Turns out, getting a restaurant off the ground is kind of hard. But the universal complaint from small business owners isn’t actually the starting up part—it’s the ongoing issue of staffing.
And hiring minimum wage employees, especially in pricey cities like San Francisco, is especially hard.
Before starting my own food service business, I spent a lot of time meeting owners and restaurateurs who were willing to share their stories. Since staffing seemed to be a problem area for every person I spoke with, it became clear I needed a hiring strategy for my new business.
I started Powder, a San Francisco-based dessert business, back in 2015. But before devising a hiring strategy, I needed to really understand what business owners meant when they said, “Staffing is my biggest challenge.”
Simple time tracking that syncs with payroll.
The top complaints from business owners who employ hourly employees
Complaint #1: Finding quality candidates is expensive and takes time
Restaurant owners spend (and waste) a significant amount of time looking for hourly employees.
There are various startups that are trying to help solve the sourcing issue for restaurants specifically:
But often times, owners don’t want to or can’t afford to spend additional dollars to leverage those tools. Therefore, they resort to Craigslist.
(Note: This is an extremely simplified version of the law of supply and demand.) The graph above shows that in a city with more available workers, wages tend to be lower, which makes it less expensive to hire employees. In a city with a smaller supply of workers, like San Francisco, wages go up, which makes hiring more costly.
Complaint #2: Getting candidates to show up for interviews is actually a big milestone
Once you’ve found a candidate you like, there’s still a chance that they will no-show for their interview. If they’re qualified and do show up on time, then you need to act quick!
In markets like San Francisco, a good candidate isn’t available for long as there are so many businesses drawing from the same pool of minimum wage staff.
Complaint #3: Ramping new hires is expensive
It’s very rare that you can throw someone new into a position and enable them to perform the job during their very first shift. So that means that during a new hire’s ramp period, owners either:
- Double-up on staff for a new hire’s shifts to have a veteran assist with training, or
- Save the payroll expense by performing the training themselves, eating up the owners’ time that could be spent on higher-value work.
Complaint #4: “Call outs” create recurring fire drills
No matter your job, “life things” inevitably get in the way.
The challenge with retail employees is that their work requires being physically present at a job site. There’s no “work from home” when you’re a barista or baker or cashier.
So when an employee “calls out” last minute (which is industry lingo for when an employee calls in sick), owners are left scrambling to make sure the shift is covered.
A last-minute scheduling change can be extremely stressful for the employee asked to work—and expensive for the owner, since it may mean that the employee is working overtime.
And unless another staff member is willing and available to pick up an extra shift, the end result is either:
- The shift is short-staffed and therefore the customer experience suffers, or
- The business owner covers the shift
In markets like San Francisco where businesses are desperate for good employees, employees experience a decent amount of job security due to Complaints #1 and #2. Therefore, they can take advantage of the option to “call out.”
Complaint #5: Turnover is high
Based on my experience, most San Francisco restaurant owners hire staff knowing tenure will likely be six to nine months—but hoping for at least a year.
In my opinion, there are two industry factors that contribute to high employee turnover.
The path to promotion isn’t always there
With these types of retail jobs, people are hired to perform a very specific duty. The business needs you to do X and only X, so there isn’t necessarily a path to promotion.
That’s not to say that promotion is impossible, but the business may not need an employee to take on more responsibility at a higher wage. I’ve often found that some people take jobs they’re not excited about, in the hopes that it leads to something else.
At Powder, we tried to hire employees who were good with customer engagements and mopping and everything in-between. The thing is, it didn’t always work out.
For example, we hired someone who said they were fine with cashiering and working with customers, but in reality, they were terrified. This made them an ineffective hire because they couldn’t perform all aspects of the job.
There aren’t enough minimum wage workers
The second factor is that there’s a major labor supply-demand inefficiency in cities like San Francisco. There’s an overwhelming demand for minimum wage work and not nearly enough local workers to satisfy it.
Therefore, if an employee doesn’t like their boss or a co-worker, or is just bored of doing the same tasks, they can quit and quite easily find another gig. Or they might just get poached by another business.
Staff leave for any number of reasons, many of which out of the control of the business owner.
