Jun 182014
 

Less than a year after writing the report on the state of the restaurant job / labor pool balance I find that the trend in restaurant growth and labor pool decline continues. Fewer cooks and culinary professionals are being courted by more jobs. We have what in supply and demand terms would be termed a “sellers’ marker.”

Why?  

1)      More restaurants  have opened in this year alone than opened during the recession,  and the trend continues. Not only are edgier restaurants opening in San Francisco but in the Midwest, the South and even in Florida. Washington DC has been celebrating it’s own culinary revolution.

2)      Hotels, which spent the recession and in some cases the previous years reducing their food service to a simple restaurant and catering are now adding fine dining restaurants in order to attract more guests, again diluting the labor pool while creating more culinary employment.

3)      Increases in chef owned restaurants continue. The recession motivated many young chefs on the way  up to stay in one place rather than move around, as was the trend prior to 2011. Job commitment always provides a more solid learning experience than frequent job change.  As they stayed in second positions fewer cooks moved up to the sous and chef de cuisine positions. The result: No additional chef jobs, dilution of the labor pool removal of some very talented support staff from existing restaurants.

5)       The cost of culinary school plus the spiraling cost of living in most of the culinary centers, especially San Francisco: Culinary school graduates from the last four years – those from 2011 would now be moving into junior sous chef positions – cannot afford to live on restaurant wages and seek employment elsewhere.

6)      More non production choices and media aspirations on the part of culinary schools. During a SF Chefs panel discussion last year four young women stated during the question session that they were about to graduate. Every chef on the panel requested to speak to them afterwards. When they spoke with the chefs, they all stated they were not interested in working in a kitchen. They wanted to be in the media, either as  food writers or on television.   The Art Institute is affiliated with the Food Channel, which attracts many of their students when they graduate. Other schools now teach media with their regular classes.

7)      Housing (primarily San Francisco). The once  steady stream of cooks and chefs from Chicago and New York is hardly a dribble, as the cost of  housing in the San Francisco area has skyrocketed.

8)      Silicon Valley: As more and more companies develop subsidized in house facilities for their employees, the number of qualified cooks and managers working in them increases. These positions, although they are generally not  high end learning experiences, can offer higher wages or salaries, better benefits and bankers’ hours with  holidays off. That giant sucking sound you  hear is probably Google or Apple, which have resources unavailable to independent restaurants and small groups.

9) Stricter INS immigration enforcement has removed undocumented talent from kitchens, and many documented personnel have chosen to cash in and return home. Fewer qualified and documented replacements are entering the country.

10) Gen Y appears to have a more demanding and less committed crop of ready restaurant staff. Like the little girl, when they are good, they are very, very good, but when they are bad……

 

The results:

1)      Many restaurants continue to work understaffed.  Restaurants are raising the wages and salaries they pay, but flexibility limited by what they can reasonably charge for food as food prices rise,  wages for the back of the house usually lag behind earnings on the floor.

2)      There are more chef owned and managed restaurants, which do not offer chef jobs.  Some of these will expand in the next years, which will require more culinary management staff. Most of the very high end properties.

3)      Some restaurants are paying their cooks to convince their friends from other restaurants to come over and work.

4)      Salaries for chefs are on the one  hand raised by supply and demand, but the increases are sometimes limited by the increased wages of cooks. We have seen more generous six figure salaries in 2014.

What does this means to you:

1)      It is no longer perilous to change jobs.  New positions are risky, but if one does not work out, you will not  have to look months for another one. If you wish to relocate it is still wiser to inquire as to the local job market. Not all areas of the country have recovered to the same extent.

2)      You have the luxury of choice. If a job does not seem quite right, you can turn it down knowing that another will at some point come along. It is still, however, wise not to quit one position before obtaining another.

3)      The rules of engagement remain the same.  Calls in response to resumes sent should always be returned. Appointments must always be kept. Cards should always be played on the table Within the limits of discretion. If you have an offer from one restaurant and another asks you to try out, you should tell them.  The food and beverage industry remains small, and people talk.

4)      There is no more room for the testy chef. Cooking and qualified front staff are at a premium. If a chef alienates cooks,  s/he may find him/herself more expendable than the dishwashers.

