Ask operators what keeps them awake at night and undoubtedly staffing will surface as the number-1 issue. In an industry that struggles with high turnover, hiring, training and retaining personnel is a daunting task. As if matters aren’t challenging enough, recent changes to the minimum-wage legislation in several provinces are exacerbating an already untenable situation (see story on p.28) and ongoing debate over tipping is creating intense dialogue and division.
Most operators acknowledge the importance of paying staff a fair wage and myriad operators do a commendable job, but are they the norm or the exception? Rising costs, increased government intervention and low profit margins make running a restaurant challenging at the best of times, with many analysts suggesting recent changes to the minimum wage will prove detrimental, not only to operators but to workers, too, creating reduced job opportunities — especially for teenagers and immigrants.
Recently, a group of 53 economic experts, cited in a release from the Fraser Institute, dismissed this widely held belief as “fear mongering” and “out of line with the latest economic research.” Yet, in a new academic study done at the University of Waterloo in Ontario, professors Kate Rybczynski and Anindya Sen measured the employment effects of 185 changes to minimum wage in Canada’s provinces from 1981 to 2011 and found a 10-per-cent increase (much lower than the 32-per-cent increase the government is implementing over the next 18 months) lead to up to a four-per-cent drop in teenage employment. As we were going to press, the Ontario government admitted the dramatic increase in the minimum wage will hurt jobs and businesses and has now promised to look at ways to lessen the impact of its policy.
Clearly, the industry is at a crossroads and new solutions are needed. And while it may be reassuring to see some relief in sight, the industry must still come to terms with labour challenges. In a world where disruption is de rigueur, isn’t it time the industry stops viewing itself as a pit-stop to something better? Isn’t it time the industry deals with its perceived shortcomings and become more professional in its approach? Isn’t it time for the industry to measure itself against other industries, and other countries that have dealt successfully with similar issues, and learn through their experiences? More importantly, isn’t it time the industry gets proactive on this issue before government feels the need to step in? Finally, if the industry’s traditional operating model is no longer sustainable and doesn’t provide the necessary profit margins to succeed, then isn’t it time to change the model?