In a world
Although ancient civilizations developed along the banks of rivers, the growth of restaurants throughout history correlates closely with the growth of population concentrations, or what we now call cities.
Imagine that, tomorrow, every restaurant, bar, ghost kitchen, street vendor, and food truck in the San Francisco Bay Area would permanently close. Would this San Francisco still be a city? Of course it would. However, within a few weeks changes would become immediately apparent. And after a few months the city would rapidly lose its vibrancy, visitors, and charm. What would happen to tourism? Is it realistic to expect tourists to eat grocery items on park benches, when they’ve been expecting a Pier 39 experience? Cliff House? Bubba Gump’s?
And what about 5 years down the road? Many small businesses would be forced to close and the city would stagnate, losing tax receipts and jobs. Where’s the rationale for paying high rents in a city bereft of charm, let alone eateries? In a nutshell, if you can’t go out to eat, why even live in a city? How many times a year can a person visit the Golden Gate or the Ocean Beach for fun? People around the world synthesize eating into their ideals of pleasure, socializing, and meaning. Severing it from the these ideals is nearly unthinkable- and yet the industry is in a serious decline that shows no sign of abating. In a decade, the San Francisco of this scenario would be utterly unrecognizable as a city.
Patty cake, patty cake
Outsourcing labor has been and will be a reality in many service-related industries. In a globalized America, jobs are often created far from where products or services are consumed. Performed as cost-saving measures and enacted as a hedge against labor uncertainties, outsourcing has worked well. Sometimes. But it’s simply a poor fit for restaurants. Taking an order in Bangalore, baking the croissant in Hanoi, and serving it in Provo takes the point to absurdity. Restauranting is nearly impossible to offshore or outsource; as a face-to-face experience, it is one of the last, truly durable local industries. Digitization has certainly allowed businesses to achieve productivity gains with fewer employees- that can and should be harnessed.
“Restaurants are the last bastion of urban manufacturing and, as such, create a massive number of jobs.” Said Eli Feldman on “Why the Restaurant Industry is the Most Important Industry in Today’s America“. The industry currently employs 10% of the entire US workforce and impacts nearly 10% of the US GDP. It’s the second largest private sector employer in the United States. On average, every $1 million of new spending in hospitality and restaurants creates 15 direct jobs in the industry and another five jobs in other industries.
Automatic, not for the people
However, many restaurant jobs are not enjoyable or productive jobs- even for restaurant owners. Most are low paying, offer scant benefits, and have hazy developmental paths or job security. Profit margins of less than 5% are common, leaving owners to ponder escape routes. Little room for work/life balance makes many of the best people walk because ways to accommodate personal growth or — heaven forbid, a family- don’t exist.
Hospitality- along with personal services, construction, and manufacturing- experienced a mass labor exodus during COVID. This was on top of high, pre-existing unfilled job numbers. Most recent data on US job openings shows a sustained 10% of all jobs in hospitality are unfilled, the highest among all industries. Technology has long been touted as the savior to restauranting and yet the steady stream of Help Wanted signs continues unabated, along with restaurant closures. Help is needed to reshape the foundation of a wickedly difficult- if not broken- business model.
Take this job and…
No restaurant sector in the U.S. escaped from the near-catastrophic effects of 2020–2021. However, the chronic dearth of workers is a pre-existing illness. According to The National Restaurant Association, there was a 144% turnover rate at fast-food restaurants in 2021. In 2016- long before COIVD- it was 61%- and nearly twice that rate for front-line workers. The shocking truth is that restaurants, on average, are losing somewhere around $150,000 per year due to employee turnover alone. The Center for Hospitality Research at Cornell estimates the cost of employee turnover averages $5,864 per person for a typical front-line employee.
The 2022 State of the Restaurant Industry report (National Restaurant Association), found that 78% of restaurant operators don’t have enough employees to support customer demand, with restaurant and accommodation sectors having more than 1 million jobs unfilled. Tellingly, more than half of U.S. hospitality workers wouldn’t choose to go back to their former jobs. Over a third aren’t even considering reentering the industry, according to surveys that underscore chronic hiring challenges for restaurants, bars, and hotels. No pay increase or incentive would make these workers return to their previous workplace, according to a poll of about 13,000 job seekers during 2Q2022 as described on Joblist.
Leaving Las Vegas
Restauranting, as many readers know all-to-well, is not for the faint of heart. Heavy workloads, long (and late) workdays, few meal breaks, demanding customers, decision fatigue, and shift unpredictability contribute to chronic, job-related stress. Stress is the key risk factor in addiction initiation, maintenance, relapse, and treatment failure. Across all occupations the hospitality and restaurant industry reports the third highest rate of heavy alcohol use (11.8%), the highest rate of illicit drug use (19.1%) and the highest rate of substance abuse disorder (16.9%) — all of which far exceed national averages.
