Fanning the flames in the restaurant industry
Shutdowns and restrictions may have struck the match, but the local restaurant industry’s deeply rooted problems were grease on the fire. And as staffing struggles hit an all-time high, fewer people are in the kitchen to tend to the flame.
Out of control.
That’s how Patrick O’Halloran feels during shifts at Lombardino’s when orders are piling in, diners are crowded around the bar and other customers are lined up out the door waiting to be seated. He’s just trying to keep everything moving forward. As a restaurateur with decades in the industry, O’Halloran is comfortable with chaos. Busy dinner rushes, covering for someone who didn’t make it into work, running out of a menu item or some other unexpected hurdle — they’re all part of the job.
But this is different. Once COVID-19 restrictions were lifted in June and dining rooms could operate at full capacity again, customers came back in full force while the staffing shortage continued. Staffing issues predated the pandemic, but it only got worse in recent years. O’Halloran went from 12 cooks to three at Lombardino’s, and he has a smaller front-of-house crew. Many nights, he’s working the line, something he hadn’t done for years, as his business partner, Michael Banas, expedites or manages the salad station.
“There’s days where we are just … so busy that I cannot vouch for every plate that went out,” O’Halloran says. “I told the staff after the shift, these are the only days where this restaurant is making a profit. Every other day, we’re paying the bills. It’s a crazy way to make a living.”
Some could argue the restaurant industry has always been a “crazy” way to make a living: working a very physical job with long hours during times when most people are off, like nights, weekends and holidays. As an owner, you’re operating on notoriously thin margins. As an employee, your wages often depend on the volume (and whims) of customers. Inequities in pay and treatment are rampant. Emotions run high, and mental health and substance use issues can be very serious concerns.
When the pandemic hit, the industry’s existing challenges rose to the surface while new difficulties emerged. Restaurateurs grappled with managing additional health and safety concerns, navigating through the red tape of Paycheck Protection Program loans and laying off employees while the doors were closed for takeout only, but then trying desperately to hire them (or anyone) back to cover the resurgence in dining once restrictions were lifted.
Without question, the local food industry is facing a reckoning. Issues that have continued to pile up over the years — like order tickets piling up in a busy kitchen — have all played a role in causing industry leaders, workers and onlookers alike to take a step back and consider how to move out of the maelstrom.
Attempting to Bounce Back
Restaurant owners — including O’Halloran, part owner of both Tipsy Cow locations and Lombardino’s — are frustrated with trying to hire. Lombardino’s has provided fairly hefty benefits packages (which include health insurance, disability, days off on major holidays, daily meals, one shift a day and 401(k) accounts) for the past 15 years, but O’Halloran says they don’t seem to be making much difference in the current market.
He’s grateful for the staff he’s been able to retain — many have stayed for a decade or longer. But O’Halloran also lost a kitchen manager who had been with him for 17 years. “He just left to take another job; he wouldn’t tell us [where he was going],” he says, adding that a number of kitchen staff left during the pandemic to take jobs in other industries and are unlikely to return.
Because of the increased demand and fewer staff members, Lombardino’s has changed its hours of operation to Thursday through Sunday (pre-pandemic, Lombardino’s was open seven days a week), and they’re still not seating to full capacity. O’Halloran fears adding more days to the schedule will burn out what little crew he has left. “Those are the things that keep you up at night, knowing every day there might not be enough people to get the job done,” he says. “I can’t say enough about the crew that I do have in the kitchen right now. … Everybody was positive and showed up every day ready to go. That’s been a blessing. It’s just now we need to add double that size of staff to get back to where we were.”
Kristine Hillmer, president and CEO of the Wisconsin Restaurant Association, says cutting back days and hours of operation is a common tactic right now. Restaurants are also paring down the menu and eliminating time-intensive items to cook, Hillmer says.
“They’re working really, really hard to do the best they can in order to retain those great employees,” says Hillmer, adding that restaurants’ priority should be taking care of current staff to help avoid burnout. “They need to make sure the culture in which they’re working is a healthy and supportive one. … [There’s] nothing harder than having to replace someone who already knows your systems.”
Madison is not immune to the bad behavior that can lead to an unhealthy workplace culture. Just as the dining scene’s bounce back was looking hopeful with the onset of spring and universal eligibility for vaccinations, headlines described the belligerent and toxic behavior of Patrick Sweeney, co-founder of Rule No. One Hospitality Group and co-owner of downtown restaurants Lucille and Merchant.
Sweeney was arrested in April. Afterward, former staff members came forward to share concerns about Sweeney’s actions at the restaurants toward employees and customers. After the news broke, Joshua Berkson, the president of Rule No. One Hospitality Group, announced they removed Sweeney from all roles within Rule No. One and divested his ownership. In addition to removing Sweeney, Berkson added a mental health service that provides free therapy to employees. “In my years in this industry I’ve seen too many lives lost and damaged due to inadequacies in mental health support. The number of individuals I see hurting has been exacerbated with all the challenges of this past year and especially in the last few weeks as our industry is in turmoil and transition,” Berkson said in a Facebook post in April.
