Staffing shortages have caused restaurants to pull back on operating hours and reallocate funds to pay employees more than pre-pandemic levels, which is squeezing general and administrative expenses. Fifty-one percent of business owners said they’re paying employees more than they did during COVID-19, according to Alignable’s May rent report. Even with pay increases, restaurants continue to struggle filling positions.
Although foodservice and drinking establishments gained 186,000 jobs in May, according to the U.S. Bureau of Labor Statistics, restaurants are still 1.5 million — or 12% — below pre-pandemic employment levels. This is a particular challenge as the industry is showing strong signs of sales recovery. Yelp, for example, recorded its largest number of seated diners ever in May, surpassing pre-pandemic highs, while industry sales are just 2% below February 2020 levels.
The Alignable report shows that 71% of restaurant owners believe withholding the extra $300 unemployment benefit, as 25 states have already done, will correct labor shortages and likely expedite recovery.