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Restaurants offer signing bonuses to new employees amid a labor shortage

Philadelphia Inquirer logo Philadelphia Inquirer 5/1/2021 Michael Klein, The Philadelphia Inquirer
a man standing in front of a building: Larry and Roxane Maggio outside Ludovico's Deli in Haddonfield, which they have closed after 10 years because of a labor shortage. © ALEJANDRO A. ALVAREZ/The Philadelphia Inquirer/TNS Larry and Roxane Maggio outside Ludovico's Deli in Haddonfield, which they have closed after 10 years because of a labor shortage.

Larry and Roxane Maggio were preparing their final catering orders this week at Ludovico’s, their deli in downtown Haddonfield. Now, after 10 years, they have closed — “and not because business is bad,” said Roxane Maggio.

“We just can’t find anyone to work,” she said.

As the restaurant industry recovers from the depths of the pandemic and looks forward to next week’s rollout of the $28.6 billion Restaurant Revitalization Fund, it is facing a new challenge: staffing.

A labor shortage — slamming businesses as vaccines have emboldened patrons to begin to return — has forced closures, delayed openings, and curtailed hours in all sectors of the food world. Everyone seems to be short-staffed — fast-food eateries, deli counters, chain restaurants, fine-dining restaurants.

Where one restaurant needed one or two cooks to handle a fraction of the business in 2020, they now many need five to seven, said Alice Cheng, founder and chief executive of Culinary Agents, a national hospitality-staffing firm in New York. The workers just don’t seem to be out there. “It’s next-level urgency,” she said — and in an industry known for high turnover.

Get a job, get paid

The shortage of applicants — which seems counterintuitive, given the mass layoffs and closings in 2020 — has inspired creativity and opened wallets.

Some have raised salaries. Some are offering signing bonuses and incentives.

Starr Restaurant Organization is offering $300 to new hires at some restaurants in Philadelphia and New York City, including Parc and Barclay Prime. The sports-bar chain Chickie’s & Pete’s served its signature Crabfries and soft drinks and offered $200 bonuses at a two-day job fair this week as it seeks to hire 200 workers at 14 locations. The Sabrina’s Cafes are offering $100 referrals to current employees who bring in newcomers.

The King of Prussia District has put up $20,000 in signing bonuses to be shared among 29 restaurants at a May 4 hiring fair that wants to hire 350 employees. The first 65 people to accept a position will be eligible for $300, paid in two installments. Wawa is offering $500 in some job categories, while another convenience chain, Royal Farms, is offering $500 bonuses and $300 referrals at certain locations, including Magnolia and Marlton, N.J.

In some cases, these sought-after workers left the industry in 2020 for other fields. Restaurants also are competing against such retail and service companies as Amazon, also on a hiring binge.

Tonya Breslow of Mis En Place, a Philadelphia-based restaurant-staffing firm, said the shortage could spur a long-anticipated paradigm shift about compensation. Wages have not kept place with inflation. The $15-an-hour minimum wage that many companies are offering still amounts to $31,000 a year. It’s a good start, she said, but potentially a hardship for smaller restaurants with tighter profit margins.

That can only mean a rise in menu prices — something that has been long overdue.

What’s fueling the labor shortage?

Some employers, like Roxane and Larry Maggio of Ludovico’s, believe that many prospective workers are content to collect unemployment compensation, which has been extended through September.

Cheng, of Culinary Agents, calls restaurant workers, as a group, “some of the hardest-working people out there. Still, if they are collecting, it buys them a little bit of time to make a decision” about their next job move in a market that favors the worker.

Some workers who hesitate to return have cited the stress of dealing with customers who balk at mask-wearing and complying with health guidelines, as well as kitchen working conditions. “It’s 90 degrees in the summer in our kitchen,” said Larry Maggio, “and we’re wearing masks.”

Larry Maggio said the labor woes began shortly after a three-week shutdown in spring 2020. This year, when he and and his wife tried to hire cooks, they got nine applicants with only one who followed up — and then politely reached out to say he had taken a different job. As much as the Maggios love their customers, “we just couldn’t go on,” Roxane Maggio said. Not surprisingly, the Maggios’ three employees have jobs lined up.

Jill Weber has had to delay the full opening of Sor Ynez, a stylish spinoff of her popular South Philadelphia BYOB, Cafe Ynez. It opened in March for only takeout and delivery, with a fully staffed kitchen. But its location in an emerging section of Kensington is holding it back for now, even though it has a parking lot. On some busy nights in the city, the delivery apps — which are facing their own labor shortage, as Weber pointed out — will shut off Sor Ynez’s service because drivers prefer to work in neighborhoods that have many restaurants, in the interest of efficiency.

Without more staff, she cannot offer full outdoor seating, much less offer indoor dining. But it’s a Catch-22. Waiters want to work in a busier restaurant to earn more tips. Weber said she looked at the idea of offering bonuses, “but what about staff that’s already there? We do what we have to do. I give them what they want. We offer health insurance and well more in hourly wages than other restaurants.” To solve the issue, she is hoping that workers will “make that leap into the future” with her and “believe in what we do.”

As for the Maggios, they are seeking a buyer for Ludovico’s and are looking forward to taking time off. “Before COVID, we only took off 20 days a year,” Larry Maggio said. “Now we can relax.”

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