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Restaurants Should Use On-Demand Pay to Attract and Retain Staff in a Competitive Labor Market
Both full-service and quick-service restaurants face similar challenges such as increasing competition for labor, rising food costs and rapidly changing consumer expectations.
But restaurateurs choosing to invest in their employees’ financial health and overall wellness are finding success even against those headwinds. They’re winning by creating an environment where employees want to pick up that extra shift, are actively engaged and ultimately stay longer because they’re empowered with on-demand pay.
Competition for Labor Continues
In 2022, restaurants had to reduce operating hours by an average of 6.4 hours per week, compared to pre-pandemic. Those cuts increased to 7.5 hours per week for independent operators.1
According to the National Restaurant Association, the industry is still 450,000 jobs (or 3.6%) below their pre-pandemic staffing levels.2
Understaffing is Negatively Impacting Customer Satisfaction
As restaurants continue to deal with labor competition, being short-staffed is limiting service quality and impacting customer satisfaction. For example, ratings are suffering due to slow “speed” — which is often the result of being understaffed.3
Overall, 62% of restaurant operators reported being understaffed.4
If restaurants are understaffed, they may be hard-pressed to keep up with customer expectations and build customer loyalty.
Shifting to Gig Scheduling May Provide Some Relief
Food delivery apps have continued to increase in popularity since 2020 with an estimated 53.9 million smartphone food delivery app users across the United States in 2023 compared to 36.4 million in 2019.5
The increase in gig economy jobs may continue to evolve the restaurant industry and allow workers to pick up shifts on an ad-hoc basis for whatever best fits their schedule. In addition to picking up shifts on demand, restaurant workers are beginning to expect a similar experience with their pay schedules.6
Invest in Employee Wellness to Address Challenges
Employers must invest in their employees with valuable pay and benefits packages, opportunities for career growth and more flexibility in their work.
Additionally, restaurant owners and operators should consider enticing employees with benefits other than increased pay, as pay increases alone may not be enough to beat the competition and attract applicants.
Operators can set themselves apart by offering the benefits today’s employees are asking for. Empowered with greater financial visibility and control, employees are able to avoid the expensive alternatives they’re using today.
An on-demand pay benefit through DailyPay has been proven to reduce turnover costs, improve retention and strengthen the employer-employee bond.
Learn how DailyPay may help to drive value for your business.
All information herein is for educational purposes only and should not be relied upon for any other use. The information herein does not constitute the rendering of financial, business, accounting, securities, tax, legal or professional advice by DailyPay. No fiduciary obligation or duty exists, or is created, between you and DailyPay. DailyPay does not warrant the completeness or accuracy of any information provided to you.
1 https://datassential.com/resource/reduced-restaurant-hours/:DailyPay, 2020
2 https://restaurant.org/research-and-media/research/economists-notebook/analysis-commentary/restaurants-added-jobs-in-24-consecutive-months/:DailyPay, 2020
3 https://guestxm.com/restaurant-sales-signal-tough-times-ahead/:DailyPay, 2020
4 https://restaurant.org/nra/media/research/reports/2023/2023-soi-executive-summary.pdf:DailyPay, 2020
5 https://www.statista.com/statistics/1189404/food-delivery-app-users-us/:DailyPay, 2020
6 https://modernrestaurantmanagement.com/2023-outlook-trends-and-challenges-restaurants-will-see/:DailyPay, 2020
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