 

Trends for the future:

We have had several consulting positions for very upscale and edgy quick serve recently, while restaurant trends report that the number of millennials eating out is declining. With the enormous number of new restaurants in the City, some booked for weeks but others struggling, there may be something like a restaurant correction  in the works accompanied by an increase in take out/ order in business models. (Which is an excellent reason to be courteous and responsive in interviews).
Proposed minimum wage hikes in many cities in California, where there is no tip credit, along with steeply rising food costs are going to force restaurateurs to tighten their belts and raise their prices. As there is a tipping point where higher prices cause guest loss, it seems highly probable that a number of both newer and older restaurants may not endure.

While this probably will not constitute a restaurant bubble, it could suggest a herd thinning.
The number of highest level and very expensive restaurants in San Francisco and elsewhere may have reached a limit. As the newly wealthy diners buy homes and have babies, the demographics for $200 plus tasting menus will decline.  As one chef said on taking a position in a new luxury Quick Serve Café roll out, “I have decided that dining is just another expensive habit.”
Labor – the ten cooks needed to prepare one dish in a tasting menu – is the new restaurant luxury. The expected rises in labor costs will test the sustainability of fine dining.

Fine dining vs casual: While I do not expect restaurants to return to the overplayed mac n’ cheese menus of the early millennium, I think it is a foregone conclusion that the majority of new restaurants will be looking at more approachable menus and pricing.

More and more restaurants are finding profit points in volume and will expect volume skills from any culinary management they hire.

With a lot of free cash flowing from  Silicon Valley there should be more chef owned restaurants opening (meaning again a tighter labor pool as those chefs are no longer available for employment and will further dilute the hourly staff available).

High end restaurants will continue to expand with more approachable concepts (again diluting the labor pool).

Disclaimer: I am not an economist. Your choices need to be  yours. The above insights derived from continuous observation and our own challenges is based mostly on San Francisco conditions, but supported by our interaction with chefs and owners around the country. It  is intended merely to provide some insights into factors that you can consider in your decision making.

 

 

Oct 032011
 

 

 The good news: Things are improving.

The bad news: Not for everyone.

The fear of a double dip recession seems to be waning, and the dining public, whether because they are doing better or because they are just tired of pulling in their belts, are opening their wallets in restaurants again.

Hiring is up:

That means that restaurants are hiring once more, although not with the enthusiasm we saw four years ago and not at the prices. It is still very much a buyer’s market, with some positions going up to twenty thousand or more under the highest compensation of the restaurant boom years.

New restaurants are opening in most of the major dining areas, partly because property can be had and leases can be closed at attractive prices and partly because many qualified culinary and FoH professionals have preferred to open their own locations rather than continue to battle a bleak employment market.

What is more important is that restaurant professionals are beginning to reach their heads out of the trenches, so there is circulation in the job pool. One of the main causes of low availability of jobs during these last years was not that so many locations were closing or cutting back, but because fewer chefs or managers were daring to leave their positions to move on or up, resulting in a stagnant employment situation and a great lack of available talent. Think of the employment market as a game of musical chairs in which nobody stands up.

Improvements are not universal:

While this is changing, the change is not complete, and the improvement in the job market is not universal nor does it cover all jobs equally.

The currently most sought after position is that of sous chef.  Serious pastry chef openings  are still rare, and I question whether the pastry earlier pastry chef frenzy will ever be seen again.

Good chefs for some parts of the country are in high demand, but the market shows extreme regional differences. Florida appears to be the worst hit location for chefs and managers, while Los Angeles, San Francisco, Boston and New York, among other destination restaurant cities, are increasing hiring.  Texas, which did not suffer terribly during the worst of the downturn, continues to require qualified staff. Oregon, Washington State and Colorado all seem to be recovering nicely.

Internationally the main job creation appears to be in the United Arab Emirates followed by China, then the rest of Asia. This is an excellent time for qualified professionals – the sweet spot is for chefs de cuisine and Executive Sous Chefs – to launch their careers in some international five star properties.  These all require completed professional education, a stable background in recognizable restaurants of quality, usually at least two years minimum in each spot. Since only the USA follows equal opportunity employment standards, foreign employers can set requirements for nationality, age and gender. Most foreign jobs will go to chefs between about 29 and 42 years of age. Most prefer European training to American, although American chefs are sought after in some places.

