Approximately 1.2 million people in Canada are employed in the restaurant industry, according to Statistics Canada’s Labour Force Survey, accounting for seven per cent of the country’s workforce. It’s an industry beset with challenges such as labour shortages, increases to minimum wage and other labour-related roadblocks.
Ontario’s recent decision to raise the minimum wage has caused great consternation in the restaurant industry across the province. Margins are tight when running a restaurant and the increase in the minimum wage puts pressure on the bottom line. Paul S. Hewitt, a Toronto-based CAP, has written extensively about the impact of the increase in Ontario’s minimum wage. In a blog post, How Much Will Minimum-Wage Hikes Affect Your Prices? Hewitt says “not only will those currently receiving minimum wage see an increase in their hourly rates, those earning more than the minimum are likely to get raises, too. Dishwashers, bussers, runners and host/hostesses will all begin earning as much — or more — than cooks and will be closer to earning as much as chefs. Cooks and chefs will demand increases to maintain their relative positions in the pecking order [so it’s] safe to say all wages will rise. The most likely overall bump is 20 per cent.”
He says operators also need to consider payroll benefits such as CPP, EI, WSIB, vacation pay, and EHT. “In Ontario, these amount to between 12.8 per cent and 14.8 per cent, depending on whether EHT applies to your restaurant. As a result, the total increase in labour costs will be around 22.8 per cent.”
David Hopkins, president of The Fifteen Group — a Toronto-based restaurant consultancy firm — agrees any changes in wages will have a direct impact on a restaurant’s bottom line. His group predicts when the minimum wage in Ontario goes up to $15 an hour, “it will reduce the average restaurant profit from a positive four per cent to a negative six per cent.”
Hopkins says while some restaurants will likely shutter as a result, the majority will find ways to accommodate the increase in salaries. In fact, many have already been increasing wages in order to attract talent because, says Hopkins, finding good staff in foodservices is hard — and keeping them is even harder.
“All our clients are having a hard time finding quality people to hire and this promotes increases in wages,” Hopkins adds. “If there is a shortage of good people, you need to pay [well] to get them to work for you.”
Joe Baker, dean of the School of Hospitality, Tourism and Culinary Arts at Toronto’s Centennial College, says while wages are important, the pay scale is only one factor in hiring and keeping good people. He says what is just as important is the workplace culture a restaurant creates and the investment operators are willing to make in their employees. “What it comes down to is restaurant owners being focused on investing in human capital,” Baker says. “Where there is not enough labour supply to serve the demand, the employer needs to get more creative in how they engage with people, how they recruit them and, just as important, how it retains them.”
Rudi Fischbacher, associate dean with the School of Hospitality, Recreation and Tourism at Humber College, says retention of highly skilled employees in the foodservice industry is an ongoing problem. “Many graduates, after two to three years, are leaving the [foodservice] industry and they are leaving because of unfavourable work conditions; unfavourable pay conditions and people want to have a life outside of the industry as well.”
While the restaurant industry holds a certain appeal for many, the long hours, tough working conditions and the often low pay also cause many to leave. Fischbacher says high turnover rates and the costs to restaurants of always having to hire and train new people may have put a greater focus on creating a workplace culture that values employees in order to attract people and have them stay.
“If you invest in training, show people the opportunities they have in working for you and work with them to help them achieve a healthy work-life balance while providing them with a decent wage, you will create a culture in your business that will be a benefit to the employees and to that businesses’ long-term success,” Fischbacher adds.
Ryan Visser, Retail director with the School of Hospitality, Recreation and Tourism at Humber College, agrees a healthy workplace culture can be more important than salary. He says many of the more progressive restaurants are starting to take a page from what other industries are doing to attract and retain employees. For example, he says restaurants are starting to look at investing in ongoing training for staff, more flexible work hours, encouraging feedback from employees to improve the operations of the restaurant and adding fully equipped and furnished staffrooms for employees.
“We underestimate how many people today don’t just want to have a job, but a job where they’re set up to succeed, a job where they can grow, learn and develop,” adds Hopkins. “A lot of restaurants are not run as polished businesses. They are run very much by the seat of one’s pants, which is very frustrating for employees as they are not given the tools to succeed and don’t know how to grow and do better.”
Thomas McNaughtan, vice-president with South St. Burger, agrees workplace culture is key to attracting and keeping people — especially in the QSR market where salaries are tight. He says his company puts a great deal of effort into creating an attractive workplace environment. This means encouraging management to know the people working in the individual franchise locations and giving mangers the ability to create flexible working environments, for example.
“Even in my position as vice-president, I probably know about 60 of our front-line staff, their lives, how they’re doing in school and their long-term plans,” he adds. “Hiring in the food industry is difficult, as it’s not seen as the most prestigious line of work to enter…so we really want to let our workers know that we care for them and they’re not just a number to us and we work hard to bring a staff together and build a great team.”