservation and payment integrations
Less grunt work = more time for high-impact tasks
5. Rethink Your Business Model
Adaptability is key. Consider how you might evolve your operations to align with today's workforce expectations.
Ideas worth exploring:
Open-book management: Give employees insight into financials and help them understand their impact.
Profit sharing: Reward staff with a share of the business's success
Cross-training: Empower your team by developing their skills across departments.
Value Your People, and They’ll Stay
While the labor shortage may not be solved overnight, restaurant owners who invest in their teams will be the ones who succeed long-term. A supportive work environment, competitive compensation, and open communication can transform turnover-prone teams into loyal, high-performing crews.
The takeaway?
Treat your staff well, and they'll not only stick around, they'll become your best recruiters.
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