Like nearly everyone in the restaurant industry, Jessica Ann Tyson has dealt with a barrage of challenges throughout the course of the last 15 months.
Tyson is the owner of The Candied Yam LLC in Grand Rapids, a fast-casual establishment at 2305 44th St. SE that serves southern cuisine via limited dine-in and takeout services.
As pandemic mitigation restrictions have continued to loosen statewide, Tyson’s latest dilemma hinges on scrounging for employees and piecing together some semblance of a fully-staffed workforce.
“I can either look at this like a lemon or lemonade,” Tyson said. “I’m choosing lemonade, but I have some tequila in mine just to get me through.”
It’s no wonder that Tyson and her fellow restaurateurs are reaching for a stiff drink, as establishments of all shapes and sizes, from fast-food chain restaurants to locally-owned establishments, grapple with trying to operate amid a dearth of willing talent.
The Candied Yam considers 15 employees to be a full staff, but right now, Tyson’s team is just five employees. That includes Tyson regularly involving herself in day-to-day operations.
Many pundits and industry watchers point to the extended benefits available to the 700,000 unemployed workers in Michigan as keeping prospects on the sidelines rather than taking available jobs, whether in the foodservice sector or other industries.
Unemployed people in Michigan currently receive an additional $300 per week as part of the federal American Rescue Plan, a measure that some states are starting to roll back as the country lifts out of the pandemic.
However, the restaurant industry’s labor issues have seemingly deeper roots, according to industry sources. When restaurants faced shutdowns statewide early in the pandemic, many establishments shed large portions of their workforce. Some of those displaced workers have been apprehensive about returning for health reasons or have encountered conflicts tied to available childcare.
Searching for a solution
Against a chorus of people advocating the solution is to pay workers more, Tyson argues the answer is not that simple, especially as restaurants simultaneously deal with soaring food costs.
According to the most recent data from the National Restaurant Association, wholesale food prices increased for four consecutive months as of April, with “significant” month-to-month gains in beef (14.5 percent), pork (9.6 percent), fresh fruits and melons (9.3 percent), processed poultry (5.4 percent), and dairy products (3.2 percent).
As a result of the ongoing trends, average wholesale food prices increased 6.9 percent year-over-year as of April, according to the trade group.
The increased prices coupled with the labor shortage are forcing some restaurant owners to make difficult decisions.
“My food costs, they’re not sustainable,” Tyson said. “Some days, I’m choosing between more chicken wings and more pay for my people. It’s a hard call, but someone has to make it. I feel like everything is spiraling and spinning in different ways. … You just want to make sure you can balance it out each day whatever comes your way.”
The Candied Yam pays between $11 and $15 an hour and spreads tips around its workforce.
At one point, the restaurant offered a $250 signing bonus in an attempt to lure prospects, but received no engagement from the effort.
The ongoing staffing shortage has forced Tyson to invest a few thousand dollars to reimagine her restaurant’s service model.
“For us, people come in, place their order and the ticket goes back and we make your order fresh,” Tyson said. “We’re looking at two-hour waits because we don’t have a staff. God bless our customers that do wait that long, but the majority of the customers are looking at you like ‘You better get your life.’ I have to remind them we’re making this stuff from scratch.”
Tyson plans to prepare batches and offer cafeteria-style service so that customers can see which food is available on a given day.
New businesses struggle to staff
As the CEO of Short’s Brewing Co. and the new owner of a recently reopened pizzeria and ice cream shop, Scott Newman-Bale has a perspective that runs the gamut of the restaurant industry.
While Bellaire-based Short’s Brewing is equipped with a staff of around 150 people, Jac’s Parlor has attracted about 20 employees in the couple of weeks since it reopened and could use 10 more workers, said Newman-Bale, who recently purchased the 60-seat restaurant located down the road from Short’s main production facility in Elk Rapids.
Newman-Bale has been able to hire teenagers to scoop ice cream at Jac’s, but has encountered a tougher time staffing the kitchen.
“In the kitchen, it’s different — we’re struggling like everyone else,” he said. “I think it’s a little hard being a new business. … It’s a battle for every person.”
The staffing success for Short’s can be attributed in part to an attractive benefits package that includes a 401(k), sick and vacation time and education bonuses. In an area heavily reliant on tourism where seasonal work dominates, Short’s also stands out because it provides year-round employment.
Still, the company has been challenged to compete against the enhanced unemployment benefits, according to Newman-Bale, who said that a number of past employees have cited the additional funds as the reason they are not yet returning to work.
“Comments like that are very frequent, and that’s blatant comments and (doesn’t account for people) who are thinking it. It’s definitely clear that it’s having an impact. … I think it’s part of the problem, but it’s also a restaurant problem. Not for Short’s, but I think the industry is seen as an up-and-down industry. These are tough positions, especially in the back of the house.”
Benefits to blame?
On May 30, Michigan will reinstate a measure that forces unemployed workers to prove that they are searching for a job, a move that critics of the extended benefits have applauded. However, some national studies have been unable to establish a link between the increased unemployment benefits and the population’s refusal to work.
In a report titled “Employment Effects of Unemployment Insurance Generosity During the Pandemic,” researchers on behalf of Yale University compared employment trends between states with and without generous unemployment benefits.
The study showed that states with more robust benefits did not see a sharper increase in unemployment and its workforce returned to jobs at the same rate when it was deemed safe.
Even so, Jeff Lobdell, owner of Grand Rapids-based Restaurant Partners Inc., said that unemployment benefits coupled with various rounds of stimulus money are the source of the industry’s labor woes.
“The primary problem for restaurants — and I would say any small business — is the stimulus that our government has put forth that incentivizes them not to go to work,” said Lobdell, whose portfolio includes 20 restaurants. “How can small businesses compete with our government that simply prints money?”
Lobdell has increased wages by 20 percent to 25 percent, but the effort generated little movement. His company also offers pandemic pay for line cooks ($1 per hour extra), guarantees managers 50 percent of their annual bonus and provides free meals for workers.
According to Lobdell, potential restaurant workers are simply making a logical decision given the conditions.
“I’m not blaming the workforce as being disingenuous or lazy. They’re simply making a logical choice to continue to get the stimulus as opposed to going back to work,” he said. “I don’t think you can fault them for that.”
News coverage in the food/agribusiness section of MiBiz is made possible by advertising support from Dan Vos Construction Company. Dan Vos Construction strives to serve people and to enhance life, while maintaining long-term relationships with customers, sub-contractors and employees. This advertisement has no effect on editorial consideration in MiBiz.