The Canadian Restaurant Industry is Facing a Labour Crisis

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According to Bruce McAdams — industry veteran and professor at the University of Guelph — labour shortages have long been a pandemic in the North American foodservice landscape.

“I remember thinking in 2005 that we have issues now like we did in 1985, when I started in this business,” says McAdams. “And if I look back now, we have the same labour issues in 2017 that we had in 2005. There seems to be a pandemic throughout our industry.”

McAdams, who’s worked in the industry for the past 30 years as a chef, waiter, operator and, most recently, a researcher, believes the essence of the labour problem lies in what he’s coined “the transient nature” of foodservice occupations.

“Part of my research study has looked at why labour shortages are an issue in our industry and [one] that never seems to go away,” he says. “Although it changes slightly over time, much of it is rooted in the fact that we’re still seen as a transient occupation in many cases. And our modeling, from a compensation point of view, fosters that transient nature.” In 2017, a young chef who has just finished culinary school can expect to earn an hourly wage of $13. Two years later, that might turn into $14. Unsurprisingly, most chefs become disillusioned with an industry that puts them below the poverty line. They soon abandon the kitchen and earnest new-hires replace them, with the same aspirations the departed chefs once had. The cycle repeats itself, which is half the problem.

In the front-of-house, waiters and servers earn between $25 and $30 per hour, factoring in their tips. Admission into the occupation is easy — there are almost no prerequisites for applying. Serving, therefore, becomes an attractive temporary or supplementary occupation — but rarely a career. Students view it as a way of paying for university; those struggling to make ends meet with their existing jobs take on serving as a second job; and basically anyone looking for some quick cash thinks ‘I’ll become a waiter.’

“When I ask people, ‘have you ever worked as a waiter or a server before?’” McAdams says, the typical responses are, ‘I did it after university, before I got a real job,’ or ‘I did it to put myself through school,’ or ‘I’m a supply teacher and I can’t make ends meet. Serving is quick cash, so I do it on weekends to supplement my real job.’ But this isn’t the case in other parts of the world. “I’ve studied restaurants in France, Italy and Iceland, where you can be a server or a cook and have a mortgage, raise a family and go on vacations,” says McAdams. “You’re a productive and respected member of the community. Whereas, unfortunately, in North America, we don’t view restaurant work in the same way.” Vastly disparate earnings between back-of-house and front-of-house jobs not only create animosity between the two parties but also hurt the foodservice sector by contributing to the transient nature of foodservice occupations. “Many positions in our industry have to be filled two or three times a year for the same job,” says McAdams. “Turnover is 200 to 300 per cent because people stay for four to six months and then you have to bring in someone else and train them. There’s a huge economic cost.”

There are repercussions other than economics. “What also suffers, if you’re continuously short-staffed and continuously turning over people, is your ability to produce a quality food product and quality service,” McAdams points out. “You don’t have enough staff on the floor, and if you do, they’re not quite up to speed yet so they can’t perform to the standard that’s expected.”

THE OPPORTUNITY
As a result, the past couple of years have produced innovative strategies from restaurateurs for improving employee satisfaction and reducing turnover rates. The most popular — and controversial — strategy has been the abolishment of tipping. Restaurants of all sizes have introduced no-tipping policies and replaced the arbitrary practice with a flat-rate service charge, which is then divided equally among the staff. With this practice, operators hope to bridge the gap between front-of-house and back-of-house wages that’s causing talented chefs to leave and mediocre servers to dabble in the industry for the wrong reasons.

This is a good first step, McAdams says, who is a strong advocate of abolishing North America’s tipping culture. “Tipping promotes discrimination,” he adds. “Studies have shown that different ethnicities, genders and age groups tip differently. And guess who knows this? Servers. In many cases, servers go to the table with a predetermined tip amount that they think they’re going to receive and they adjust their service accordingly, focusing on the guests who they believe will give the largest tips.” Tipping, therefore, promotes inequality not just among staff members but also towards guests, causing restaurants across North America to question the efficacy of the practice.

So far, operators who are officially on-board with no-tipping practices include Earls Restaurants — which is experimenting with no-tipping models at its Earls.67 concept restaurant in Calgary — Toronto-based Sidecar restaurant in Little Italy, The Avalon Jazz Lounge in Owen Sound, Ont., Bar Marco in Pittsburgh, Pa. and Dirt Candy in New York. Each operator is striving to replace tipping with its own unique alternative.

At Earls.67, employees from all areas of the restaurant enjoy above minimum-wage salaries as a direct result of removing tipping. The establishment adds a 16 per cent ‘hospitality charge’ to diners’ bills, which is then divided among all hourly staff. “We believe a cook who makes a burger for a guest is equally as important in the experience as the server delivering the burger,” says Craig Blize, VP of Operations at Earls Restaurants. Sidecar has increased the price of menu items by 10 to 20 per cent in order to facilitate its ‘no-tipping’ policy, support its $1-per-hour raise for kitchen staff and maintain the $18-to-$20 hourly wages its servers currently receive. “Not only are people not supposed to tip, it’s not accepted at all,” owner William Sweete says. “We build the cost into the pricing.” He is optimistic the new dining model will provide staff with more financial security and a consistent income.

But, according to McAdams, in order to fix labour issues permanently, expectations from all sectors must change, “because we simply can’t afford to look at the hospitality industry as we are doing today and have been for decades. The industry has been complacent to its own misconceptions and it’s time now that it reevaluated itself.”

If we are to create a hospitality industry that’s as effective as that of Europe’s, he says, “we need to analyze the foundation that it currently rests upon and seek to answer some very difficult questions. We need to ask ourselves, ‘what are the causes of this continuous problem that has been an anchor around our industry and around our own individual businesses?’ They’re holding us back. It’s time to move forward, towards solving them.”

Volume 49, Number 12
Written By Eric Alister

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