Where the workers aren’t

Worker shortage affects local restaurants

Posted on Jul 31, 2018 :: Insight Insider
Sharon Verbeten
Posted by , Insight on Business Staff Writer

It’s been a couple of tough months for locally owned eateries in Northeast Wisconsin.

In May, Mary’s Family Restaurant in Appleton closed its south-side location, while Cinder’s Restaurant in Appleton decided to close on Sundays. And in Oshkosh, the iconic Ardy and Ed’s Drive-In closed for two days.

The closings weren’t due to a lack of food or customers. Rather, these businesses were short on staff — a growing problem among local businesses, especially restaurants, in Northeast Wisconsin. The employee shortage is not new, and with unemployment levels hovering near or at record lows, restaurant owners do not predict changes anytime soon. And without enough employees, they need to cut back or risk being unable to provide their customers with the good food and customer service they’ve come to expect.

Ardy and Ed’s co-owner Steve Davis agrees it’s “a challenge that the industry faces (especially) if you’re looking at hiring students … the kids don’t want to work nights or weekends; there isn’t the pressure from home” for kids to get jobs.

“It’s somewhat a generational thing, but we’re also seeing it with the working population in general.”

As many baby boomers retire, “it reduces the number (of workers),” says Jim Golembeski, executive director of the Bay Area Workforce Development Board. That opens possibilities in other industries for workers who may have previously worked at restaurants or for retailers.

This issue is not unique to the New North.

“It’s absolutely statewide; in fact, it’s nationally. Every sector is struggling finding good people … restaurants, construction, everything,” says Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association.

With the low unemployment rate, “everybody’s fighting for the same workers,” Hillmer says. In addition, restaurant margins are so thin, increasing wages is not an option for many — especially seasonal ones like Ardy and Ed’s.

Davis says he usually has about 25 employees return each year, but “the last three years is where we really started to see the challenges. We were always proud of the quality of people we could hire, and they were pretty loyal to us.”

Loyalty, however, is another generational change employers are seeing. Today’s younger workers — Generation Y (aka the millennials) or Generation Z — have different values than their parents, says Anthony Snyder, CEO of the Fox Valley Workforce Development Board.

“While pay and benefits are always going to be a factor, it seems to me that a younger worker seeks an employer that shares the values and culture of the job seeker,” says Snyder, adding younger workers may seek more freedoms, such as flexible hours, work-life balance and the ability to volunteer during the day.

“If the employer can’t deliver more than just a paycheck, Generation Y seems to be passing on those companies,” Snyder says. “I’ve known Generation Y workers (ages 20-35) who would rather be unemployed than work for an employer who didn’t share their values.”

That’s a viewpoint perhaps older generations didn’t share.

 

Where are they working?

If the younger generation isn’t working in entry-level retail, restaurant and other service jobs — jobs typically filled by this demographic — where are they working?

“Today, I know teenagers who are making their money on the so-called ‘gig’ economy — one selling high-end collectible tennis shoes on eBay and another putting all his energy into his YouTube videos,” Snyder says. “It seems to me that a young person may want to be the CEO of his own online store or YouTube empire versus an eight-hour shift at the mall.”

It’s a point worth considering.

“Younger people are more entrepreneurial and certainly more internet savvy than previous generations. Twenty-five years ago, starting your own business at age 16 was little more than a lemonade stand or a paper route,” Snyder says. “Today, young people form their own foundations or seek to change the world through crowdsourcing. A job is the last thing they’re thinking about.”

Also, in the past, a low-skilled worker may have been lucky to find a role in a restaurant or retail environment. However, Snyder says, “today, with all our employers facing an inability to find decent labor, they’re far more willing to welcome a lower-skilled worker with a good work ethic into something more than minimum wage.”

That means a potential worker for a mom-and-pop restaurant paying $8 or $9 an hour might instead seek an $11 or $12 entry-level manufacturing role.

“People are skipping that first job we all had and moving right into something more professional,” Snyder adds.

In part, that’s because with lots of college debt, getting a minimum wage job won’t pay the bills, says Golembeski, adding that millennials also tend to be more mobile, not necessarily staying in the area where they were raised.

All these factors combined create a fierce cycle for local businesses just looking to survive. Davis points to a change in not just the quantity of applicants, but quality as well.

“I think there’s been a change in how people are raised,” he says. “There’s a huge change in how they act. It’s just a total change in their mindset in responsibility.”

Fortunately, Davis’ restaurant reopened after a few days this past spring after hosting an impromptu job fair in May that brought about a dozen applicants.

“Our livelihood is based on the fact that you can get people to come to work for you,” Davis says. “It’s kind of scary.”

 

Expanding the pool of workers

What do you do when your “go-to” pool of potential workers — teens and college students — dries up?

“It creates challenges on the business side. You have to be creative when you’re looking for staff,” says Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association.

She recommends searching beyond traditional avenues, such as posting jobs on social media or using referral programs with existing employees.

Anthony Snyder, CEO of the Fox Valley Workforce Development Board, says employers need to expand their pool of job candidates.

“The local workforce boards, as well as several state agencies, have a huge pool of potential candidates that could be a great fit if employers are willing to be more flexible and more open,” he says.

Snyder offers a few areas where businesses may find additional workers:

The formerly incarcerated.  Someone with a history of incarceration continues to have a tougher time finding a role than most. He estimates 8,000 to 9,000 inmates are released from Wisconsin prisons each year. “One of the best ways to keep them from reoffending and solve many employers’ labor issues would be looking for ways to integrate these employees into your business.”

Older workers. “From a workforce development perspective, we consider this age 55 and above. We have many older workers who want to work and stay active, but they aren’t interested in full time or mandatory overtime. Sometimes, they face physical limitations that may not allow them to stand for long periods of time or lift exceptionally heavy items. Is there a way for a service establishment to take one full-time role and break it up into two to three part-time positions that might work with this age group?”

The former stay-at-home parent. “If a mom or dad stayed home to raise a family, they’ve likely allowed a 15-year (or longer) gap to appear in their resumé. Can an employer look beyond this gap to bring these individuals back into the workforce?”

Individuals with disabilities. “Our area has an amazing team of individuals who work with those experiencing a wide range of disabilities. With some simple accommodations, a person with a disability and a strong desire to work could be an excellent addition to your team.”