The median hourly wage in limited-service restaurants was up 10% in the second quarter year-over-year, and up 6% among full-service line cooks, according to a Black Box Intelligence webinar on Thursday.
Hourly workers in limited-service restaurants made a median of $11 per hour in the second quarter, compared with $10.50 per hour during the first quarter this year, which at the time was a 4.1% increase year-over-year.
Line cooks made an average of $15 per hour during the second quarter, up from $14.85 per hour during the first quarter.
The data comes as part of a larger report released last month by Black Box looking at the industry’s labor crisis, which has caused turnover rates to climb significantly. Across the country, many restaurants have been unable to open fully because they are having trouble finding staff, said Victor Fernandez, Black Box’s vice president of insights and knowledge.
Turnover, which was already high before the pandemic started, is also costly. The per-person cost of a terminated employee is $14,689 for a general manager, $8,119 for a manager and $1,869 for an hourly worker — with most of that cost going to training new workers.
Tapping results of a survey conducted with Snagajob, Black Box found four key factors causing restaurant staffing shortages: wages and benefits, the challenge of finding child and family care, opportunities in other industries and concerns about physical and mental health.
In the webinar, Black Box officials took a deeper look at compensation, saying more companies are using pay incentives to win workers back.
Higher base pay rates are being offered by 82% of companies in 2021, compared with 64% in 2019. And 54% are using sign-on bonuses, compared with 21% two years ago.
The median base salary-plus-bonus package increased significantly for full-service general managers in the second quarter — up 5.1% to $90,129 — but among limited-service restaurant GMs, the median rate declined 2% to $63,878.
Fernandez said the average merit increase for GMs is expected to normalize in 2022, with increases of 2.5% projected, compared with 2.7% increases this year and in 2019.
GM bonuses, however, are expected to increase next year to 21.4% of base salary, compared with 19.1% of base salary in 2021.
Benefits are also on the rise, with more than half of restaurant companies now offering flexible scheduling for hourly workers and GMs, and a growing number offering perks like financial planning and family/elder care leave.
Restaurant workers now get an average of five sick days per year, compared with two in 2019. And 63% of restaurant companies offer wellness programs, compared with 38% pre-pandemic, and 80% offer hourly workers a 401K plan, up from 66% in 2019.
“What this says is we’re seeing restaurant companies offering more,” said Fernandez.
Will the industry ever be the same?
Fernandez said the answer is yes and no.
On one hand, he said, “I believe we’ll be able to figure this out. If anything, the last 18 months shows how resilient this industry is.”
On the other hand, the labor challenges the industry now faces is a worsening of problems that existed pre-pandemic.
In 2019, turnover was already high and restaurants struggled to staff their kitchens, Fernandez said. “So things won’t be the same in that we have to change, we have to evolve.”
To watch the webinar on demand, go here.
Contact Lisa Jennings at [email protected]
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