Ron Ferguson wrestles with the hard realities of economics every day. The general manager of the Coppertank Brewing Company in Dallas needs three or four wait staff and a few other people. "It's pretty tough to hire right now," Ferguson says. "There are a lot more restaurants and clubs than qualified people. Every restaurant in Dallas is hiring."
Restaurateurs are living in a Dickensian nightmare: The best of times are ushering in the worst of times. "If I have problems staffing, it's because business is good," says Brian James, general manager of Champps in Las Colinas. Over the last nine years, the U.S. economy created 22 million new jobs. Department of Labor numbers show that more than 80 percent of jobs created since 1993 pay above median wage rates. Clearly some of us are better off now than we were eight years ago.
As a result, restaurant sales nationwide should peak somewhere around $376 billion this year, according to the National Restaurant Association. Some 46 percent of all adults eat outside the home on a typical day. On the other hand, with the nation's unemployment rate at 3.9 percent, a 30-year low, just about every restaurant in the nation needs staffing help. To make things worse, at least from the perspective of local managers, Texas actually outpaced the national average in restaurant job growth. Establishments in the state added 20,300 new jobs in 1999, according to Bureau of Labor Statistics data. That's more jobs than the existing restaurant work force of Alaska and Wyoming combined.
As the job market outside of the food-service industry explodes, drawing restaurant workers away, more and more people eat out each day, creating a need for more workers. No wonder Econ 101 professors stick with fictional "widget" manufacturing in all of their simple supply-and-demand lessons. On a real-life level, Nate's Seafood & Steakhouse in Addison needs six people. The Palm could use dishwashers and porters. A restaurant in Plano needs six servers, three kitchen staffers, two hosts, and assorted others. Add in the more than 5,000 eating and drinking establishments that exist in Dallas, including booths at Reunion Arena and school cafeterias, and the problem becomes truly staggering. "It's getting to the point where managers are covering half of a crew's shift in order to meet budget," says the Plano manager. One of his employees accumulated 40 hours in overtime in a particularly busy--and shorthanded--month. (He asked not to be identified.)
Under these conditions, quality becomes a major concern. If someone refuses overtime, performs poorly, or simply fails to show up for a shift, another restaurant will pick the staffer up. "In a great economy, sales are great," James says. "The struggle becomes execution. If I fire a kid today, he'll be on a shift somewhere else tomorrow." David Darien at Nate's claims that employees in today's market don't take their positions seriously, precisely because so many jobs exist elsewhere. "This is the weakest staff I've had," Darien says, "but it's harder to get and keep people than ever."
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Oh well. In a booming economy, even someone with several pathetic business failures on his or her résumé can run for president. But restaurateurs have a lot on their shoulders. Every dollar spent at a restaurant in Texas generates an additional $1.44 in sales for other state industries, according to the U.S. Commerce Department's Bureau of Economic Analysis. Every $1 million spent on meals or drinks outside the home creates between 38 and 48 jobs. The top establishments in Dallas will earn between $15 million and $20 million in revenue this year.
To overcome staffing problems and thus uphold the nation's economy, Dallas-area restaurants resort to the kinds of tricks employed by high-tech companies. The Palm offered an incentive package including World Series, Stanley Cup, and Super Bowl tickets to a few lucky staffers. Nate's pays a referral bonus of $100 to current staff members for a successful recommendation. Some restaurants promise signing bonuses. A few restaurants even resort to another high-tech-industry recruiting trick: raiding. When James opened his Champps location in July, for example, he hired 286 people without running a single want ad. Instead, he visited restaurants, malls, and other establishments to locate qualified people. On opening day, 210 of these contacts showed up for work. Brian Perry, general manager at The Palm, worries about such raiding tactics--from competing restaurants and from recruiters in other industries who are also desperate for personnel. "I fight every day to keep my employees," he says.
Mostly managers decry the transient nature of their work force. "It's harder now to find good people," Darien says. "The average person has been at three different restaurants in a year." Industry turnover rates hover around 85 percent, with fast-food restaurants registering 117 percent turnover. "In Dallas, it's almost constant turnover," says Ferguson. "You can reach full capacity, but not for long." National Restaurant Association figures show a median tenure for food-service employees of 1.3 years, far below the 3.6 years racked up across the entire economy. "Reliability becomes the biggest issue," James says. Close to 60 percent of all restaurant employees nationwide are 30 years old or younger, with 27 percent being teenagers, according to association surveys. "The demographic group we hire are not the best personal planners," James adds, "and they know they can get work elsewhere."
So to recap: Around 11 million people work in food service--606,800 in Texas. Bars, restaurants, and other assorted outside-dining establishments combine to make up the third largest private-sector industry in terms of jobs created--behind "business services" (all of those consultants) and health care. More than 800,000 restaurants and many more bars and taverns exist in the United States; pretty much all of them are hiring. Managers struggle every day to find workers they know won't stay long. Despite all of those ads on TV featuring happy employees singing about baby back ribs, this is a brutal industry.