Restaurants have long been known for high employee turnover, but their struggles to find and retain workers in the Bay Area have grown along with the cost to live here.
The proliferation of businesses that compete for good employees has contributed to the problem, as has the increasing discrepancy between wage growth and living costs that prompts low-wage workers to shop for the best pay or leave the area altogether.
In its “state of the industry” report, the Golden Gate Restaurant Association said “there’s an overall shortage of actual people to employ,” and pointed to record growth of restaurants in the Bay Area.
For Robert and Kristen Ferreira, who own Ascona Pizza Company, the past several years have presented a challenge in keeping all three locations of their restaurant — in Danville, San Ramon and Pleasanton — fully staffed.
“Everyone is going through it,” Robert Ferreira said, citing the slew of “We’re hiring” signs on storefronts and restaurants around the Bay Area.
His family has found a solution in making the application process easier, by way of an online product developed by his son and daughter-in-law, Philip and Crystal Ferreira. The website, WebCorp.com, provides an online application for employees and an applicant-tracking system for the employer.
The appeal for employees, Philip Ferreira said, is that it provides a simpler and more comfortable way to apply than the traditional process of finding a convenient time to walk into a restaurant or retail business, ask for an application and prepare a resume. The streamlined online process particularly appeals to the young workers that Ascona attracts, he said, and for employers, the platform is an easy way to manage applications.
At a time when any edge over the competition in hiring employees is beneficial, the Ferreira family calls WebCorp.com a success, having been able to hire the 30 employees it needed in about 45 days, with a surplus of applicants. But the family-run business is using other tactics to attract and keep employees, like offering solid training programs to capture the segments of potential applicants who have no restaurant experience.
That’s something restaurants are trying out across the region in an effort to capture a broader pool of applicants, including those who might be new to the industry. And groups like the Golden Gate Restaurant Association and Restaurant Opportunities Center United, for example, have offered worker training programs to help train the entry-level restaurant workforce.
Restaurants are competing not just with other eateries but other industries entirely for employees. Craig Stoll, who owns Pizzeria Delfina in Palo Alto, Burlingame and San Francisco, said that particularly on the Peninsula and in the South Bay, restaurants are competing with corporate campuses that can employ kitchen staff for better pay with better schedules.
It’s been a struggle, Stoll said, to find experienced kitchen staff and servers in a region where the costs of living are high compared with the prevailing wages of the restaurant industry.
“What workers need to stay in jobs is strong wages and having stable and affordable housing,” said Jenny Lin, deputy director for the East Bay Alliance for a Sustainable Economy (EBASE).
Even as California moves to roll out its new $15-per-hour minimum wage, the high cost of rent prevents that from being a livable wage, many argue. That hourly wage, which equals roughly $2,400 per month, barely covers the average rent for a studio apartment in the nine-county Bay Area, which is $2,120 per month, according to Novato-based firm RealFacts.
The struggle is most apparent for kitchen workers who don’t get additional funds from tips.
Andrew Hoffman, an operating partner at Berkeley restaurants Comal and The Advocate, said his restaurant group has tried to alleviate the wage gap between kitchen staff and front-of-house, tipped workers by eliminating tips altogether. Instead, the restaurants implemented a service charge on diners’ tabs that they have used to increase wages across the restaurant.
While line cooks “aren’t getting rich” at either restaurant, the ability to raise wages even a little bit is appealing to workers, Hoffman said.
But service charges haven’t worked for everyone, and some servers in particular are resistant to the idea of working at a restaurant without cash tips, Hoffman said. Still, many like the stability of the pay, he explained, and the restaurants try to offer career growth and promotions to their workers in an effort to retain them.
A simple solution might be to raise menu prices and thus raise wages to attract good restaurant talent, but in a region where restaurants are plentiful and competition is fierce, raising prices beyond competitors could spell the death of a restaurant.
“Raising prices doesn’t mean that sales and profits go up,” Hoffman said. “It’s wrong, but anybody who tries to change it overnight will go out of business. If we could pay line cooks $30 an hour, we would.”
It’s in the interest of restaurants and retail businesses to find solutions. The cost of employee turnover is $2,004 per hourly restaurant employee, according to restaurant research firm TDn2K, and a recent survey from the firm shows most restaurant companies across the country consider finding enough qualified employees to be their most pressing concern in 2016.
Jon Swanson, president of Moana Restaurant Group, which manages restaurants across the Bay Area, said the industry experienced the same challenge in the dot-com boom of the late 1990s. As living costs increased and the strong economy fueled a restaurant boom, it was impossible to keep them fully staffed.
The implication for the Bay Area is the threat of a region with high inequality between rich and poor, which destabilizes the economy, EBASE’s Lin said.
“If we aren’t able to engage in this issue to find solutions and create the economy that we need in terms of housing, wages, transportation, it’s going to lead to this situation with people leaving (the Bay Area),” Lin said.
Contact Annie Sciacca at 925-943-8073. Follow her at Twitter.com/AnnieSciacca.