2025 Restaurant Workforce Management Report Overview with Jordan Boesch (Ep 234)
Jordan Boesch returns to the podcast to present 7shifts’ 2025 Restaurant Workforce Management Report. Sitting down with Jaime Oikle, they explore the collective feedback of more than 900 restaurant managers about employee needs, wages, and retention. Discover how to overcome the biggest hiring challenges, keep up with the continuous growth of QSR dining over full-service dining, and navigate the ever-evolving culture of tipping. Jordan also shares insights on how the restaurant industry must transform alongside the new technological innovations and remain optimistic despite the rapidly changing trends.
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2025 Restaurant Workforce Management Report Overview with Jordan Boesch
I have a great episode for you. I've got Jordan Boesch, CEO of 7shifts. Jordan is a repeat guest. We recorded a great session a while back. Folks should find that episode on the site. It's episode 220. It's entitled What Makes A Great Restaurant Culture. Jordan, that was a terrific episode. We covered a lot in that one. We brought you back because you did a great report that you put out called The Restaurant Workforce Management Report. We're going to talk about that and focus on that. Tell me a little bit about how it comes together and we'll dig in.
At a high level for folks who maybe don't know about us, we provide operators with a labor-management platform for hiring, training, scheduling, paying, and retaining. Folks mostly know us for scheduling, which is one of our core products and we’re branching into payroll. The reason you wanted to give a little bit of background is that we deal with so many operators within our database of 50,000 restaurants. It's important for us as we build products, try to help this industry, and arm them with great tools that can help them win. It's important for us to understand how they're thinking.
The best way to do that is to go into our base and pose those questions. At times, go outside of our base and talk to industry leaders, whether CEOs of other restaurant brands or CEOs of other tech companies that are servicing restaurants. There's a constellation of various individuals that help inform some of these reports. We want to be able to be the platform that can provide necessary information on what the best operators are doing and what they're thinking about. We want to provide that to our base of restaurant customers. It's important that we raise the water for everyone if we can. That's what excites us and why we do it.
Understanding The Industry Growth
To echo Jordan's comments, they do a lot of extra stuff for the industry. There are blogs, reports, case studies, and so forth. They invest a lot to make sure that folks have the information they need. I appreciate that. We try to do some of that as well but you guys do a terrific job as far as that goes. I went through the report. It is terrific. There's a lot of key findings in there. Let's walk through some of them. You start by pointing out that the industry is growing but growing in different spots. What'd you see?
In terms of the industry growing, the COVID days were a very painful time for operators. The restaurant industry added over 200,000 jobs in 2024 and QSR dining specifically has grown by 4%. We also saw a little bit of a decline in the full-service sector. What a lot of folks are saying as to why the QSR sector has been growing is as COVID hit, we did see an uptick in folks doing delivery and more things that were a little more off-prem. Things are changing but one thing's for sure. People still love eating in restaurants. The job market is healthy and growing.
People still love eating in restaurants. The job market is healthy and growing.
Big Challenges With The Hiring Process
As a family, we have three kids. We eat out a tremendous amount and we're not alone. Every place we go seems to be busy. When people say, “How's the economy doing,” I go, “I don't know. Every restaurant I go to has been busy lately.” We have shifted our spending to a lot more QSR because it's fast, convenient, and a little bit more budget-friendly on the wallet than some other folks. That trend is where it's at. Hiring is always a challenge for restaurants and continues to be a challenge. What do you see in the report?
This is not so different than reports that I had seen that were externally published years ago. The number one challenge for 51% of restaurateurs was hiring. When we did this report, 30% of operators cited that recruiting is their top challenge while 27% pointed to retention as a top challenge. If we look at the quality of applicants that we asked about when it came to hiring, 39% of these operators say that it's better compared to the previous years and 38% didn't see a significant change.
One thing's for sure. This is a problem and challenge for operators that is not going away. It's largely gotten a little bit harder. When we asked folks to characterize even how they're feeling about the labor market, 65% of these operators characterized the market as tight or very tight. What comes out of that is our people getting creative to attract the right people to their operation.
More to even reference our report from 2024, our people are taking some of that information around what employees want and thinking about incorporating that in their culture and hiring process, and how they run their business. There's still room to change here, evolve, and grow from an operator perspective but the data was unchanged as it relates to the challenge of hiring.
