Help wanted: Restaurants need workers pronto

Pam Patton wants to expand her popular Southern-inspired Patton's Restaurant to a second site in metro Des Moines. The problem is she can barely find enough qualified workers to run her east-side restaurant, let alone start another.

An improving economy and an unemployment rate hovering around 3½ percent (the lowest rate since 2001) have left Patton and a growing number of restaurateurs struggling to fully staff their businesses.

But there's another reason so many are posting "Help Wanted" signs: Rising competition from nontraditional eateries such as Hy-Vee restaurants and convenience store food counters are luring away more prospective workers — a lot more.

“We are all suffering,” Patton said of the lack of food service workers. “I think it’s hitting smaller businesses like mine harder.”

While Iowans' appetite for conventional restaurants has not diminished, busy consumers increasingly are looking to grocery stores, convenience stores and snack bars, which are upping the ante by offering more options for breakfast, lunch and dinner.

"I think more and more people are competing for the talent that was traditionally part of the restaurant industry," said Jessica Dunker, president and CEO of the Iowa Restaurant Association.

Patton, who serves an award-winning menu of fried chicken, collard greens and red beans and rice, has trimmed her menu and closed her restaurant Mondays through Wednesdays because she can't find enough qualified cooks, servers and managers.

She has trained several new workers — only to see them leave for jobs at Hy-Vee and its attractivebenefits package.

"It’s Hy-Vee for a lot of us,” Patton said.

Iowans' food choices growing

Dunker said the need for workers spans all restaurant categories and job titles. It's particularly difficult to find management applicants, with many servers and bartenders fearing they'll take a pay cut by leaving behind their paid tips for salaried positions.

"I’ve got restaurants right now that would tell you they could hire, in Des Moines in particular, 10 people today," Dunker said. "But they just don’t have the people."

About 128,000 Iowans worked in the restaurant industry in 2014, according to data from the Bureau of Labor Statistics. The National Restaurant Association puts that number closer to 145,000 because it includes food service-related workers in other industries, like cafeteria workers at a manufacturing plant or a pizza maker at a convenience store.

There might be even more food-service workers if the pay was better, said Iowa State University economist Dave Swenson.

In 2014, the average restaurant wage was less than $13,000 a year, according to the Bureau of Labor Statistics.

"Restaurant jobs for many people are part-time jobs or secondary jobs," Swenson said. "And when the economy improves, there's more competition (for workers)."

On Wednesday, Iowa Workforce Development's jobs website, the state's largest listing of job openings, showed 1,741 food-service job openings across the state. And that number doesn't include the many restaurants who hire by hanging a sign in the window or make offers to walk-in applicants.

The hiring demand was evident at a job fair the restaurant association hosted Tuesday in downtown Des Moines, where, at times, potential employers far outnumbered job seekers.

"There are far more people looking to hire than there are people to be hired in our industry," Dunker said.

Non-traditional restaurants soaring

The $685 billion national restaurant industry includes everything from fine dining to college food courts to grocery store delis.

While full-service restaurants continue to see sales increase, the National Restaurant Association predicts sales at snack and beverage bars, quick-service and fast-casual restaurants, and retail-host restaurants at grocery stores and gas stations will see more growth than traditional restaurants.

"One of the most important drivers of restaurant industry growth over the past decade and going forward over the next decade has been convenience," said Hudson Riehle, senior vice president of the National Restaurant Association's research and knowledge group. "And one of the important drivers of convenience is what the industry calls 'off-premise occasions,' for example take-out, delivery, drive-thru. The fastest rate of growth tend to be those that are convenience-driven."

In Iowa, Casey's General Stores has built an empire on pizza and other fresh foods, earning the title of the nation's fifth-largest pizza chain.

In February, Kum & Go introduced its new Marketplace concept in Johnston, which includes indoor and outdoor seating, made-to-order grilled sandwiches and a growler station with eight craft brews on tap.

Hy-Vee, which is adding eat-in restaurants among its other food stations, acknowledges that the labor market is competitive.

“We know it’s difficult to find restaurant workers, but we have an advantage because of pay and benefits,” said Jeff Mueller, vice president of food service and restaurant development for the West Des Moines-based Hy-Vee Inc.

The growing grocery store chain, with 240 stores in eight states, started adding sit-down restaurants in its new stores in 2012 and has since converted its cafes to the larger-format Market Grilles. The company now operates 80 Market Grille restaurants, Mueller said.

Hy-Vee cross-trains workers from the grocery side of the stores to work in the restaurants, but most hire experienced food-service workers to staff the restaurants, delis and specialty food counters such as the Chinese Express, Italian Express, sushi and salad bar.

The company also offers perks to workers such as profit sharing to help attract and retain food-service employees, Mueller said.

Searching for workers

Hy-Vee is collaborating with Des Moines Area Community College to pluck graduates from its Iowa Culinary Institute, he said.

Culinary instructor Phil Carey said competition is fierce for graduates, who 10 years ago most often went to traditional restaurants but are now often going to Hy-Vee.

"Every day I seem to get a phone call or an email looking for qualified staff," Carey said. "We have 100 percent job placement."

Second-year culinary student Josh Brady hasn't decided what he'll do when he graduates in May. But the 22-year-old Iowa Falls native said Hy-Vee has grown to become a respected workplace for prospective chefs.

"The food that they have is actually really new. It’s not the old casual crap," Brady said. "It’s good actually stuff, I’ve come to find."

Kum & Go, the West Des Moines-based convenience store chain, is continually recruiting food-service workers, especially since it launched its expanded prepared food offerings in its Marketplace stores.

Retail in general is a competitive market when it comes to staffing, said Kristie Bell, Kum & Go communications director. The company offers competitive pay and a raise after workers have been on the job 90 days, she said.

Staffing is 'hell right now'

The extra competition is making it that much tougher on fast-food restaurants, which traditionally have high turnover.

Arby's franchisee DRM operates 70 stores in four states, including Iowa, and every one has openings, regional manager Loyce Benge said. How hard is it to find workers?

"It's hell right now," she said.

It's particularly difficult to fill management positions, a common complaint across the restaurant industry.

Benge said other fast-food companies are so aggressive in recruiting that their headhunters will call Arby's restaurants.

"They actually call the stores and ask for the manager and try to recruit them while they're at work," she said.

DRM has increased wages, Benge said, as the labor market has grown more competitive. She wouldn't give specifics but said "we don't even look at the minimum wage" when hiring workers.

"We pay very well in management," she said, adding that the industry also suffers from an image problem. "A lot of people don't understand that you can make some good money in the food industry."

By the numbers

• 16,400 — New restaurant jobs that Iowa will add by 2026, a 10.9 percent increase from 2016

• $4.25 billion — Projected restaurant sales in 2016, a 4.2 percent increase from 2015 

Source: National Restaurant Association

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