Nearly 30% of eateries have been understaffed for two years.
Square surveyed restaurant owners and managers late last year. Many food service workers departed after the 2020 epidemic caused huge layoffs.
The manpower scarcity has caused longer wait times, fewer hours, reduced menus, higher pricing, shuttered dining rooms, and restaurant closures.
Technology can revolutionize the industry during the scarcity. Restaurants are filling operational holes left by staff with pandemic-era technology. Square found that over 20% of restaurateurs planned to automate certain activities.
Next Insurance analyzed the workforce gaps and how restaurants are employing technology—or intend to—to keep business going.
Staffing shortages examined.
Diverging bar chart indicating hospitality hiring against available jobs over time.
In June 2022, total employment restored to pre-pandemic levels, although the hotel and food services industry is still recovering.
Food service and accommodation positions fill fast despite considerable turnover. According to Bureau of Labor Statistics statistics from 2000, hospitality hiring have consistently exceeded vacant openings at the end of the month. This figure encompasses more than simply restaurants and bars, yet they make up roughly 90% of industry employees.
The COVID-19 epidemic and Great Resignation left hundreds of thousands of hospitality positions empty each month. Burnt-out restaurant workers left for better-paying employment or quit. Tapered immigration has also reduced the industry’s main recruitment pool. Remaining workers are unionizing for stability and safety.
Some restaurants are raising salary, perks, recruiters, and temp agencies to address the workforce shortage. Technology is filling gaps for others.
Tech takeover
During the personnel shortfall, restaurants may automate ordering and payments.
QR code menus and delivery app ordering become the norm in 2020 and have persisted even after pandemic protocols were loosened. These technologies enable eateries operate with skeleton employees.
Nine in 10 restaurateurs polled by Square in 2021 believed automation will assist solve operational shortages. They considered handling internet, app, in-person, and kiosk orders and tracking real-time menu item availability.
Technology meets client needs. According to the latest Square research, two-thirds of customers prefer automation in at least one eating encounter. People appreciate ordering at kiosks, paying contactlessly, and booking reservations online. As people grow more tech-savvy, preferences will change.
These technology can be expensive, especially for low-margin businesses like local restaurants. As customer habits and technology change, so does unpredictability. However, when food, labor, and turnover costs rise, IT investments can reduce expenses over time.