It is going to be interesting to see how compensation develops. In “progressive” areas like San Francisco, where municipal and state mandates eat up large percentages of operation profits, some of the costs are likely to be taken from the salaries of the middle and upper food management.  The exploding cost of food, furthermore, is going to put pressure on salaries in a zero sum game, where raising prices will cause customer loss.

The Depression feeling of the age continues to influence menus, customers preferring simpler and less intimidating cuisine with few new attempts at cutting edge food and still limited opportunities for chefs who have put a great deal of effort into developing the newest and most complex cuisines. At some point this will change, but for the moment positions requiring small staff quality comfort menus vastly outstrip those requiring cutting edge, labor intensive processes.

Since so many chefs and managers have remained at the same location for the past three or four years, stability, which is often desired, is now expected. Those who have changed frequently will be competing with professionals whose resumes show a higher level of commitment.

There are a large number of self employed chef owners among the job seekers, With a few exceptions, the market is not welcoming them, nor is it welcoming those who have been independent contractors or consultants.

What this means for you:

1)      It is less risky than it was to seek another job, but there are still not so many available that you will find a safety net of other opportunities if the new position does not work out. This means it is important to determine that any change is well within your competence and with a solid business.

2)      Regional differences in hiring make it hard to move to some areas of the country, and job seekers in those locations will find that the ration of available positions to job searchers is low. You should not, thus, relocate to San Diego or Miami, then look for a job.  Even in the more active employment markets local candidates are generally preferred to those who have not been working in the area’s culture for some time.

3)      Salaries offered at new positions may not meet or exceed current compensation if you have been at a location for several years.  The competition for desirable positions is high, and all employers will take your salary requirements into consideration when making their choices.

4)      From the employer perspective, there are still some “deals” to be had in staff. Offering too little, however, creates the risk that a competitor will recognize and lure away your “bargain” chef.  Those who accept exceptionally low salaries, furthermore, generally reveal themselves to be worth what they are paid.

5)      While most of the weak restaurants have been culled from the herd, there are still some hangers on, who hire chefs just to get to the next month. While common sense and caution is important for everyone in the hiring process at all times, care in choosing a financially sound operation is especially important during times like this.

6)      Despite the state of the economy, the prime rules of job choice do not change. Choosing for quality and professionalism is always the best policy.

7)      We have no guarantee that we are really out of the worst of the financial crisis, despite the growing consensus that the double dip recession is not going to occur. Now, in Oct 2011, the weakness in the EU could have a profound effect on all restaurant markets. Keeping this in mind, choosing employment with strong businesses makes a lot of sense.

8)      Restaurant pastry chefs may indeed not come back for a while, although they eventually will. At the moment extreme pastry is getting a great degree of press (Foe gras ice cream, berry and estragon napoleon, etc.) but the overall demand that does exist generally involves highly developed bakery skills. Hotels, on the other hand, continue to hire and train pastry staff and will presumably continue to do so. Those early in a pastry career should consider these realities when choosing their path.

Above all the current economic situation of the restaurant industry means for you that you will continue to need to make you choices in the direction of your overall career and your next job decisions with more care than we assumed necessary a few years ago.

Oct 062010
 

It’s time for  a state of the industry piece,  but since things still haven’t changed much since the last  status update,  let’s talk about what’s happening in kitchens rather than what’s happening to them. The changes in the industry don’t involve restaurants as much as the people who work for them.  Ambition,  slow turnover, occasional desperation  and a tight field of competition are creating nasty situations where you would not expect them. There’s more skulduggery afoot in the kitchens of America  than Cap’n Jack could have managed in a lifetime. The extended job bank/labor pool mismatch is changing  people or at least showing them for what they are.

Employees wanting more sooner than the slow pace of advancement allows – “The chef’s’ going nowhere” –  suddenly discover not only that they can be Machiavellian,  but that they are awfully good at it. Some have studied it on reality shows and as young entrants into the culinary world, they play shoot-down-the-supervisor with the same spirit as their parents played Trivial Pursuit. They generally win.

