Blue Ocean Labor Relations: Post-COVID

Empty restaurant kitchens represent a red ocean of pre-pandemic employee/employer labor practices that are both undesirable and unsustainable

A May 8 2021 New York Times article explains that restaurants are having a hard time post-COVID finding staff. “… government support and competition from companies like Amazon make it ‘very difficult for us to compete’ for talent without raising salaries and wages to levels that his businesses can’t support,” said Sean Xie, CFO of a chain of 13 Sichuan restaurants.

Googling and clicking on one of the chain restaurants, Cheng Du Taste, has no apparent advertisement for employees. The restaurant appears on indeed.com and glassdoor with no jobs posted. MIAN, his other chain, has a great Michelin review but also no apparent job listings.

Those reviews did the job of attracting customers. If I’m in the area, I’d love to go eat at Cheng Du Taste or MIAN. But if I were job hunting I’d have no idea they were hiring. Given this, blaming the lack of staff on government support and competition from Amazon seems questionable.

His utterance of the “C” word, “competition” — in regards to employee staffing — gives us a better idea about what might be happening. Like the other restauranteurs in the article, and countless other articles just like it, restaurant owners want a return to the pre-COVID status quo. Those business owners demand and feel entitled to the red ocean labor market they were comfortable in before COVID came alone.

Sorry folks, that isn’t happening and likely won’t happen for a very long time, if ever. New opportunities opened up and the workers you laid off — granted, many of you didn’t have much choice but you did still let them go — have moved on to greener pastures.

Erick Williams, executive chef at Virtue restaurant in Chicago, says people aren’t showing up for interviews. His website demands two years experience for servers, refers to employees as “warriors,” and includes “Serious inquiries only, please” on their web-based application. There are no positions for cooks and they clearly have no intention to train. If he wants to figure out why he can’t find workers, look in the closest mirror.

Rather than bemoan the supposed lack of workers, it’s time to readjust to new market realities. The whole idea of competition for labor in the restaurant field in the US is dated. Competition assumes a static field of more people than positions with employers in the better position at the bargaining table. It’s a red ocean where sandwich chains like Jimmy John’s could demand non-competes from minimum wage hourly sandwich makers. In this new market, Amazon will happily hire those restaurant workers, pay them more, and give them benefits including health insurance, vacation, paid sick leave, and predictable hours. They won’t be burned, literally or figuratively.

Restaurant owners may have to match some of that. Margins were already slim before the epidemic but the red ocean of fighting for labor is going to make them tighter. Don’t fret though: McDonald’s in France has living wages, paid time off, maternity and paternity leave, and medical insurance (albeit with the bulk paid for by the government, something restaurant owners should find appealing in the US). Those McD’s are not only staffed but they’re the second most profitable market in the world, after the US. Restaurant owners, you can do this.

Let’s think of restaurant employees as customers then evaluate what the value of a restaurant job is to those customers (traditional employees) and noncustomers (potential employees). For traditional workers there’s money. It’s a job. There are probably also some who like to cook or serve others.

In any strategic move when your primary appeal is money, you have a problem. You’re competing in a red ocean and red oceans are a bad place to be. You may not get eaten but you’ll always be fighting.

Let’s think about noncustomer restaurant workers. Tier 1 noncustomers are your current workers who want to find something else. As the economy heats up, and other restaurants want them — and so does Amazon, builders, delivery services, and countless other restaurants — they will find opportunities. There’s a fine chance you have lots of Tier 1 noncustomer employees.

Tier 2 are people actively rejecting restaurant work. There’s plenty of those, too. They’re at Amazon filling boxes and getting paid better with more predictable hours, better benefits, and no burns. A few might be home because unemployment pays better but, if you’re not able to top $300 per week, shame on you.

Tier 3 are interesting. They’re the people who you wouldn’t think of as restaurant workers. There are retirees who may want more money but might also just want to get out of the house. White-collar workers who never worked in a restaurant, have plenty of savings, but also want something different than they’ve ever done. People who stayed home with kids but now want back in the workforce. Amateur cooks who want to try working in a professional restaurant. Cooking show enthusiasts. Facebook cooks. The people who love to eat at your restaurant. There are lots and lots of Tier 3 noncustomers and, lucky for you, they may not be all that expensive though they will require training.

However, there are certain conditions those new Tier 3 employees likely won’t put up with and, for that matter, neither will the Tier 2 or Tier 1 noncustomer employees.

On-call scheduling where employers expect employees to wait without pay and be ready to fly in on your whim gets eliminated. An abusive environment where managers yell won’t work; employees will walk out faster than a customer who found a bug on their plate. Even the high-pressure environment might need to be dramatically reduced and, after all, chaos is a sign of poor management.

Restaurants can increase the fun at work. Teaching people how to cook and providing an interesting and fun environment doesn’t cost much but can make a workplace far more appealing. My wife worked at a restaurant when she was younger. Two of her then co-workers are now a neurologist and a pharmacist and all three of them said their time working as cooks and waitstaff were great fun.

Restaurants can work together with other restaurants to provide childcare. They can band together to rent a space, hire professional carers, and either charge employees the cost of providing care with no markup or subside the perk. Paying a carer $15 per hour to watch over eight children costs about $2.50-$3.50 per hour per child all-in. If employers would split this cost with employees, each paying $1.25-$1.75 per hour for childcare, I’d imagine they’d find countless more would be willing and happy to show up for work.

None of these changes are especially costly. A work-study program for aspiring cooks or bored yuppies may actually cost less than the old system. The lower turnover costs of the daycare would also likely reduce costs in the long run. Ensuring that managers treat employees well has no incremental expense tied to it and is simply better business.

All of this requires redefining the boundaries of the employee/employer. If you want hired help you can yell at, abuse, and treat like poorly you’re likely going to struggle no matter how long that model has worked in the past. Employers are forgetting, or conveniently ignoring, that before COVID the job market was already tight. After, as employees saw their countless new options, it’s entirely understandable the market will be tighter.

Employers who want to “compete” with their employees or other employers are going to have an uphill struggle in this market. Don’t compete; make competition irrelevant by redefining the market boundaries of employee-employer relations.