New Philadelphia restaurants are struggling to navigate ‘completely insane’ labor market

Source also pays for employees to complete training to become certified cicerones, essentially the beer equivalent of a sommelier
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By Laura Smythe – Reporter, Philadelphia Business Journal
Oct 20, 2021, 11:13pm EDT

Persistent hiring woes are creating problems for new restaurants opening in Philadelphia as business owners try to figure out how to recruit and retain enough workers to ramp up operations.

The challenges come as restaurant workers across the country are quitting their jobs at alarming rates. In August, hospitality employees had a quit rate of 6.8%, more than double the record national average quit rate of 2.9%, according to the Bureau of Labor Statistics. That equates to 892,000 accommodation and food service workers that threw in the towel.

Newcomers to Philadelphia’s restaurant sector say it’s hard to pin down one core reason for the labor issues, but some say prospective employees are looking for more out of their positions and employers than they were before the Covid-19 pandemic.

“The industry has shifted,” said Andrew Burman, co-founder and COO of Brooklyn-based Other Half Brewing Co., which is on track to launch a Philadelphia location in Fishtown by year’s end.

“People are looking for more longevity with benefits and good culture and trying to offer more than a place to clock in and clock out,” he said.

Other Half aims to open with about 40 employees. The company has hosted hiring events at its 1000-1002 Canal St. location and recruited via Indeed, Instagram, word-of-mouth and other methods. The brewery is utilizing more recruitment channels than was necessary when opening new locations in the past, Burman said, because the hiring landscape has become “harder and more competitive.”

At Source Farmhouse Brewery, which opened last month at 1101 Frankford Ave., it’s noticeably more challenging right now to fill back-of-house positions like cooks and dishwashers than front-of-house spots like bartenders, servers and managers, said Co-Founder and Managing Partner Philip Petracca. The brewery, which took over the former home of Fishtown Brewpub, has about 15 employees and is looking to fill several positions.

The back-of-house versus front-of-house hiring dichotomy falls in line with what restaurants are seeing across the country. Compared to 2019, full-service restaurants are operating with 6.2 fewer back-of-house employees and 2.8 fewer front-of-house workers, according to data from restaurant analytics group Black Box Workforce Intelligence.

To help create a positive work environment, Source Brewery is emphasizing the importance of mental health. While many business owners point to bolstered pandemic unemployment benefits for stunting job applications in recent months, “there wasn’t a huge increase in the workforce of people seeking employment” when extended benefits expired in September, Petracca said.

“We’ve noticed there’s a psychological impact of the lockdowns and acclimating people back into the workforce, and getting them comfortable is something we have a focus on,” Petracca said. “If the personal mental health and well-being of our coworkers is not good or not being met … they’re not going to be able to do anything else well,” he added.

The restaurant industry is particularly stressful and often accompanied by long, late hours and peak times of weekends and evenings that skew workers’ social lives differently than their peers, Petracca noted. Source aims to be mindful in ensuring employees are given time for the basics like sitting down for proper meals in a “respectful manner,” and recently it brewed a beer called “Muralist” for which it donated the net proceeds to local mental health nonprofit Council for Relationships, which provides low-cost therapy on a sliding scale.

Source also pays for employees to complete training to become certified cicerones, essentially the beer equivalent of a sommelier. That initiative helps workers provide a greater level of service to guests because of a deepened understanding of the brewery’s product while also keeping employees engaged with a goal to work toward, Petracca said.

Availability of career development and mentorship opportunities has also become increasingly important to workers at local fast-casual chain Honeygrow, both on the customer-facing and corporate sides, Founder Justin Rosenberg said. The brand took to Fishtown Crossing last month to open its 25th location, which launched with about 30 workers and is still hiring.

Honeygrow has noticed application numbers rebounding since the depths of the labor shortage this summer, but obstacles still remain, Rosenberg said. From May to July, Honeygrow received an average of about 100 applications per week across 25 locations. Now it’s receiving between 900 and 1,000 applications each week, but many people still won’t show up for an interview or a shift, creating another “tremendous challenge.”

Honeygrow serves a variety of salads and stir frys. JASON VARNEY / HONEYGROW

The candidate pool is more diverse than it used to be, Rosenberg noted, with applicants ranging from high school students to retirees. In efforts to be more competitive in the tight labor market, Honeygrow has upped hourly wages in the last six months to around $15, he said. It’s also stressed that because 66% of transactions are completed on Honeygrow’s app or in-store kiosks, tipping is made easier and effectively adds a few dollars to the hourly wage.
“This labor market is completely insane,” Rosenberg said. “I don’t think anyone can nail [why] specifically. There’s a lot of factors involved.”

Figo Ristorante and Pizzeria is the newest concept from local restaurant group Glu Hospitality. SOCIETY HILL FILMS

As many college students returned to Philadelphia at the end of summer, Glu Hospitality — the group behind Set, Anejo, Izakaya by Yanaga and newly opened Figo Ristorante and Pizzeria — has seen some improvement in the hiring game, Co-Owner Derek Gibbons said. During the summer about 50% of applicants would actually show up for job interviews, but that has grown to roughly 80%.

The menu at Figo includes housemade pastas, pizzas and salads. MAX GRUDZINSKI

“I suspect that before when people were still getting unemployment they needed to show they were actively looking for interviews, so lots were showing they were responding to emails, setting up interviews and then not showing up,” Gibbons said.

Glu has relied on its ability to shuffle staff around between its many concepts to fill gaps. The strategy helps foster a team spirit between the restaurants while also maximizing tips for front-of-house workers as they’re moved based on business volume, Gibbons said.

“It’s more beneficial for them and it’s more fun,” he added. “I’ve worked in the industry for a long time now and it’s always cool going from a different venue to a different cuisine and different atmosphere.”