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How the Gig Economy is Changing How Restaurants Hire, Manage Their Workforce

April 16, 2019

SmartBrief  //  by Tricia Contreras

A tight labor market, high employee turnover and millennials’ desire for flexible work schedules are driving some restaurant operators to change the way they hire and manage staffers. A growing wave of tech companies are building hiring platforms designed to make it easier for operators and workers to fill open shifts.

“We’re playing with some of the app hiring, but in very linear sense,” Dine Brands Global Chief Information Officer Adrian Butler said during a panel discussion at the 2018 Restaurant Innovation Summit. “At some point, if the labor market and the pool remains as tight as it does now, we’re going to have to break the model of hiring and basically training for several weeks and getting them to competency, and then having them leave six months later. That has to evolve.”

App-based hiring and scheduling platforms can offer an alternative to the traditional model, enabling restaurants to connect with a pool of qualified workers.

The gig model is well-suited to fill the needs of restaurants and hospitality companies, which depend on a workforce that is largely part-time. In fact, just 44% of restaurant employees are full-time/full-year employees, compared to 70% of the total US workforce, according to National Restaurant Association analysis of data from the US Census Bureau’s American Community Survey.

New and emerging hiring platforms aim to help operators tap into this part-time workforce in a more efficient way, narrowing the pool to focus on candidates with the right skills and qualifications. Some platforms cater to multiple industries, but restaurant-specific platforms such as Pared have also started to emerge.

“Shift work has actually been around for a while, but we are seeing a dramatic rise due to the change in consumer expectations of readily available, on-demand goods and services,” said Keith Ryu, CEO of Fountain, a hiring automation platform for the hourly and gig workforce.

Fountain’s software “requires no additional training as everything follows a logical, automated and intuitive path,” he said. “Additionally, because everything is in one place, there’s no need for companies to log into multiple systems or deal with a mix of emails, phone calls or spreadsheets. It’s all in the employer’s personal Fountain dashboard, of which they have full control.”

The company works with restaurants and franchise companies -- as well as other industries including grocery and retail -- to help operators optimize the employee management process from recruiting to scheduling. Its Boost feature helps give job postings an added push to ensure the highest number of qualified applicants, and the software can schedule interviews based on managers’ availability, Ryu said.

ShiftPixy, another tech company that connects restaurants with gig workers, uses an AI-enabled scheduling technology to recognize “shift openings for all positions, from waitstaff to fry cooks, based on the time of day and customer rush that is expected,” CEO Scott Absher said. “When a gap is identified or a worker cancels a shift, the app automatically advertises the open shift to the on-demand workforce in ShiftPixy’s ecosystem. This service provides operators with peace of mind, knowing they don’t need to manually monitor schedules and manage the availability of their staff.”

In addition to helping with hiring and schedule, Fountain, ShiftPixy and similar platforms such as Shiftgig and Hyr assist with managing paperwork so operators can make sure they comply with necessary regulations.

“ShiftPixy’s platform is compliance oriented, helping businesses with numerous employment-related requirements, including those related to workers’ compensation, paid time off accruals, payroll taxes, benefit plans, unemployment taxes and claims,” Absher said. “With the future of the ACA currently in the air and the IRS issuing severe penalties to companies across the country for previous years’ noncompliance, this is an especially critical concern for restaurant operators.”

This focus on compliance will remain essential as rules and regulations around gig workers evolve.

“How we define employees will probably shift moving forward,” Adam Hasley, the National Restaurant Association’s director of advocacy research and insights said during a presentation at the Restaurant Innovation Summit.

“Does the seasonal definition take on a new twist if you have these platforms that you essentially Uber-order a server or Uber-order a chef? We don’t know how that will change the definition of an employee, and if that contractor model will continue to expand,” he said. “We anticipate it will have implications, we just don’t know what those will be just yet."