Florida Restaurant Chain Helped End Labor Shortage By Boosting Pay and Offering Better Benefits
It’s no surprise that restaurants all over the country are really struggling right now. In the current labor shortage, finding staff to fill job slots is no easy task, which they can thank for the low pay, poor benefits, and lack of flexible working hours that most industries are seeing.
However, one restaurant chain in Florida is trying to help mend the issue by improving their benefits and offering higher pay for employees.
The restaurant is Pollo Tropical, a Caribbean-food chain with 169 locations in the state. Thanks to their ways, they’re almost back to normal staffing levels since before the pandemic.
So what specifically are they doing to be so successful in the hiring process? For one, they’ve begun to offer initial sign-on bonuses. On top of that, they’ve added childcare leave, paid education and better, more affordable healthcare to its benefits package—all things the standard family can really benefit from.
All of these things are factors in “remain[ing] competitive in these challenging market conditions,” said Richard Stockinger, CEO at Fiesta Restaurant Group, Pollo Tropical’s parent company.
According to the restaurant’s CFO Dirk Montgomery, wages made up 28% of Pollo Tropical’s cost of sales in the third quarter, which as a 4.7% increase in the same quarter last year. Montgomery chalks the change up to the higher wages and overtime pay “due in part to labor shortages.”
Additionally, one way restaurants are compensating for the labor costs are to raise their menu prices. That includes Pollo Tropical, which is taking a phrased approach to the increase. The chain raised its prices by 3.7% in August and plans to go even higher in December—between 4% and 6%.
One of the biggest reasons for the increase is that sales are greater for well-staffed restaurants, which is defined by Montgomery as being at at least 80% of optimal head count. In October, its restaurants were at around 85% of optimal head count, an increase from 70% in the company’s second quarter.
Stockinger says that the company expects margins to recover in the first half of 2022 because of price increases and more staffing efficiency.
How often do you eat out in restaurants these days? Do you find that when you do, you have a good experience? Or does that worker shortage make a big difference? Have you ever heard of or eaten at Pollo Tropical before? What do you think of how they’re attempting to mitigate the current labor shortage?