Running a restaurant comes with its unique set of challenges and managing human resources (HR) effectively is crucial for success. In this blog post, we’ll highlight the top five HR challenges faced by restaurant owners and provide insights on how to address them.
1. Recruitment and Retention: Securing and retaining skilled and reliable staff is a perennial challenge in the restaurant industry. High turnover rates and fierce competition for talent make recruitment a constant struggle.
One valuable tool to attract and retain employees is offering competitive benefits like Earned Wage Access, providing financial flexibility that appeals to many workers.Earned Wage Access (EWA) is an increasingly popular benefit in the retail and hospitality industries. EWA is also referred to as instant pay or on-demand pay. Regardless of what you call it, EWA is a financial service offered to employees (mostly low-wage and hourly workers) where the EWA providers like ZayZoon make some of the employee’s accrued wages available through an app before the end of their employer’s payroll cycle.
2. Onboarding: Busy owners and managers may overlook crucial tasks like completing I-9 forms during the onboarding process, leading to costly errors. Outsourcing this function to HR professionals can save money and ensure compliance, especially considering recent changes to the I-9 form in November 2023.
3. Training and Development: Training new hires and continuously developing existing staff is essential for maintaining high standards of service and food quality. This process can be time-consuming and costly, particularly for managers juggling multiple responsibilities. Investing in training programs and resources can alleviate this burden and foster a skilled workforce.
4. Compliance with Labor Laws: Restaurant owners must navigate a complex web of labor laws and regulations, especially concerning pay. Compliance with minimum wage, overtime pay, working hours, and health and safety standards is non-negotiable and requires ongoing vigilance. Staying informed about changes in regulations and seeking professional guidance can mitigate the risk of costly fines and penalties.
It’s important to note that labor laws exist at multiple jurisdictions, so be restaurant owners must be sure to navigate compliance for state and local laws, as well as federal. For example, when New York State passed its Fair Workweek Law, several restaurants found themselves under fire, including a fast food chain that reportedly violated the law nearly 600,000 times across its NYC locations, resulting in a lawsuit from the Department of consumer and Worker Protect seeking $150 million in damages.
5. Scheduling and Labor Costs: Balancing staffing levels to meet customer demand while controlling labor costs is a delicate balancing act for restaurant owners. New scheduling mandates from the Department of Labor add an additional layer of complexity to this challenge.Leveraging technology solutions like time and attendance software and adopting strategic scheduling practices can help optimize staffing levels and minimize labor costs without compromising service quality.
Effectively managing HR challenges is essential for restaurant owners striving for success in a competitive industry. By addressing recruitment and retention, onboarding processes, training and development, compliance with labor laws, and scheduling concerns, owners can create a supportive and productive work environment conducive to long-term success.
Prioritizing HR management can be difficult for busy restaurant owners who should consider engaging the support of small business HR experts to help them overcome these obstacles and thrive in an ever-evolving industry landscape.