It’s still not unusual to go to a favorite restaurant for lunch and find a sign saying “Closed due to lack of staff.” Or to find a longer wait than expected despite several empty tables.
It’s been a rough few years for NH’s hospitality industry, which ranks among the top five employment sectors in the state. The first year of COVID, from March 2020 to March 2021, an estimated 200 restaurants closed, according to the NH Lodging and Restaurant Association. The situation was so dire that the trade group launched the “Rally for NH Restaurants Campaign” in February and March of 2021.
Three years later, the industry is on the rebound, although hiring problems persist, says Mike Somers, president and CEO of the NH Lodging and Restaurant Association. Rising food costs and wages have compressed what was an already narrow profit margin as restaurants of all stripes struggle to keep prices at a level that won’t drive away customers. Employees are still hard to find and retain, but it’s getting better.
“It’s a mixed bag,” says Somers. “The upside is our customers and consumers are still coming out, still frequenting our restaurants, still dining out as an affordable luxury and that’s helping the picture. But the real challenges continue to be operational. The cost of labor is up 30% or more depending on where you are; wholesale food prices are up 18 to 20% in the last couple of years; and energy and insurance costs are through the roof. You name a category of expense, and every one is up double digits.”
Meal prices, while noticeably higher, have not kept pace with increasing expenses, according to Somers. Another hit on profitability has been the wage increases needed to attract restaurant workers, who remain in short supply.
The North Side Grille in Hudson, like most restaurant owners these days, is always advertising for help, always interviewing, always hiring to manage turnover, and yet is still always short staffed.
“I feel more comfortable with staffing now,” says Owner Roger Soulard. “It’s to a point where it was before COVID, but
it was already hard to staff. I will schedule four interviews, and if you get one out of four to show up, that’s a great showing.”
However, he is seeing more interest from job seekers. “In the past couple of weeks, I can tell more people are applying. I’m getting more people on the phone and we’re getting at least halfway through the process,” says Soulard, “whereas two years ago it didn’t matter where I advertised, or how I promoted it.”
Pressure on Wages
Those who do show up and are qualified expect more money. “In 2019, it was a lot more common to see under $20 an hour for kitchen help,” says Soulard. “I brought in my first really skilled guy into the kitchen, a chef from culinary school, in 2013 at $18 an hour. In 2013, $18 was paying the top guy in the kitchen, and now, the least skilled workers are at $16, and skilled people are all hired at $20-plus, easily.”
On the flip side, some changes work to the industry’s advantage. Take-out and outdoor dining, which kept restaurants alive during the height of the pandemic, are now mainstays. And higher prices for meals, combined with tipping habits acquired during the pandemic, have contributed to significant gains for waitstaff.
Kitchen staff is where the shortages are felt most severely, with restaurants compensating by closing certain sections or not operating on certain days, like Mondays or Tuesdays, or both.
Jorge Villa, owner of Los Cantaros in North Hampton, feels fortunate that he’s held onto the staff that has been with him since he opened the Mexican eatery three years ago at the height of the pandemic.
“Honestly, in my location I haven’t had an application for six months. We’re always hiring, but no one is applying,” says Villa, who like all restaurateurs has had to raise wages significantly. “Before COVID you would hire a dishwasher at $12 to $14 and now you have to pay
$18 or $20. Line cooks and chefs are much higher.”
Housing Challenge
In addition to overall inflation, much of the wage increase in Southern NH is driven by the prohibitive cost of housing, particularly in the Seacoast, where there are more restaurant seats than residents and some restaurateurs are going so far as to build affordable housing on their own.
The Portsmouth Hospitality Group, with holdings that include Martingale Wharf, The Rosa, and the Sol Southern Kitchen, is converting the second floor of the Sol into housing for their workforce, with rents that more closely match
their income.
The Seacoast area Labrie Group, which owns and operates Jimmy’s Jazz & Blues Club, The Atlantic Grill, The River House, and Waterview Grill, also has a housing project in the works. “They have a plan to build some housing for their workforce on Route 1 that is working its way through the permitting process,” says Ben VanCamp, president of the Chamber Collaborative of Greater Portsmouth. “We are seeing some of the larger groups that have economies of scale justify taking some property and using it for housing. That’s going to do a lot for their retention and keeping a stable workforce.”
Most restaurant owners can’t afford to acquire housing for their staff, but they are finding other creative ways to retain valuable workers. “They are helping employees if their car breaks down and they can’t afford a new set of tires. They give them a loan and take it out of the next week’s paycheck,” says VanCamp. “So, we are seeing a lot of restaurants take really good care of their employees. They know replacing them is going to be a challenge, and it’s no secret retaining an employee is better than finding a new one.”
The Group Benefit
Restaurant groups that share common ownership have the advantage of support staff that can be deployed to address shortages. Ian Buckley, vice president at Michael Timothy’s Dining Group, oversees an organization managing eight restaurants with a corporate staff that can jump in to plug holes.
“With our group we are able to maintain a little bit of support—a corporate executive chef, a director of operations—and they are restaurant people, so if we are down a host, the director of operations goes and hosts. When we don’t have a line cook, the executive chef or even company owner will jump in to make salads or work the fry station,” says Buckley.
Like others in the business, Buckley is always in hiring mode. “It’s constant. It’s one of our biggest daily hurdles, to be honest. We have five locations just in Southern New Hampshire, and there’s probably not a day that goes by that I don’t have five to 10 job postings for open positions we have. We never have a completely full team everywhere.”
Yet optimism reigns, as Michael Timothy’s Dining Group plans to transform a former SNHU satellite campus on Amherst Street in Nashua into the Lost Cowboy Brewery and Restaurant, with a scheduled opening in late May. The 17,000-square foot building overlooking a pond with an adjacent parking lot will seat 300 and require a staff of 60 to 70 to open the doors, says Buckley, who’s not alone in being bullish on the industry.
“You see it right here in Manchester,” says Villa, during an interview in the Queen City. “There are four or five new restaurants opening right now, so that says to me the restaurant business is good.”
Current Issue - May 2024