3 Challenges Restaurants Face in 2023 and How an Education Benefits Program Can Help

For the restaurant industry, the pandemic isn’t over.

According to a recent National Restaurant Association report, more than half of restaurant operators expect another year or more to pass before business conditions return to normal. 

Supply chain challenges are one facet of the problem — in 2021, 96 percent of operators experienced supply delays or shortages of key food or beverage items1

But for most restaurants today, attracting and retaining talent is their number one challenge. How can you optimize talent attraction and retention while preparing for times of further economic uncertainty? Let’s take a look at the current situation.
 

#1 – Restaurants are struggling to recruit and keep talented workers. 

Employee turnover in the restaurant industry has always been high. Customer service jobs are difficult and draining, and tend to attract younger, part-time workers. On the heels of the pandemic, the situation in 2022 was worse than usual, with 3 out of 4 employees planning to leave their job in the next year and 78 percent of restaurant operators saying they do not have enough employees to support customer demand. As a result, restaurants face a critical skills shortage.

It goes without saying that skilled employees are pivotal to providing a great customer experience — and critical to a restaurant’s success. Other industries recognize the strengths of hospitality employees, and are often successful in luring them away from restaurant work, adding to the problem of worker retention.

 

#2 – Insufficient employee training and education impacts retention rates – and the customer experience.

A lack of training and development are significant factors impacting employee turnover. Because many restaurants are understaffed, managers often place workers in critical roles before they’re equipped with the necessary skills. 

The result? The employee is stressed, the customer experience suffers, and the restaurant is more likely to lose the worker to another job opportunity, often in an entirely different industry.
 

#3 – Many restaurants are failing to create an inclusive work environment.

While many companies have integrated diversity, equity and inclusion (DE&I) policies to build a more diverse and inclusive workplace, a recent McKinsey report reveals that only about half of hourly frontline workers think their company’s DE&I policies and programs are effective. 

Frontline workers of color often do not feel included in the workplace, according to the same report, and those who are paid hourly report a lack of fairness in promotions that purport to be based on merit and performance.

 

The Solution: Attract and retain the workforce you need by investing in opportunity for all.

After polling 1,800 U.S. employees in the American Workers Survey Report, Guild found that two thirds of today’s employees want to move into a new role. More than half of them hope it’s at their current company. Frontline workers are far more likely to stay in your organization if they see opportunities to learn new skills, advance to managerial positions, and further their education. That’s why providing tuition-free education benefits is an excellent way to attract the employees you need today while developing the appropriately skilled workforce you’ll need tomorrow.

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Looking for an education benefit program, or ways to optimize your existing efforts can be overwhelming. Tuition reimbursement programs are a traditional choice — but while well-intentioned, they require workers to foot tuition bills up-front, which can make programs both inaccessible and inequitable to many frontline employees. 

The future of work requires a new approach that clears the path for all workers to become learners. Here’s what to look for:

    • Education & Skilling Customization
      Seek out a solution that gives you many customization options – from B.A.s to Bootcamps – to meet your employees where they are today.  A dedicated and experienced support team can help you identify talent gaps and pathways to move talent into priority roles. You can then create a solution aligned with your company’s goals and priority roles.

 

    • Tuition Assistance vs Tuition Reimbursement
      Solutions that take a tuition assistance approach, rather than relying on a reimbursement model, make learning more accessible for every employee — and more strategic for your organization. Interested employees should be able to review and participate in educational opportunities without getting stuck filing paperwork or paying up-front tuition bills.

 

    • Career Pathways
      When a worker can see a clear path to the role they want, they’re much more likely to stay engaged and grow with your business. Look for a solution that helps you deliver career and economic mobility to all employees. By providing paths to career advancement through education, skilling and growth opportunities, you’ll create workforce transformation with your existing, untapped talent.

 

    • High-quality programs and streamlined, personalized experience
      Education benefits that include a wide selection of professional development and degree program options from recognizable, credentialed learning providers will attract ambitious talent to your organization while also empowering existing employees to grow. The best solutions include extra benefits, such as personalized coaching to help ensure your workers have support throughout their learning journey as they identify, pursue, and achieve their educational goals.

 

    • Simplified payment
      To avoid the headache of tuition reimbursement or voucher based systems, look for a solution that facilitates direct payment from employers to learning providers reducing administrative overhead and removing burden from your employees. Guild research has found that when offered a tuition-free program instead of tuition reimbursement, the increase in enrollment was 3X higher for households with a median income below $30k relative to those in households of $50k+. 

     

    Fulfill short-term staffing needs and long-term talent goals with a best-in-class education benefits solution.

    Building a tuition-free education benefits program can help you fill restaurant staffing needs in the short-term — while also helping to bridge skills gaps and create pipelines of diverse talent in the long term. Education and skilling become a competitive advantage that will help your business and your people grow. 

    For example, Chipotle partnered with Guild to launch an education benefits program for hourly employees in 2016. The restaurant chain quickly found that workers who took advantage of the education benefit were more than twice as likely to stay with the company compared to those not engaged with the program. Over time, they expanded their initiatives and found that employees who pursued education benefits stayed at Chipotle longer and were six times more likely to advance into managerial positions.

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    In a highly competitive talent landscape, offering education, skilling and opportunities for career advancement for frontline workers is no longer a “nice to have” but a matter of business survival. Talent will continue to be poached across industry lines as the war for skilled employees wages on. Strategic investments in education benefits, tuition-free program offerings and career mobility are helping today’s restaurant leaders better retain, attract and develop the talent they have today for the success they seek tomorrow.

    Learn more about a Guild partnership here.