Ruby reports being kicked out of a position when a recent hire with aspirations for her slot took a comment out of context straight to the top. Once having positioned herself as a victim, the  young woman  is assured special consideration for an early promotion. Knowing Ruby extremely well, I know that the comment ascribed to her is not possible. Having met the young woman and water carrier, I know that the political attack of the summit is absolutely within her ability. She’ll go far.

Mike finally left the job where he was written up by HR for “pulling a (Swiss Army)  knife” on a Union subordinate  (He was going to use it to uncork a bottle of wine). The subordinate and two of his colleagues went straight to HR and reported the attack. Mike, bless him, went in swinging when they called him:  “If I were going to pull a knife on anyone, I had a lot better equipment at hand.” Mike also said it was reckless defamation, asked if he needed an attorney and  who had complained. “They have a right to be anonymous”,  replied HR. The case died in HR the moment he pushed back. Unfortunately, Mike now had a crew knew they could win at “get the new guy”, and life was not good. He’s catering for the moment.

Jane  was terminated within 24 hours of  speaking her mind to a “friend” in the privacy of her office about a supervisor. Jane thinks that someone was listening at the door.  I suspect there was no eavesdropping. The person she shared her opinion with curried favor by sharing it with management.  Either way, nobody gets an Eagle Scout badge for noble behavior – even Jane should have curbed her tongue.  People get nasty in odd job markets.

Restaurant people used to be tough.  Where did this strain of ambitiously whining tattle tales come from?

Mike, Jane and Ruby are not just victims of bad behavior by people who know how to get what they want, they are experiencing bad leadership. Managers, Boards and  HR departments who don’t look into accusations but act on  them without hesitation enable cut throat politics. “The right to be anonymous” in  accusing a coworker for ones own benefit is not a positive addition to the restaurant staffing culture.

One bright manager commented on the state of affairs, which she sees occasionally, “It’s amazing. It’s as if they were all stuck  in 8th Grade. Junior high playground politics still works for thirty year-olds.”

Subordinates aren’t the only ones behaving badly.   When Alex asked for back pay he  was fired and found the restaurant  closed. She told me, he says, when she hired me,  that they were in great financial shape, but she had me paying all the staff under the table.” Longer hours are nothing new, but they are more frequent and sometimes without overtime.

I hear these stories enough to see a  pattern –  a sous chef is lured to a chef job in what appears to be a good restaurant. He discovers the first morning  that nobody will deliver fish, that the promised staff is not available. You have heard these stories.  “What else is out there, ” the chef asks.  “I never should have left the old place, but he made it sound so attractive.”  Response: Not a lot. No you shouldn’t. Life is just a case of Mad Men.  Have a Martini and a cigarette.

It’s not just the little places. “It’s not the job they told me about. They promised me a bonus,” says Jane about the position with a respected restaurant group,  “I was frustrated, because they had hired me away from a good position with promises and a vision which disappeared when the client they were managing the property for quit paying them.”

There’s payback for some of this, as claims against employers have risen ten fold by disgruntled employees no longer in the service of the business, even it it was the employee’s request to change time cards or work a long shift without overtime to make a three day weekend possible. More people behaving badly in response to people behaving badly. Let’s add, just for fun, that many of the actions are encouraged, sponsored and even carried out locally by a non profit which is supported partially by the taxes of the restaurants it attacks.

And then. There are too those out of work who are desperate. We are seeing so many more falsified statements of employment than we are used to.   There is self justification and there are excuses. There are appeals to compassion . “Let me explain,”  says the candidate, whose last job has disappeared from his resume. I couldn’t take the heat. They sold me a bill of goods. I had no idea it would be that bad when I went in, and the response? What would you say? “Here’s the thing,” says another, and another excuse is dropped.  Stories are told. Never, “I messed up.”  My friend Dan says that’s the nature of the beast. Restaurants are like that. Maybe he’s right, which is odd at a time when the word “integrity” pretty much drips from every press agent’s lips when discussing the practices of her best chef of the beliefs of her client.

What’s this mean for you? There’s a moral here somewhere.  You figure it out.