State of the Industry, Part 5

Editor's note: Over the next few days, enjoy an 8-part series on disruptions that may affect your business in 2018 and beyond. They are:

Part 1: Natural Disasters and Disaster Relief

Part 2: Ownership & Planning for the Next Generation

Part 3: Millennial Weddings

Part 4: Corporate Catering

Part 5: Staffing Woes

Part 6: Sustainability & Food Waste Concerns

Part 7: Commodity vs Expertise

Part 8: Food Trends for 2018

Check back often for the next installment!

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Staffing woes

For virtually every caterer or restaurateur, staffing is their single largest expense and their biggest challenge. “We are eight years into an economic expansion,” said Carl Sacks, executive director, Leading Caterers of America. “And as we continue the longest economic growth spurt in the postwar era, with unemployment at historic lows, these challenges will continue.”

According to the National Restaurant Association, restaurant industry sales were projected to reach $798.7 billion in 2017 encompassing one million-plus locations, and 14.7 million total industry employees—this is about one in 10 working Americans.

On the catering side, sales are estimated at $8.9 billion for 2017 (about 20% over the most recently reported figure of 7.542 billion in 2012 by the U.S. Economic Census). Scaling up employment proportionately (by 20%) from the 145,000 also reported in 2012, current employment needs in the catering industry would be in the range of 173,000. This does not include QSR, virtual, restaurants, etc.—just traditional catering companies.

It isn’t just the lack of available staff, however, but also the unease sweeping thorough the industry as a whole related to minimum wage increases. When the minimum wage was set in 1938 to minimize worker exploitation, the hourly rate was established at 25 cents. Today, we are creeping quickly toward $15. “Good business leaders want their employees to have a decent life and want their employees to make enough money to afford to live,” said David Cooper of the Economic Policy Institute in a June 2017 article for Talent Economy. “They just don’t want to be put at a competitive disadvantage.”

Lack of available staff and minimum wage increases have created unease among employers. Photo Rosy Usmani, Puff 'n Stuff Catering

From restaurateurs who have added a “labor surcharge” to diner tabs in order to bridge the payroll gap, to increased menu prices touted to include the cost of the requisite tip, business owners have to become creative to stay viable. As bars, restaurants, and caterers reach critical mass, the inability to pay workers more than a competitor across town has reached fever pitch. Paying for uniforms, lunches, and providing a check every two weeks isn’t enough anymore. The industry needs new ways to find, attract, and retain loyal employees.

Anticipate disruption: Look for employees in untraditional ways. Robert (Sully) Sullivan, owner, Utah Food Services, Salt Lake City, UT, suggests looking to the retired community and high schools for temporary workers. “We have been very successful at tapping that resource for over 20 years. We wouldn’t be where we are at today without those people. We have to find sometimes anywhere from between 10 and 300 people to come in and help us produce events. We have reached a point where we can have one person call one group leader… Good Samaritans or other retirement organizations as well as high school clubs such as glee, theatre groups, the yearbook staff—and those resources work incredibly well for us. And then we are cultivating—especially within those high schools—those kids all the way through college. After college I’d say about 40% of those become our captains. It’s a resource you should consider in your local market—you’d be amazed at how much you can reduce the stress, especially when producing the large events.”

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Our series resumes, tomorrow January 12

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