Well, I suppose desperate times call for desperate measures.  If there is stability in the restaurant business – I’m not quite sure where it is.  With a real need to try and make-up for a lost year and an overnight demand for dining out – restaurants are faced with a new pressing issue: where do we find the staff and how do we keep them?   When demand exceeds supply in any situation – businesses know that prices inevitably go up.  The strong survive and the weak shall perish.

So, the reaction now is to pay whatever is needed for staff positions in your local restaurant.  This knee-jerk reaction is true with positions from dishwasher to chef, and server to manager.  Restaurants are panicked with a need to operate at a high level with bare bones staffing – oftentimes with underqualified individuals.  “We need to fill schedules or reduce hours of operation and cut back on services.”  Those empty tables in restaurants are now a result of inadequate staffing rather than fewer than needed customers.  How many of your local restaurants are down to five-day weeks out of necessity?

So, here we are – the battle lines are drawn and as challenging as competition has been in the past – it is now becoming brutal.  Forget about local restaurants working together to try and find solutions – it is becoming every man for himself.  The unwritten agreement for many had been to never actively pirate good employees from a neighbor, but it seems as if that is out the window.  Survival instinct is a funny thing – it over-rides everything else.  It is human nature to pull out all the stops when it comes to taking your next breath – the same applies to business.

Necessity has driven a stake in the heart of “we’re all in this together” and replaced it with do or die.  It can be seen in every community, every town and city, and every state from New York to California – restaurants are throwing money at decent staff members to lure them over to their team.  A local business (with a high-profile clientele) is offering upwards of $60,000 a year for line positions that previously paid less than half of that.  No one can blame a line employee for jumping at the offer and waving goodbye to their current employer – it would be foolish to turn that down.  This is the exact same scenario that led professional sports to adopt free-agency and allow players to jump from team to team and the highest bidder.  It is suddenly a seller’s market for restaurant employees and as such restaurants find themselves in a bidding war.

Now, these same restaurants realize that their most important asset (great employees) is always in the market for something better.  Once this reality hits home then restaurants will be less likely to try something new and invest in an employee’s creativity and ideas.  If there is always fear that they may be here today and gone tomorrow, then the restaurant cannot afford to give the employee this kind of latitude.  Investing in training will also fall by the wayside as it is viewed as a wasted investment of time and money.

I remember throughout my career the line that local businesses tried not to cross: “thou shall not pirate a competitor’s employees.”  Now this might seem unfair to the average employee who has a need to look out for his or her own interests and find an employer who values what they bring to the table but hear me out when I say – this is a slippery slope.

First, and maybe most important from a business perspective:  THIS IS NOT A SUSTAINABLE PRACTICE.  Certainly, we all know that many restaurant employees are under-valued and poorly paid.  This is a challenge that must be faced and corrected, but it does not mean that “whatever is needed is right”, will work.  Right now, restaurants are trying desperately to survive and get through the day.  Hopefully, they can meet the demand and find their way to profitability, but right now it’s all about survival.  Being pushed into survival tactics rarely yields the best long-term solutions.  When businesses REACT rather than think things through and ACT from a point of understanding and planning then they will ultimately find a need to correct what they did.  When things settle down, when restaurant owners take a deep breath, when accountants look at the financial statement for the month, and when customers have had their fill of making up for lost time – then what?  How long before that $18 per hour dishwasher or $30 per hour line cook no longer makes sense?

When that time comes, I am not happy to tell you that those higher paid positions will be rejected by ownership, when staffing positions will be cut to help stop the financial bleeding, and suddenly those golden horse positions that seemed too good to be true will be just that.  Maybe even more important – the relationship between competing restaurants, between managers of those operations, and between chefs from property to property will be doused in anger, disrespect, lack of trust, and an eye for an eye mantra.

So, for the restaurateur here are my thoughts to consider:

[]          Think this through.  Do you really want to alienate your competitors?

[]          Know that once you start a bidding war for employees – someone will always be willing to outbid you.

[]          Do you really want employees to work for you just because you offered them more money than another restaurant?  Wouldn’t you rather have them choose you because your operation is one that they can align with and respect?

[]          How long can you afford to pay wages that are not in line with what your business requires?

[]          Those who currently have great employees – make sure you give them a forum to offer their ideas and express their concerns.  Determine what you can afford to pay them and discuss that with each employee.  Make sure that you celebrate the culture and the teams that you have created – people want to work where they feel part of something bigger than themselves and where it is apparent that they make a difference.

[]          Don’t become angry when a great employee leaves for a better offer.  Tell them how you feel and how they will be missed, make as good a counteroffer as you can, and then stay in touch with them after they leave.  Who knows – they might be back once they see what they have left and what they are faced with.

For the employee seeking the best opportunity and the most lucrative offer:

[]          Money is important, and you should always seek to find an employer who recognizes your worth but know that “too good to be true” has a short lifespan and you may find that the opportunity disappears sooner than you expect.

[]          Just because an employer pays higher than expected wages does not mean that they will be great to work for.  Check out the work culture before you are swept up in the excitement of the offer.

[]          Don’t burn any bridges.  Give plenty of notice, keep an open mind to any counteroffer, and don’t leave a good employer hanging in the middle of peak business or without any prospect for a replacement.   They invested in you, and you should always recognize this.

I hope that we see our way through this time and remember that we are part of a business that shares common challenges.  Free-agency continues to break up the most promising organizations from professional sports to colleges, tech companies, and not-for-profits.  Let’s try to avoid going down that path.


Harvest America Ventures, LLC

Restaurant Consulting

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