Tips And Tactics On Culture Building
If you add those two together, the 30% recruiting and 27% retention, that's a gigantic concern because those are connected concerns. They were saying that over 50% of their concern is around people and that is a giant number. I’ll hint back to episode 220. We talk a lot about culture-building opportunities to recruit and retain. That's where a lot of opportunity exists. If you have a culture that brings people in and makes them want to stay, you don't have to fight the fight as strongly as other people. The report hinted at a few other ways to do that. I see training and development as one of them. Have you seen other tips and tactics to strengthen the pull and the magnet to stay?
To reference the 2024 report for a brief second here, flexibility remains that key advantage for folks who are working in the sector. Folks who can align with the availability needs of the workers and marry that to their business needs are going to come out on top. It first comes back to understanding your business needs. You need to understand your business needs first and then you can map the worker expectations against your business needs.
Flexibility remains the key advantage for folks working in the hospitality sector. Businesses that can align with the workers’ availability needs and marry that to their business needs will come out on top.
When I say understand that, I mean people forecast your labor and sales, understanding when you ebb and flow. 7shifts can help with that but there are a number of other things that can help with that as well. You mentioned training as a big one. Yes, employees do want in-person training but I also think that they want to grow, learn, adapt, and get better at what they're doing.
In the process, be able to articulate what that growth trajectory could look like. What do you want to be? Do you have aspirations to become a chef? Great. We'll start you on the line here and we're going to move you up. Here's what it means to perform. Having that clarity, even in the interview process is going to help operators hire better people. People have the same values as them as well. Training is very important. It can't be understated.
You can go down the list of things like what types of benefits this restaurant provides, whether it's child care or mental health support. Some restaurants do offer these things that are huge wins for some of the employees working there. A big part is understanding why your people stay with you. What is the reason they stay here? Maybe even think about more tactically reverse engineering those things and qualities of why they stay and use them to help attract that next bunch of folks that you want that are going to align with how you operate already.
Maybe you need to make some improvements. Maybe your employees want certain things. Maybe you can give on some but you can't on others. Operators are putting a stake in the ground and saying, “Here's how we run our business. Here are the benefits we provide. Here's what you're going to get out of working here.” Being clear about it are the ones that are going to stay on top.
The Importance Of Providing Mental Health Care Support
I love everything you said there. You hinted at Section 3 in your report with some of those aspects of employees and what they're looking for. You've already touched on those. Healthcare is starting to come. 401(k)s are starting to drip into restaurants and people like those benefits. One of the reverse findings on that side was that 69% of respondents still don't offer anything in that bucket or category. There's no mental health support, opportunities for child care, and all that. It's something that hasn't crept in deep into restaurants. Do you think it will down the road? Are there operational dollars to make those benefits happen as they do more so in traditional corporations? Do you think it will get there?
The mental health support, to some degree, is the table stakes and included in some level of benefits there. Mental health is such a rampant issue within hospitality. Pair that with these workers who are working shifts around the clock. It's a tough industry to work in and one that doesn't pay a whole lot generally. If you are a smart operator, you understand the value of a worker and what they contribute to your business. You want to retain them for as long as possible.
It starts with understanding if there are folks who would benefit from mental health support in your organization and be able to start maybe in a small way, offering that and seeing what types of responses you get. Understanding the cost of something like this is important but it's not always quantifiable out of the gate. You may offer some benefits like this and it will cost you as an employer but what if it improves your retention by 3 or 4 times?
What's the cost of having to go back on the market and hire another person every three months? It's costly. It's $3,500 to $5,000 to replace someone who leaves in the hospitality industry. What is it worth to you to keep them for double, triple, or maybe longer the amount of time if you offered some of these benefits? Going through that exercise and being thoughtful about that will hopefully give you a better understanding.
Dramatic Changes In Wages
Let's go to the fact that restaurants are paying more. Wages are sneaking up everywhere. West Coast has gigantic wages. It’s the same thing on the East Coast. You point out that the South is a little bit lagging but what are you seeing with wages? How are people dealing with it? It's creating some dramatic changes.
From what we saw in our report and findings, the wages went up on average from $13.64 an hour to $14.20. If you look at that, it's about a 4% increase. It's good that it's increasing but if you factor in inflation, it's not increasing a whole lot. Inflation was close to 3% in the US. We still have some work to do here. It’s not anything to celebrate in a big way yet. There is some momentum. Some states and regions are doing it better than others that we have seen.
