What Should Restaurants Be Thinking About Regarding Benefit Strategies?

This edition of MRM's "Ask the Expert” features advice from Trion Group. Please send questions to Modern Restaurant Management (MRM) magazine Executive Editor Barbara Castiglia at bcastiglia@modernrestaurantmanagement.com.

Circumstances change rapidly in the restaurant sector.  Demand is surging and finding employees has become almost impossible.  Simply caving into wage inflation usually turns into a permanent adjustment, so employers are looking for creative methods to attract employees.  The ideal solutions are relatively low in cost, but have a high perceptual value to this workforce.  

There is plenty of debate regarding the reasons for the labor shortage- unemployment benefits are too high, lack of childcare for parents and COVID-19 safety concerns. Regardless, the problem will be with us until the unemployment programs reset. Outside of students who are not eligible for unemployment, there are simply not enough workers to go around. The question is, how do you get your fair share – or a larger percentage – of those workers?

An interesting dynamic occurred with the January 2021 benefit open enrollment period.  Even with lower employment levels, we saw a 10 percent to 15 percent increase in enrollment with our restaurant employers – not one of our customers saw a participation reduction.  In addition, while not specific to the restaurant industry, we also saw significant increases in life, disability and voluntary benefit purchases.   The only factor that could have contributed to this change is increased interest in benefits due to COVID-19. Cash has been king in attracting restaurant crews, but is it possible to use benefits as a differentiator?

Reducing the contribution levels for traditional medical plans is not a viable solution.  It is both extremely expensive and results in a long-term commitment.  On the other hand, the following are a few less expensive options that might be effective:

  • Offer part-time employees a limited benefit medical plan with a partial company subsidy. To be successful, a reasonable subsidy would be about $60 per month.
  • Consider paying for telemedicine and discounted medical services. This type of program can cost less than a half an hour of wages for the entire month. 
  • Provide tools to assist non-benefits eligible employees gain access to medical coverage through the Health Insurance Marketplace, Medicaid and Medicare.  These tools cost the employer nothing, but can be very helpful to a perspective employee looking to cover themselves or family member through qualified programs
  • Offer a partially subsidized technology protection program. All employees have cellphones, tablets and TV’s. With a gross cost of about $40 per month, a $20 subsidy would make the program far more attractive than the warranty and insurance plans offered by the manufacturers and cell service providers. 

These concepts do not solve the $10 to $15 per hour issue we are facing; however, they could help pick up a few more employees than the restaurant down the street. 

As we enter the second half of 2021, employers are recognizing that they have to fight harder to attract quality applicants and keep existing employees.  Good people found other employment options during the pandemic, and the restaurant sector now needs to emphasize its advantages so that operators can lure back employees. Correspondingly, good benefits – well communicated and designed for ease of use – should be part of the package to create a positive shift for the restaurant sector and its employees.