The Great Resignation. The boogeyman of 2021. The haunted stories of people leaving work in droves in search of higher pay, more flexible hours, and better benefits. Across the U.S. there is a mass exodus of people who are leaving work during the COVID pandemic. Most of the workforce was expected to return to work as soon as mandates were lifted and vaccines were made readily available. But it didn't happen. The unemployment rate now is higher than in the pre-COVID era.
If you haven’t noticed the change in the industry and the problems with staffing in recent times, then you might have not had the opportunity to go to a restaurant in 2021. Almost every restaurant is suffering from long wait times. Housekeeping isn’t visiting rooms daily (even at luxury properties). Small, local restaurants are plastering signs begging for workers in their windows. It's brutal, and this cull of the industry has been happening for a few years now.
Back in 2017, an article was published by Insider about how Millennials are killing chain restaurants like BWW and Applebee’s. While it's been true for the past few years that chain restaurants are still falling off, it's clear that they haven't fully died off. The decline in sales was counteracted by the new ‘Ghost Restaurants.’ A restaurant that only offers delivery options. It will usually be a large chain or something and may even rebrand themselves to blend in better. This was a response to the larger demand for more technology within visits to restaurants.
The pre-pandemic data from the National Restaurant Association was showing that this demand was real, not just for the younger generations, but also for older generations. And, to be clear, this didn’t mean that this technology was meant for every food service establishment, it was meant more for fast-casual, casual, and fast food. Again, this fact alone also stands in controversy. In the ’90s and early ’00s, it was well accepted that Applebee’s, Chili’s, or TGIFriday were fine establishments to go to for enjoying dinner, 2 decades of change hasn’t brought around the best that they can offer. Since then, a partial response to the demand has been to add in tablets and person-free payment options (which has actually hurt servers more than anything because of the decline in tips). The quality of food options has declined to cut costs in an industry with already slim margins.
A tight profit margin is what is causing the problems in the industry today. Hospitality workers are infamously an underpaid bunch. Servers get paid less than the defined minimum wage in order to pass off the burden of wages on to customers. How well a server takes care of a guest during dinner doesn’t accurately reflect the tip amount that they will receive. Tipping also tends to lend itself to sexism and racism. Men get tipped less on average than women. And a white server will find themselves making a higher amount of tips on average a black, Hispanic, or Asian server in the same establishment.
Cooks infamously in the industry are underpaid and overworked. It's taboo in the hospitality industry more than any other to talk about pay. Cooks in the U.S. on average make less than $14 an hour. Cooks are not just high school kids picking up a weekend job, or a culinary intern looking for summer work. It includes industry professionals, people who have been working in the kitchen half their life. With the pandemic opening paths for higher pay or better jobs elsewhere. There has been a mass exodus of cooks looking for a life without 60 hour work weeks and less mental and physical abuse.
So far the responses from establishments have fallen into one of three categories: ignore it, Band-Aids, and solutions. I had the pleasure of attending the 2021 NEIRA conference. NERIA is the New England Inn and Resort Association, it's a marketing group that tries to provide SEO and networking to non-corporate hotels and inns in New England. They do an annual conference where they talk about the data from the previous year and provide training and advice going into the future. The consensus from speakers and data is that the industry is changing. People are looking for higher quality services, have less money to spend, and are seeing things such as online booking or WIFI as necessities.
The other point made by the speakers was about the change going into the next year. The average guest is getting younger, even after the mask mandates were lifted in 2021 and vaccines became available to all: the data didn't change. COVID has now permanently altered the industry. The responses I heard from a majority of the other people at the conference? Hogwash. As soon as the pandemic ends things will go back to normal, the industry is going to boom, and people are going to be spending the same money as before. The changes to websites and technology inside your establishment won't matter that much. The people leaving the industry to take time off will get replaced like they always do. But this won’t be the case, with fewer workers now than before (in a no longer growing industry at that) means that many of these operations are going to hemorrhage until they fall.
Many chains are providing temporary solutions to the problems which will also fail. There were stories this year of McDonald's offering a new iPhone to employees who stay with the company for a few months. Applebee's offered a free appetizer for simply applying. These temporary measures will solve a short-term problem, but the long term still stands. People will work and then get burnt out. The industry will still continue to die and chains will slowly bleed.
This is only one piece of the puzzle. There is a massive system at work here. Each cog in the machinery turns another piece. Who knows what piece goes where and what change affects the others. Along with the Great Resignation, there are issues with ethical farming, ecological damages from the farming industry, rampant drug abuse, physical and mental abuse, local vs organic foods, the polarization of consumer demands, and technology and roboticization. But one thing for sure, if there isn’t a response to the changes in demand from workers, there will be a massive coup de grace and the industry is going to see more losses, the unprepared industry titans will fall and crush the bystanders to the havoc. The last two years have been brutal for the industry, but it's the beginning of a metamorphosis into this new era of hospitality.
Here are some of my sources if you'd like to read more!
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