The COVID-19 crisis has had a profound impact on the hospitality industry, and restaurants have borne the brunt of it. Early on in the pandemic, food establishments were forced to close for in-person dining. And even once diners were allowed back in, it took months to reach the point where capacity limits no longer had to be maintained.
Not shockingly, restaurants have lost a fair amount of revenue during the pandemic, and for some, that hit was so severe that they made the decision to permanently shutter. That's been a blow to real estate investors.
Shuttered restaurants have created a vacancy crisis for commercial landlords. And too many of them can also impact local property values. As such, the last thing real estate investors want to see is another massive string of closures.
Right now, there's plenty of demand among customers to dine at restaurants. But food establishments are facing a new challenge: not being able to hire staff.
In a recent Alignable survey, only 3% of small- and medium-sized restaurant owners said they weren't struggling to hire. And while some larger chains may be able to lure in workers with the promise of perks like tuition reimbursement, local establishments may not have the financial resources to match those offers.
Still, there are steps restaurants can take to attract workers. Here are a few options they can explore.
1. Higher pay
The restaurant industry is notorious for lackluster pay. Restaurants that want to gain an edge can offer a higher hourly rate than their competition -- one that allows workers to earn a livable wage and be less reliant on tips.
2. Sign-on bonuses
It's common for major firms to offer sign-on bonuses to employees. These days, it's a tactic restaurants can benefit from. Typically, these bonuses come with strings attached -- stay a certain amount of time or be forced to pay that bonus back -- which can work to restaurants' benefit.
3. Flexible scheduling
Restaurant hours can be brutal. Business owners who can offer more flexibility may have an easier time hiring and retaining staff.
Restaurant workers with children, for example, may need to pay a small fortune for early evening child care before starting their shifts, to the point where those fees are so high they largely negate the benefit of working. In that scenario, letting a shift start a bit later could mean having an easier time hiring someone new or keeping someone on board.
4. Free meals
If there's one resource restaurants tend to have plenty of, it's food. As an added incentive, these establishments can offer workers free take-home meals for their families -- a perk that will save them time and money.
5. Time off for COVID-19 testing
Working at a restaurant can increase the risk of COVID-19 exposure, since it's impossible to dine with a mask over one's face. Not only should restaurants provide workers with masks and protective gear, but they should also provide workers with paid time off to undergo regular COVID-19 testing.
Right now, restaurant work is a hard sell, especially at a time when the labor market is bursting with jobs. Restaurant owners may need to get more creative than usual to entice workers to sign on. If they don't, those who invest in real estate could end up suffering losses.