Slow service, confused staff, or the wrong order seem to be among the bad experiences of millions of Americans in recent years when dining out. But why;
Four years after the devastating coronavirus lockdown, the catering industry is still in crisis.
The main problem, according to Business Insider special editor Corey Mintz, is that restaurants are struggling to find enough skilled workers, an issue that pre-exists but has been dramatically exacerbated by the pandemic.
It is recalled that in Greece, not only the tourism sector, especially during the summer months, but also restaurants, supermarkets, constructions are looking for qualified staff, but they are unable to find them.
In early 2023, the National Restaurant Association in the US found that there were 400,000 fewer people employed in hospitality industries than in 2020, and an estimated 87% of restaurants were operating understaffed.
By the end of 2023, restaurant employment finally surpassed pre-pandemic levels, according to the Bureau of Labor Statistics, but there were still nearly 1 million jobs. At the same time, many preferred to order food in, with online ordering and reservation software company Toast recording 74% annual turnover for these restaurants, the highest of any industry in the US.
Employers and industry leaders are truly desperate, with some ‘hoping’ for a…recession
Despite this existential threat, most seemed confused about how to save their restaurants.
Employers and industry leaders are really desperate, with some ‘hoping’ for a…recession that will force people back into the industry.
But according to Toast’s 2023 survey, the No. 1 reason restaurants lose employees is bad bosses, followed by low pay, long hours, poor culture and lack of growth opportunities.
Desperate restaurateurs
Restaurateurs thus try to find formulas, but they seem afraid to try something new and that too, as Business Insider reports, because the changes may not be approved by the customers and rightfully so most of the time.
For decades, American customers have been accustomed to a certain kind of experience, that of being served by people, ordering food from a waiter, not at a counter like in American fast food restaurants. And that means the customer can then decide whether to tip.
So this is where things start to show, as many customers don’t like it when their favorite dish is no longer on the menu or the nice waiter who served them is gone. So they don’t go to the same store again.
Even when the change is an improvement, it can leave loyal customers feeling alienated, according to a 2022 study.
But this becomes a problem when, in order to survive, restaurants must evolve.
To deal with this crisis, many restaurants have begun experimenting with removing tipping, reducing staff and adjusting the price based on demand.
But if they’re not careful, these changes can make customers hate them.
The racism hidden in the tip
Tipping has long been a problem for American restaurants. Unlike most in rich countries, waiters in the US rely heavily on tipping. But this model allows for abuse by both clients and managers, who have the power to withhold the most lucrative shifts.
So because wages are determined by customers, tipping exacerbates discrimination based on race and age while suppressing wages for those working “behind the scenes” in the kitchen.
A 2014 study found that customers tended to tip black waiters slightly less than white waiters. Another study found that the hourly earnings of waiters exceeded the pay of cooks by 112%.
Since “front” workers make the most from tips, the best waiters usually don’t want to be promoted to management, which often means more responsibility for less money.
To solve these issues, more restaurants are replacing the tip with “extra service charges” to cover the cost of wages. Of course this angers many customers.
A 2018 study found that restaurants that replaced tipping with service charges or included service prices received lower online customer reviews, particularly at restaurants with lower prices.
For example, a $10 sandwich plus a 20% tip is very different from a $12 sandwich with service included.
Many restaurateurs also worry that if they eliminate the tip, their best servers will leave.
Some other restaurateurs prefer to remove staff and instead ask customers to order at a counter before being seated.
Some adopt dynamic pricing of their dishes, i.e. if a compared dish is in high demand from customers then its price increases in real time.
Some others resorted to innovative solutions that did not have a negative impact on customers. For example, in Ann Arbor, Michigan, for 30 years, the Zingerman’s Business Community has been operating, in which employees participate after training in business management and decision-making. So when the business does well they are rewarded.
But beyond these, according to the American publication, the existential crisis in the industry is not going to be solved by a recession or voice order technology.
The fundamental problem is that restaurants have long mistreated their workers. So when many veteran employees had the opportunity to leave the industry during the pandemic, they did.
To survive, restaurants need to rethink how they treat their employees, and to do that, everyone who eats at the restaurants needs to swallow the “pill” of change, Mintz concludes. Can something like this be implemented in Greece?
