Is the Labor Shortage a Wage Shortage?

COVID-19 has transformed the restaurant industry in so many ways, from shutdowns to supply chain issues to accelerating the move to off premise dining. Now we are in the middle of The Great Resignation, which saw record numbers of Americans quitting their jobs.

These resignations, 4.5 million Americans in November 2021, ultimately have seen 3% of the workforce quit their jobs, with that figure estimated to be double in hospitality. Hospitality is the lowest-paid industry, and many employees saw opportunity in the workforce disruption to move to higher paying jobs in other industries.

It may be that restaurants are not facing a shortage in labor, but a shortfall in wages necessary to keep employees at a time of high disruption. However, in an industry notorious for thin margins, how are operators supposed to compete?

Restaurants must focus on better managing controllable costs, including food and labor, to increase their margins and stay competitive with increased wages. Restaurant…