I tend to eat out more during the holidays. I was surprised to hear several times “It’s going to be a bit of a wait, we’re short on servers today”. Wow! I’m used to waiting for a table, but I’ve rarely heard Servers.

The constraint in restaurants has moved from tables to labor. There are only two ways to fix that issue….add labor capacity or increase productivity. In an era of low unemployment where everyone is seeking employees, this seems like an unsolvable issue. Yet if it’s ignored, all that fixed overhead of real estate and capital equipment will serve itself a healthy portions of your profits.

So, what to do? If you could hire more people you would!

Hiring more people is the brute force method, and paradoxically, it’s the one strategy that continues the cycle of labor shortage for many companies. Rather than solve the problem, it simply shifts the issue to those new employees until they get fed up and leave.

Instead follow these three steps to solve your labor shortage permanently.


Step 1.  Schedule your employees when they are needed.

Sounds obvious, but you’d be shocked at how many people say they do it, but they really don't. If you are shorthanded at times or have people standing idle or slow at other times, you don’t have a labor capacity issue. You have an allocation issue.

How well do you forecast your business? This is one of the areas where machine learning and a digitized economy has cracked the code. If you are forecasting at a day level or simply using a single driver such as sales, you can’t possibly solve your allocation problem.

Your forecast is what should be. Your labor operating model allows you to allocate to it. Labor standards, shift and job design, FT/PT/Gig mix are the next pieces. How much time have you spent on those?


Step 2. Hire employees that want to work when they are needed most.

Once again, sounds simple, but most companies have hiring rates that are significantly higher than their growth rates. That means they are replacing people who quit. If you are replacing employees, then the best place to start is with figuring out why people are losing their desire to work at your company. Even though it’s cheaper to retain than recruit, people don’t do it. Why? Because it’s easier to fill out a replacement job requisition than address the ugly reality of why they are actually leaving.

Are you hiring people that proactively apply and figure if you can get 70% match on the hours you need and the hours they want, it will work out? You can’t hire someone to work days, schedule them evenings and expect them to show or stay. This is a 24x7 world. There is always labor available to work. It’s recruiting the right people for hours you really need.

Did you hire them and then not schedule them the number of hours you discussed? Sounds silly but it happens all the time.

Are you scheduling them in a way that it makes it difficult to manage their personal lives? If you make your inability to deliver a predictable schedule their problem, they will leave and in some locations you will pay a penalty for doing it.

Are you making it easy for them to change/swap shifts when they need to change? When’s the last time your personal plans changed? If you want to be an employer of choice, make their schedules easy to change. This problem has been solved. Check out how this new age staffing agency, MarketSource did it.

Leading companies use charts that compare forecast, scheduled, available, hours worked and results to see where their labor successes and gaps are.

Could you build like this chart below? I can tell you with confidence that a growing number of your competitors can. 

three step labor shortage


Step 3. Empower employees to be successful 

Do you rely on processes to maintain consistency and control or does your culture encourage trust and employee empowerment to make that happen? Woo Hoo! Reap the benefits of employees’ discretionary effort for the right balance! (HBR Podcast illuminates this)

Are supervisors spending more time typing and clicking than spending time with employees and customers? Automate that stuff…c’mon there are robots for that!

Are they inspired by what they do? Work with friends and you’ll have a good time, be creative and productive. #WorkInspired.

Follow these three steps and the labor shortage will be someone else’s problem.

View this Webinar for more strategies to overcome the labor shortage and skill gaps

Published: Thursday, January 9, 2020