There is a case to be made that restaurant ownership is going to require a more skilled and knowledgable business owner in the future. Some major regulation changes and other surprising challenges have made their way onto the plates of restaurant owners, and not everyone is going to like the taste of things to come.
The Employment Policies Institute recently published results from a survey and study entitled Paid Sick Leave in Seattle: Examining the Impact on the Service Industry. The Seattle paid sick leave mandate officially rolled out last September and has had some time to make an impression on the restaurant community and service industry at large in the Seattle area. The EPI survey found that more than one third of the respondents have executed on cost cutting/revenue raising measures in response to the mandate, and "roughly 56 percent said it would increase their cost of doing business in Seattle."
Protests have been picking up steam in the Fast Food Industry as the debate over a $15 minimum wage has caused people to take to the streets in Seattle and other cities. Washington State already boasts the highest minimum wage of any state in the country, but part of the cause of this discussion may be the shift in the demographics of our local restaurant industry workforce. The Washington Restaurant Association reports that the percentage of teenagers in the restaurant workforce has dropped from near 20% in 1998 to an estimated 5% today, surrendering to an older, post-recession workforce. An older workforce generally has more liabilities and more obligations, requiring a higher income.
Add in new regulations accompanying the Affordable Care Act coming this Oct. 1, and you have some blustery winds of change blowing through an industry already known for its low margins and long hours. More regulations to comply with and rising labor costs may mean an increase in prices for customers, but coupled with the decrease in the younger workforce, will more restaurant owners change the way they run their business?
Tomorrow's successful restaurants could operate like today's successful professional services companies from an employee management perspective. With the smallest errors seriously depleting already thin margins, will an industry notorious for its turnover focus its attention on stronger HR and better employee management in an effort to reduce turnover, minimize unemployment claims, and decrease hiring and training costs? The money to afford these new regulations and rising labor costs has to come from somewhere. A highly trained, more financially stable, tenured workforce could supply the type of experience required to deliver high quality service - the type of service that could support an increase in customer pricing.