Substance abuse is not confined to any specific type of restaurant and can be seen in workers of fast food, casual, and fine dining restaurants. A recent study examined substance use in Michelin-starred kitchen staff throughout Britain and Ireland, finding that alcohol and drugs are commonly used as a means of self-medication/stress reliever and as a coping strategy for most chefs- regardless of their ranking. While alcohol is primarily used to unwind after a grueling workday and to cope with harsh working environments, in restauranting drugs and other substances are mainly used to maintain or improve performance.
Managed well, short-term stress enhances mental/cognitive and physical performance. It helps us prepare the brain for challenges and stimulates immune response. However, the distinguishing characteristic between beneficial and harmful stress may well be duration. Long-term stress has potentially become the largest work- related problem in the restaurant industry.
What can be done? An overdue, system-wide evolution of the restauranting experience is required, one that can identify- real-time- personal stress points and operational factors that erode positive experiences. Of everyone in the restauranting chain.
Danger, Will Robinson
xBlock examines the possibilities of using artificial intelligence for early detection of work-related stress. We are developing an intelligent Employee Experience Platform leveraging artificial intelligence, machine learning, and deep learning. We support employees’ ability to cope in high stress operating environments and to enable early-stage identification of specific factors that cause stress. Timely support measures aimed at reducing employees’ stress factors are designed to operate in a nuanced-yet-clear manner, increasing their professional resources and improving the working culture. Because burnout is preventable.
No doubt detecting harmful stress accurately is challenging. Each of us responds to differently to stressors and restaurant operating environment stressors vary widely. Therefore, the most accurate identification cannot be achieved by using general stress models based on multiple people’s data; instead, we intend to use individual modeling methods.
As the signs or symptoms of work-related stress can be physical, psychological, and/or behavioral, we plan to obtain data from the use of a smartwatch and smart glasses, both of which monitor each employee’s heart rate variability, blood oxygen, stress level, steps counting, and patterns in voice-to-voice interactions, to detect the stressors. When the data is modeled using algorithms, anomalous behavior patterns and employees’ state of stress can be identified as a deviation from healthy responses.
Armed with the information it generates, we intend to connect every second of data from the wearables with the xBlock restaurant performance platform, then pair the stressors with that specific task, in real-time. Work-stress detected will then be identified, categorized, and visible.
Customizable labels such as “heavy workload”, “flaw in operation”, “environment stressor”, can be assigned. Allowing for different employee responses, the system acknowledges the human-ness in each employee…because no one person responds the same exact way.
Fries with that?
Ultimately, restaurant leadership needs powerful, easy-to-operate tools to make the right decision at the right time: to improve workplace culture, to help employees derive satisfaction from their profession, and to improve the health of a clearly debilitated industry.
This project is designed to develop reliable, repeatable methods for long-term monitoring of restaurant employee stress levels, where the demands of privacy, information security and legislation are seriously debated and incorporated. Restaurant managers with access to xBlock’s Employee Experience Platform should see improved productivity, but not by outdated, quantitative methods: instead by harmonizing people, processes, and timely stress detection. In an era of workplace upheaval, restaurants that create tailored, authentic experiences should strengthen employee purpose, ignite enthusiasm for the practice, and elevate organization-wide performance….retaining and exciting the best people, creating value and maintaining a competitive edge as they do so. Entry level or last resort no longer: restaurants need to become an industry of choice for future workers.
You are the body electric
“Over the course of the 20th century, developed economies of the world evolved from industrial to knowledge-based. We are at another watershed moment, transitioning to human economies — and the shift has profound implications for management. The know-how and analytic skills that made employees indispensable in the knowledge economy no longer give them an advantage over increasingly intelligent machines. But they will still bring to their work essential traits that can’t be programmed into software- like creativity, passion, character, and collaborative spirit- their humanity, in other words. The ability to leverage these strengths will be the source of one organization’s superiority over another. It hints at how fundamental the commitment to humanity must be in a company.” Seidman, Dov. “From the Knowledge Economy to the Human Economy” HBR, November 12, 2014.
We believe that in the coming years, investment in employee well-being will become mandatory in those industries straining for labor stability. By this process, allegiance and productivity at the individual, organization, and society levels are at stake. The era of productivity metrics at any cost has past- experience now drives productivity. Time for its due.