10 Common HR Challenges In The Food Restaurant Industry 2023

The restaurant industry is no stranger to challenges. COVID-19 is just one example of the most recent; however, there are many others. From changing customer demands and tastes to rising labor and food costs to increasing competition from both local and international sources, businesses face obstacles on a daily basis.

This article will take a look at the food and dining sector's top 10 challenges and provide some tips and strategies that can help restaurateurs overcome them.

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1. High Turnover

Turnover is a relevant concern for any business, but it's especially problematic in the restaurant industry. As a fast-paced, demanding market, employees tend to have short tenures, resulting in a high turnover rate across the board. Data from the National Restaurant Association^[1] illustrates this well; in 2018, food and dining had one of the highest turnover percentages among America's business sectors at over 70%. More recent data from The U.S. Bureau of Labor Statistics^[2] reinforces this, reporting that restaurants suffered an even higher 86.3% attrition rate in 2021.

Factors such as low wages, poor working conditions, and lack of employee recognition can all contribute to high turnover. The pandemic made many of these preexisting problems worse for businesses, which is why we're seeing the astronomical numbers that we are today.

At its core, this problem comes down to morale and engagement. It's essential that businesses make an effort to prioritize the wellbeing of their staff, both financially and emotionally. Communication is also key; managers need to take the time to listen and understand their employees. Building a respectful, supportive atmosphere can help create an environment that encourages employees to stay and grow with the business.

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2. Payroll and Reporting

Managing payroll and other administrative tasks can be a time-consuming affair for any business, but it's especially cumbersome in the restaurant industry. Restaurants deal with a variety of different wage and hour laws that vary by region. Additionally, the nature of the business demands flexible hours for employees, which can often lead to additional complexities when it comes to payroll management.

The best way to tackle this challenge is through automation. Investing in software that streamlines payroll, reporting, and other administrative tasks can save businesses time and money.

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3. Labor Law Compliance

Labor law compliance is an area that many restaurants are often not prepared to tackle. There are a number of labor laws in place, ranging from minimum wage requirements to overtime pay regulations, and failure to comply with these can result in costly fines and legal action.

To ensure labor law compliance, businesses should take the time to educate themselves and their employees on the relevant laws and regulations.  It's also important to stay up-to-date with any changes that may take place over time.

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4. Workplace Harassment

Workplace harassment can be blamed as the origin of many other problems on this list. It can come in many forms such as verbal abuse, sexual harassment, or discrimination, but in all cases, creates a hostile work environment and erodes employee morale.

The best way to combat workplace harassment is proactive prevention. Employers need to be aware of the signs and be proactive in addressing them. Developing and enforcing clear policies is also important; ensure that your staff knows what behavior won't be tolerated and what the consequences for it will be.

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5. Discrimination

The world we live in has become inherently hateful, and the restaurant industry is unfortunately unprotected from this. Customers and even employees can be the perpetrators of discrimination, which creates a hostile environment and isolates certain demographics.

Employers have the responsibility to ensure that their marginalized staff members - such as people of color, members of the LGBTQ community, and disabled individuals - are treated fairly and given the same resources, respect, and opportunities as everyone else.

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6. Employee-Manager Relationships

The relationship between a manager and their staff is an essential component to the success of any restaurant. Poor communication or a lack of understanding can lead to tension, resentment, and low morale.

Managers should take the time to get to know each of their employees, understand their needs, and create a friendly and welcoming environment. Implementing tools such as peer-to-peer feedback, team building activities, and rewards or recognition programs can all go a long way in promoting positive relationships.

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7. Training

A lack of proper training is a common by product of high employee turnover; managers need people on the floor and in the kitchen at all times - whether  they're equipped or not. This can lead to safety issues, customer complaints, and a slew of other problems that restaurants would rather do without.

To combat this, businesses should invest in comprehensive training materials and processes that simplify onboarding, like training manuals, checklists, and even software programs. All can take the burden off managers and ensure that new hires are up to speed on the business’s rules, protocols, and procedures.

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8. Performance Management

In a customer-centric industry like food and dining, employee performance is critical. It defines the experience people have at a restaurant, whether they're likely to come back, and how much revenue the business can generate.

Businesses need to have systems in place to ensure that employees meet the standards set by management. This might involve tracking performance metrics, providing feedback, and offering incentives for good performance. The goal should be to create a fair and objective process that rewards employees for their hard work.

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9. Inadequate Benefits

While the restaurant industry isn't known for its stock options and 401K plans, there are still some basic benefits that restaurants should be providing their employees. Unfortunately, many restaurants don't provide enough of what staff need to be happy - things like paid vacation days, sick leave and health insurance. This can lead to a lack of loyalty among employees, high turnover rates, and a decrease in morale.

Investing in additional benefits comes at a cost, but ultimately pays off when you consider the operational efficiency and employee satisfaction you get in return.

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10. Inefficient Onboarding Processes

An inefficient onboarding process can be a significant drain on resources and time. Restaurants that don’t take the time to properly prepare their employees for their roles often find themselves dealing with a high rate of employee turnover and diminished productivity due to inadequate training. Not only does this create stress for existing staff, but it can also lead to a lack of understanding and acceptance among new hires.

A comprehensive onboarding process should include thorough job training, an introduction to the restaurant’s values and culture, a review of expectations, a discussion of policies and procedures, and an orientation to the restaurant’s systems. Regular check-ins with new hires can also help ensure that they are up to speed and comfortable in their roles.

Success in the restaurant industry is dependent upon having a team capable of working together both efficiently and sustainably. To ensure that this happens, businesses need to pay special attention to the elements of their human resources operations that are most likely to create problems. Doing so will not only help drive employee satisfaction and retention, but also lead to a more productive and profitable organization long-term.

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[1] https://restaurant.org/education-and-resources/resource-library/hospitality-industry-turnover-rate-ticked-higher-in-2018/

[2] https://www.bls.gov/news.release/jolts.t16.htm