Cincinnati grew their wages by 7.37%. You also had North Carolina where wages were up 5%. There are a few outliers where wages did increase but by and large, some of them didn't even keep up to inflation. San Antonio and Dallas were 1.5%. There's still work to do as it relates to thinking about wages in the hospitality sector. Ultimately, we all want to make sure that businesses can thrive and employees are happy. They're paid fairly and they want to work within the industry. We've got more to figure out certainly.
I’m going back and looking at the summary part that references the wages piece. We talked about in our previous episode and a little bit here that people want more than just pay. They want a place where they believe in the mission, where they feel challenged, and where there's growth. You have those ancillary benefits like 401(k)s and healthcare. Those can change people's decisions. In our family's case, starting a 401(k) years ago and putting a little bit of money in there has been one of the best things for us. That has grown dramatically over the years.
An employee may say, “I'm just starting out. What’s $100 a month going to do for me?” It doesn't feel like anything but those things can benefit and compound. Adding those into the corporate structure of restaurants is a challenge but if we can get there and help people grow their resources over time, that's an important benefit. I'm sure that's part of what you do at your company. A lot of companies do it. I don't know if it's going to make its way into restaurants today or tomorrow in a big way. What do you think?
We’re seeing it in some restaurants. It depends on to what degree but certainly, other ones are incorporating some of these benefits like 401(k) that allows you to transfer it between your workplace, which is pretty helpful. We are seeing some folks doing that. I would expect that that becomes a bigger competitive advantage over time.
How fast is that going to be adopted? It’s probably another question that I don't know the answer to. Given the hospitality industry and the speed at which it moves, it’s probably not fast enough. I do think the operators who are standing up, talking about that, and touting it are not having the same challenges that others are having when it comes to hiring.
The Culture Of Tipping In Restaurants
Tipping. Everywhere I go, it’s like, “Let me turn this around. Can you give me a tip?” It's gotten so wild over the last little stretch. We're used to sitting down in a restaurant and giving a tip and sometimes at a coffee shop. Tipping culture has gotten to where it feels like everybody wants a tip everywhere. Did you specifically report on that aspect of it or tipping in general? What do you think?
We asked about how tipping has evolved for some of these operators and if they've made any changes to their tipping algorithms or models. Sixty-three percent of operators said that they have not changed their tipping models. They've stayed the same. One thing that stood out was employees are much more knowledgeable and interested in how the money gets to them and want more of that transparency. They're looking at their stubs and looking for discrepancies.
Employees are much more knowledgeable and interested in how money gets to them. They want more of that transparency.
Through the 7shift app, we do tip payouts. We send the tips directly to the worker's bank account so that they can see it all through the app, whether it's on payroll or directly. As a company, we've got a lot of great feedback around that level of transparency around it but we're seeing more of it. It's not something that I would anticipate going away. I am getting tips on a bunch of things that I've never been asked to tip for like I'm getting a smoothie or something. There's a variety of things in an establishment that I visit and they're asking for tips. It’s a bit anecdotal but I would assume that that's prevalent in most places.
How Restaurants Are Dipping Their Toes Into New Tech
Let's go to your wheelhouse. You are in the tech space. A big part of your finding was restaurants continuing to invest in technology to make it easier. Even the thing you pointed out about tip management and transparency, that's a big change that didn't exist X number of years ago. What else are you seeing in tech? What are people looking to dip their toes into that they're not already in? What's coming down the pike?
I was shocked when we asked operators this question. “How many of you are adopting new technology to improve efficiency, labor challenges, payroll, tip management, and all the good stuff?” It was something like 65% of restaurants adopt some level of this type of technology, which is great. Although 27% still manage schedules on paper and 23% still manage them in Excel. There's still some room to go. There's a big chunk here that is still managing it in other ways from a pure scheduling perspective, not a generic, holistic tech adoption perspective.
We are seeing positive momentum and change, and folks moving towards using some tools like this. It relates to attracting workers and managers. Managers are going to want to use tools to help them manage their teams. If they're accountable for hitting labor numbers and sales goals, how are they supposed to benchmark themselves against that if they don't have the technology to do that?
We're seeing a big uptick in that. We're also seeing more folks move from point solutions to more connected platforms. In our case, since we do more of the broader HR platform, we are seeing folks who buy payroll from us who have been previously scheduling customers. They’re attaching more of that workflow to try and make things more streamlined and easy for them.
I don't think that's a trend that's going to slow down. People want less technology and more streamlined integrations when it is a separate piece of technology. They want it to be easy. They want it to get out of the way and have it done for them. The companies that can build those connection points and streamline all of those pieces well are going to have a leg up.