The greatest lesson from my experience owning a food service business is that the problem of staffing isn’t something you solve for once. You will experience it every day.
And you’ll also learn how to firefight it every day.
How to define your staffing strategy
With all those complaints, I’d been given a lot to think about as I started to define Powder’s hiring strategy. But I knew there was a way to do this.
Here’s how to copy my approach for hiring minimum wage employees.
Step 1: Write down the labor factors that will make or break your business
These should be the things that impact your profit and loss statement and influence your ability to attract and retain employees.
These are some of the factors I considered for Powder:
- A path to promotion: What can my business afford in terms of promotion paths when the starting point is $15.00 per hour (the San Francisco minimum wage)?
- Seasonal availability: Our business will be seasonal and therefore labor needs will be seasonal as well.
- Training: The technical skills required to make shaved snow are new to the market and will have to be taught by us to every employee, regardless of food service experience.
- Role flexibility: Our staff needs to be able to do all functions in the restaurant—work the cash register, make the shaved snow, and clean up.
Step 2: Take that list and go back to the reason you exist
Ask yourself this:
What are your goals as a business?
When I started Powder, one of my goals was to establish our retail location as a gathering spot for friends and family to meet, make new memories, and enjoy a little guilt-free indulgence. Whether you’re having a bad day or you’re in a celebratory mood, you should come into our store and expect to be greeted by friendly staff.
Our second goal was to educate the market about the shaved snow we were bringing to town. To accomplish this, it would mean spending significant time with each customer and explaining what we do and why we do it… repeatedly. The first question every passerby would ask is: “What is this?” It happened thousands of times.
Unlike a coffee shop or a bakery, where customers can see what they want from a menu, our guests first need to understand what shaved snow even is—and we couldn’t do samples.
I had to determine what kind of employee would best help us accomplish these two goals in conjunction with all our other considerations.
Step 3: Create different employee profiles—and weigh their pros and cons
In the “Description” column, describe the type of person you might hire and how that will solve for some of the factors you listed above—or not.
|A||Experienced, full-time food service staff||– Brings standard restaurant “know-how” ||– If all hires are full-time, then covering call-outs can be very difficult|
– Career food service employees often lack energy that novice employees bring to a new job
– Experienced staff may have to “unlearn” bad habits they’ve developed
|B||Inexperienced but malleable new part-time hires||– Brings enthusiasm and energy to a challenging job|
– Willingness to learn skills
– Part-time employees allow for more flexible scheduling
|– Little to no experience means significant upfront training|
– Novice employees aren’t the most reliable
– Student employees take significant holiday breaks
After a thoughtful review of the pros and cons of each type of employee, we decided that going with an inexperienced, more malleable employee would help us accomplish our two goals:
- Create a young, fun, and inviting environment, and
- Spend quality time educating our customers
The profiles helped me figure out where to find each candidate. So for the inexperienced employees (Option B), we opted for a local university. For the full-time experienced staff (Option A), it ended up being me, but a staffing agency would’ve also helped us.
Problem solved? Not quite
We still experienced all the same complaints that every other small business owner went through. Staffing has its problems no matter what kind of hiring strategy you roll out.
Since we had hired a lot of college students from a nearby university, coverage during the holidays was incredibly challenging for us. Most of our staff asked for the same, extended time off during the school year (Thanksgiving, winter break, and spring break).
The arrival of each summer meant finding, hiring, and training new temporary staff who only wanted summer employment. And summer was the height of our seasonality. It was a vicious and constant cycle.
With that said, we were able to use our employee profiles to build the in-store experience we wanted and evangelize our product. And most importantly, we were able to create a fun and positive company culture for our staff, which greatly helped with retention.
We found that if staff enjoyed their co-workers and their environment, their willingness to stay and do the work was vastly improved. In fact, our most senior employee was with us for over two years!
The lesson from my story is that no matter how much research or planning you do, you can’t “strategize” your way out of staffing problems. But it can help you better prepare.
Hopefully after reading this post, you’ll be able to successfully hire the employees your business needs—all while keeping your eyes wide open, ready to roll through whatever challenges come your way.