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Worries about the pandemic, slow business, and fewer jobs for servers are all creating obstacles to rehiring
When the COVID-19 pandemic forced one Miami restaurant to shut its doors in mid-March, its management laid off 47 of their 55 employees. Expecting the worst, they were surprised to realize at the end of May that they were doing so much business through takeout and delivery that they were on track to meet their original sales predictions. And yet more business didn’t translate to more staff: The 200-seat restaurant still employed fewer than half the workers it had before the pandemic.
While the city of Miami has allowed restaurants to operate their dining rooms at half capacity since May 27, this particular spot is remaining closed for dine-in service until its owners can offer their customers a more “on-brand” dining experience — meaning fun and easygoing — rather than a modified, cautious night out. As such, there is no work available for bartenders and servers.
The restaurant’s general manager, who asked that both her name and that of the restaurant remain anonymous because of the sensitivity surrounding hiring practices, says she’s able to offer these still-unemployed workers little more than daily check-ins and free food. She knows that other, fully reopened restaurants might end up offering them the jobs she cannot. “I found a lot of loyalty in the team we were able to build here,” she says. “Hopefully, we get them back.”
After the pandemic shut down dine-in service around the country in March, some 6 million restaurant industry workers lost their jobs. But as reopening gets underway, those 6 million people are not necessarily returning to work. Instead, many restaurants are facing significant obstacles to both rehiring existing workers and searching for new ones.
Many small, independent spots don’t yet have enough work to bring back their employees, particularly those in front-of-house positions. And restaurants that thrived doing only takeout and delivery — often chains with more than one location — are now increasing their staff, only to find that workers aren’t returning for a variety of reasons. Some are staying away because of health concerns or caretaking responsibilities; others are reluctant to resume minimum-wage, now possibly unsafe jobs that don’t pay as well as the combined income provided by their state unemployment benefits and the federal government’s weekly $600 Pandemic Unemployment Assistance check. Because of the extra federal assistance, two-thirds of eligible workers are making more than they did before the pandemic, according to a paper by economists at the University of Chicago.
Meanwhile, some restaurants are stuck in a catch-22 created by the Small Business Administration’s Paycheck Protection Program. PPP loans turn into grants if they cover payroll or other specific expenses, but in order to have the loan forgiven, restaurants must rehire their employees, and many don’t have work for rehired employees to do.
Underlying the complex calculations around rehiring is demand, or lack thereof. “Restaurant employment will rebound slowly because demand will be far lower than normal, likely at 40 percent of normal,” says Andrew Stettner, an economist at the Century Foundation. But fears that recovery will be stymied by employees who choose to remain out of work are unfounded, he adds: “The pace of recovery will absolutely be driven by the level of demand, not unemployment benefits.”
The level of demand directly correlates with the pace of recovery at Xperience Restaurant Group (XRG), which operates a national chain of Mexican restaurants under nine brands, including El Torito, Las Brisas, and Chevys Fresh Mex. After the pandemic hit, XRG furloughed 80 percent of its employees. Those who remained helped its restaurants pivot quickly to takeout and delivery. As a result, the group’s takeout business more than doubled compared to last April, and it soon found itself trying to rehire a number of its employees. Between April 20 and June 1, the XRG career site posted more than 500 jobs; some were new positions, and some were vacancies left by former employees.
“We have already brought the bulk of those [furloughed] team members back, even at units that haven’t yet been cleared to reopen for dine-in business,” says Rosie Davenport, XRG’s vice president of marketing. But other employees have chosen not to return because of concerns about their health, she adds.
In Chicago, Michael Schultz, who runs the Fairgrounds Coffee chain and the hospitality group Infuse, says he has been “getting a lot of applicants, very talented people who typically otherwise wouldn’t be available.” As iconic restaurant groups have shuttered, he explains, “people who’ve planted their roots with them for successful careers — now they’re looking.” Although a few of his company’s employees told him they were making more money out of work, Schultz felt his applicant pool was big enough that he did not worry about replacing them. He is now hiring for 17 positions at Fairgrounds locations in Chicago, Milwaukee, and Los Angeles, including team leads, prep cooks, and certified baristas.
Down in Nashville, Mary Pillow Thompson, the founder of the local restaurant hiring platform Foh&boh, has seen a similar movement. “There will be a lot of shifting around,” she says. “People saying, ‘Well, Jimmy wasn’t that great anyway, I’m happy to try to get someone better.’ And on the other side, candidates saying, ‘I’m going to try to get the job I always wanted instead of going back to my old place.’” Thompson has also noticed former truck drivers and construction workers signing up on her platform to look for jobs. “Before this, the people we were getting were industry professionals,” she says.
