Customer service suffers in low-staffed restaurants when Covid takes customs

Jeff Rothenberg has become accustomed to long waits at restaurants, even when the tables are visibly open.

“Another restaurant we went to had open seats outside, but when we went to the host, they mentioned that the kitchen was sparsely staffed,”[ads1]; Rothenberg, an operations director at a California-based fintech firm, told CNBC. “So even if he had a seat, he would put us on a 30-minute waiting list to get a seat.”

Rothenberg was on the 30-minute waiting list for almost an hour, he said. Then, after sitting down, he waited another 45 minutes for the food to arrive.

“It was the kind of experience that makes me not want to eat out that much,” he said. “I felt bad for the servers, because they tried, but they could only do so much, because they did not have enough chefs.”

This is a scenario that has been repeated throughout the food service industry since the Covid pandemic began in 2020, and it is also taking a toll on restaurants and their employees.

Closures in the spring of the same year led to layoffs and layoffs for many chefs and waiters, prompting the federal government to support billions of dollars in forgiving loans to small businesses. The disease ravaged the U.S. workforce, killing more than a million people in two plus years, while many millions more became ill, according to the Centers for Disease Control and Prevention.

As states eased their restrictions, employment in the restaurant recovered, although industry is still down with 750,000 jobs – about 6.1% of the workforce – from pre-pandemic levels in May, according to the National Restaurant Association.

Customers notice the difference. In the first quarter of 2022, customers mentioned short staffing three times more often in Yelp reviews than the year before, according to the restaurant reviews website. The coverage of long waiting times increased by 23%.

“I think the experience has been different since Covid. I see that the restaurant industry has changed a lot,” Nev Wright, a health worker, told CNBC outside Firebirds Wood Fired Grill in Eatontown, New Jersey. “It was not always like that – now it takes time, with expenses and lack of staff and everything.”

The US Customer Satisfaction Index found that consumers were less satisfied with fast food chains this year compared to 2021 – the sector’s score dropped to 76 out of 100, from 78. Customers were less satisfied with the speed and accuracy of their orders and the cleanliness and design of the restaurant.

Customer satisfaction scores for independent and small chain restaurants also fell this year, to 80 out of 100, from 81, according to ACSI’s annual report. Some national full-service chains saw their results fall even more from year to year: Dine Brands’ Applebees fell 5%, Darden Restaurants Olive Garden 4% and Inspire Brands Buffalo Wild Wings 3%.

Eatontown resident Theresa Berweiler said that over the past year she has been faced with consistent closing times and long wait times at restaurants, even when they are not in a hurry.

“I’m 64 years old and I’ve never seen anything like it,” the receptionist told CNBC on Wednesday outside a local Chick-fil-A. “Everything is very strange. Covid has definitely changed the world, and I’m not sure for the better.”

Restaurants are not the only companies that see the labor crisis affecting customer service. U.S. consumer complaints against airlines more than quadrupled from pre-pandemic levels in April, according to the Department of Transportation. Hotel owner Hilton Worldwide is not happy with its own customer service and needs more workers, said CEO Christopher Nassetta in the company’s quarterly earnings report in May.

For restaurants, staffing challenges have put pressure on an industry that is already struggling with inflation and recovering lost sales from the pandemic. Alexandria Restaurant Partners, a group that owns and manages eight restaurants across Florida and Northern Virginia, has dramatically changed the way they operate.

“We are not sure where all the workforce went, but many of them have disappeared, from managers to chefs to hourly wages,” said Dave Nicholas, a founding member of ARP.

Now, Nicholas said, his focus is on hiring and retaining. The group opened a recruitment position and now has two full-time employees who work to bring much-needed employees into jobs with higher salaries and better benefits than the group has ever had.

“Before, you could hire them as soon as you needed them. These days, that’s not the case,” Nicholas said. “Our mission is to be the preferred employer. It comes with benefits we may not have had before, down to servers, busboys and dishwashers. The cost of that has been huge, but the cost of turnover is huge, so we weighed it.”

However, not all workers bring home more wages, even though their basic wages increased. Saru Jayaraman, director of the Food Labor Research Center at the University of California Berkeley and president of One Fair Wage, who advocates leaving tipped pay, said frustration from understaffing often results in lower tips for workers. In turn, lower wages lead to many restaurant employees leaving, which exacerbates the problem.

“There is a vicious circle where people are dissatisfied with the service that can give less tips, then they do not come back and sales go down,” she said.

The restaurant industry has historically struggled with high turnover. The problem has only intensified during the Covid pandemic as employees seek better pay and working conditions, worry about getting sick and have problems finding childcare. The accommodation and food service sectors had a closing rate of 5.7% in May, according to the Bureau of Labor Statistics.

Nicholas said that despite ARP’s recent rollouts of retention bonuses and partner programs, in addition to higher salaries and better benefits, it has been a “battle” to fight the job market.

Full-service restaurants have been hit harder than eateries with limited service by the labor crisis, with staffing down 11% from pre-pandemic levels.

And that means the experience of eating out probably won’t be the same anymore.

“Going to a restaurant and getting them to bring over bread with butter,” said Nicholas Harary, owner of Barrel & Roost, a restaurant in Red Bank, New Jersey, “those days are over.”