Why More Operators Want To Work Closer To Home
There are so many opportunities inside of the technology stuff you and other folks do. Restaurants are fighting for pennies. If you want to go from 5% to 10%, you're not going to do it magically. You're going to probably have to find technology to find those extra pieces of your margin. It's not going to appear by itself. One of the other parts you did in the report was neat. You got some other tidbits from operators. One of them I thought was interesting. It reports that a lot of folks are looking for jobs closer to home. I found that interesting. What'd you see there?
As it relates to this one, this one didn't surprise me as much. The reason it didn't was some of these workers don't have cars. That commute time is painful. When the pandemic hit and people worked from home, they started to go, “I don't want that commute time back. That was an hour out of my day 1 way so 2 hours in 2 ways where I could have been more productive and done the things I need to do.” You're not getting paid to commute. It makes sense for a lot of these folks to look at opportunities that are closer so they can walk and ride their bike. There are different ways to get there so you can have more productivity in your day overall.
Rising Interest On Pulse Checks
The other one I thought was interesting. Folks seem to be taking more of what you reference here, pulse checks or employee surveys to figure out what their people are thinking and feeling. Any thoughts there?
We had a restaurant customer bar called Gusto with fourteen locations. Danielle, who's one of the managers there said, “If we see people are leaving around the 6-month mark, we'd implement a 120-day survey to get a pulse on how they're feeling and take a more data-driven approach on retention.” This is an example of being more proactive around how folks are doing. Restaurants are changing all the time and they're putting in different practices or hiring different people. Certain things start to shift and feel different. It's important for operators who are maybe not on the ground level every day to keep a pulse on this.
The more you can pulse your workers and understand how they're feeling and what their needs are, the better. Some of these folks do this through the 7shift product and the 7shift feedback tool, where we prompt them after their shift to ask them how it was. They select a happy face or a sad face and write some comments. Whether or not you use technology to do that, I can talk to an operator to ask his employees to write things on a piece of paper. They can drop it in a box. It can be either anonymous or they can write their names on it. It doesn't matter. What matters is that feedback makes its way to the operators so that they can action it.
The more you can pulse your workers and understand how they feel and what their needs are, the better your business will be.
An Optimistic Look Into 2025
The good old feedback drop box is always a good idea. Anything we didn't hit on in the report that you want to highlight? Anything looking forward ahead into 2025 you want to talk about?
As we even approach 2025 as a company, I feel very optimistic and excited about some of the things we're doing for operators but as it relates to the report, it sounds like restaurant operators feel a similar way. Sixty-seven percent of managers were optimistic about what 2025 holds for the industry. A bunch of them see opportunities to whether you offer certain benefits to their workers or exciting changes you want to make around how they attract people. I thought that that was an exciting thing to hear that nearly 7 out of 10 operators or managers are optimistic about 2025. It makes me even more optimistic.
You gave a number of good book recommendations in that last episode. What's anything new that you're reading? What's on the bookshelf?
I'm reading Extremely Hardcore. It's the Elon Musk taking over Twitter story and more like a crazy drama story that's a real-life story that I wanted to understand a little bit better. The other one that I'm going to start shortly after that is Steve Jobs’ biography. That's what I'm reading.
Are you going to do the Walter Isaacson version of Steve Jobs?
That's the one I have.
Link To The Report And Closing Words
I don't listen to books often but I listened to the Jobs book a couple of years ago. It's terrific. I picked up Isaacson's biography of Musk which I'm just starting. I'm looking forward to digging into that. He had an interesting background growing up. It’s interesting stuff. Tell them where to find the reports. Give them the website and any socials. Anything else you want to share?
To find the 2025 report, you can go to 7shifts.com on our blog. It should be at the top there. You can also google 7shifts 2025 Report. You should find it. We've got an offer for payroll. If folks want to try that out as well to connect more of their workflows of scheduling, sign up at 7shifts.com for that as well.
It’s always good. Jordan Boesch of 7shifts. You can find them on the web at 7shifts.com. For more great restaurant marketing, service people, technology tips, and more, tune into us. In the meantime, please do me a favor. Hit the like button and subscribe. Review us and rate us. That stuff helps spread the word and we do appreciate it. We'll see you next time. Thank you, Jordan.
Thanks, Jaime.
Important Links
- 7shifts
- What Makes A Great Restaurant Culture - Past episode
- 2025 Restaurant Workforce Management Report
- Jordan Boesch on LinkedIn