Unlike XRG and Fairgrounds, many American restaurants, especially smaller ones, did not enjoy a surprise business boom during the pandemic. And so as their states and cities reopen, their goal is simply to bring back enough former employees to support the level of business they’re able to do. But even that is not a straightforward process, given that they often lack human resources departments that can spearhead substantial hiring efforts.
At the Kansas City restaurant Fox and Pearl, chef Vaughn Good and his partner Kristine Hull had to furlough three-quarters of their 50 employees in March. Although the 130-seat bistro, which had previously made $10,000 a night, pivoted to selling groceries, family-style meals, and alcohol for pickup, “we were not busy,” says Good; sales sank to $1,000 a day. Good and Hull applied for a Paycheck Protection Program loan to cover payroll when business picked up.
Things began to turn around after May 11, when Missouri restaurants were allowed to reopen their dining rooms under new safety regulations; on a recent Saturday, Fox and Pearl did 70 covers. That was enough for Good to rehire all the kitchen staff who wanted to return. But for Hull, who runs the front of house, scheduling servers has been harder than bringing back cooks, in part because of health concerns around interacting with diners.
“I didn’t want to force people,” she says. So far, enough servers have asked for the shifts Hull has needed to fill, even as the restaurant has expanded to half capacity per Kansas City guidelines and sales have followed suit, rising to 50 percent of the restaurant’s typical pre-pandemic revenues. The next phase, which Hull hopes will go into effect on July 5, would allow her to bring back everyone who wants to return, but she knows she may have to look for new hires. “Some of my staff has decided during the quarantine period to do other things,” Hull explains. “We have a couple that graduated college and are now pursuing careers, and some that have decided to shift their focus. I think that the slow reopening has allowed folks to make the decisions that work best for them both physically and financially.”
Even restaurant owners who appear busy say that they would rather make do with a smaller crew until they have a clearer idea of what the future holds. Since reopening under Florida state guidelines on May 13, Cafe Boulud Palm Beach, which is located in the Brazilian Court Hotel, has seen business in its main dining room jump back to the same level as it was this time last year. The restaurant seats about 120, and half of the tables are outside. General manager Lucian Vasile Puscasu has brought back about half of his 102 front- and back-of-house employees, a mix of part-time and full-time workers. That’s partly because the once-busy events business remains closed, and partly because summer is the off-season in Palm Beach. But it’s also because some employees did not want to come back.
“They declined to return for various reasons,” Puscasu says, “from finding better opportunities to not feeling comfortable about the possibility of exposing themselves or finding the unemployment benefit a better fit for now.” He expects to see more potential workers applying in the fall, after the pandemic unemployment benefits run out in July and the season starts up again.
For her part, Fox and Pearl’s Hull says she noticed a shift in conversation on the restaurant’s Slack (or chat room) channel at the beginning of June: Those who had felt unsure about returning to work last month seemed more eager for shifts in June. “A lot of people who were waiting through May are now saying they are ready if we need them,” Hull says.
Of course, legal frameworks also play a significant role in how people are brought back to work. If a restaurant doesn’t want to hire everyone back, they have to have “legitimate, non-discriminatory (and documented) reasons for why some folks were made offers and others weren’t,” hospitality attorney Jasmine Moy says over email. “For those that reject an offer to return to work, if the employer wants to include that person in their PPP headcount, they have to notify the state that such person was made and rejected an offer of employment, which will put the staff member in violation of the unemployment insurance requirements.”
Rejecting employment reflects the larger issue that many workers face as restaurants reopen: that of the calculus of staying home without pay versus returning to work and potentially risking their health. All the restaurants operators mentioned in this article say they are following regional safety guidelines to keep their employees healthy, including generous spacing between tables, rigorous cleaning practices, and the requirement that all employees and customers alike wear a mask. In addition, Fox and Pearl, Cafe Boulud, Fairgrounds, and the Miami restaurant are all providing masks to their employees. But regardless of the measures they’re taking, these operators also realize they can’t guarantee their employees won’t get sick if they return to work, which is why many say they understand the hesitation to take on shifts.
It remains to be seen whether post-COVID-19 restaurants will offer workers, especially servers, bartenders, and hosts, enough incentive to encourage loyalty to the industry. If front-of-house hospitality employees can’t find worthwhile work — meaning the opportunity to interact with customers and earn sufficient wages from both salary and tips, all while staying as safe as possible — there will likely be a reckoning.
“People have reprioritized their lives a lot,” says the Miami general manager who’s waiting to reopen until she has a better sense of the city’s new dining climate. “Right now we feel like a fulfillment center: You put the food in the bag and send it out the door.” If that continues to be the case, she adds, “then you have to find meaning in that new model. We’re in it because you provide a meaningful experience to your guests, and we have to see how we’ll do that going forward.”
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