More recent headlines involve a customer who left no tip on a fairly high check total — only a note saying that “service was good but we don’t tip sinfull [sic] homosexuals.” There was at least a feel-good response a few days later when local nonprofit Do Good Wisconsin stepped in and tipped that same server $4,500 accumulated from about 250 citizen donations. Eric Salzwedel, the co-founder of the nonprofit, donated an additional $295 to The Trevor Project after more donations came in. The server requested that the rest of the donations go to the organization, which is focused on crisis intervention and suicide prevention work for LGBTQ youth.
Bad behavior, coupled with the general anxiety of people who want to “get back to normal,” has left restaurant staff exhausted and beleaguered. Those who remain are covering for the ones who never came back. According to the Wisconsin Department of Tourism, the hospitality industry lost about 20% of its workforce during the shutdowns, and Hillmer fears it’s a permanent loss. The restaurant industry was forced to hit pause at the onset of the COVID-19 pandemic, and other industries picked up the talent. In its 2021 State of the Restaurant Industry Report, the National Restaurant Association said the eating and drinking sector ended 2020 with nearly 2.5 million fewer jobs than it had prior to the pandemic.
While diners might assume a busy dining room means a restaurant is back to normal — or may get frustrated if they’re not seated despite seeing empty tables — Hillmer says these situations may not be as they appear. She says it could take until 2024 for restaurants to recover, but it may be later depending on variants.
“It’s not that they don’t want to seat you, it’s that they don’t have the staff to provide the kind of customer service they want,” Hillmer says. “People are expecting a light switch to be flipped. … That expectation is just not reasonable.”
José García and Elizabeth García Hall, general managers and proprietors at the Food Fight Restaurant Group’s stalwart Hubbard Avenue Diner in Middleton, have definitely felt the pressure to “flip the switch.” Like many establishments, Hubbard introduced online ordering and third-party delivery as a way to boost sales during the pandemic. However, now that the dining room is back to full capacity and takeout orders keep coming in, it’s a challenge to keep up with both.
“To have full service, curbside, online orders, third-party delivery — it’s just too much,” García says. “[During the] pandemic, all of those were a nice addition to your sales, but now you can only function as much as the kitchen can keep up.”
“I absolutely respect that people aren’t comfortable dining in, but we can’t handle that amount of volume,” adds García Hall. “We’re grinding people down. The hours are intense. [It’s] super demanding. What keeps me up at night is that balance of taking care of everybody.”
The National Restaurant Association found that restaurants were hit harder than any other industry during the pandemic. At the start of the year, its report said 62% of fine dining and 54% of family and casual dining operators had staffing levels more than 20% below normal. While many point to the attractiveness of the unemployment wage as a contributing factor to the hiring issue, it’s not that simple. For many workers who are parents, trying to find child care or manage virtual school has been keeping them at home.
The labor shortage goes several layers deeper than the pandemic, says Hillmer. Even though one in three Americans had their first job in a restaurant, as noted by the National Restaurant Association in April 2019, today’s teenagers are often too busy with sports and/or academic schedules for a part-time job. On the other side of it, many baby boomers have aged out of the industry into retirement or a less arduous profession.
The Power of Benefits
As restaurants evaluate what they can do to attract and retain more talent, one area they’re exploring is benefits. The industry has a reputation for offering inconsistent or little to no benefits. Organizations like Food Fight have an advantage in buying power, which opens up doors for better perks and more support. Being under the Food Fight Restaurant Group umbrella has been critical for the management and their employees at Hubbard Avenue Diner, according to García and García Hall.
Through Food Fight, all employees accumulate paid time off, regardless of how many shifts they work per week. Employees who work an average of 30 hours per week qualify for benefits such as health/dental/vision insurance, education reimbursement and subsidized bus passes. Food Fight also offers an employee assistance program that provides free counseling to all employees and “anyone they love.”
Until recently, when their restaurants were able to operate at full capacity again, the company waived the minimum hours required for benefits. If you were qualified pre-pandemic, you maintained your benefits regardless of hours worked during the pandemic.
This was a huge relief for a 32-year-old employee at Hubbard who suffered a heart attack in April 2020. He was able to keep his insurance while he received care and recovered. Now he’s worked his way up to three four-hour shifts per week. “Food Fight has been by his side the entire time to say, ‘We’ve got you covered,’ ” García Hall says. “That means a lot.”
With a workforce of more than 1,000 at the start of the pandemic, Food Fight furloughed 750 workers when the Safer at Home order was implemented in April 2020, according to CEO Caitlin Suemnicht. However, Food Fight did hire back 150 employees in June 2020 when the order was lifted, and it currently has about 770 workers. Employees who were laid off but then accepted the initial offer to return to work were immediately eligible to re-enroll for the insurance coverage in which they were previously enrolled, and employees were provided paid time off based on their original start date.
Since layoffs led to many workers pursuing jobs in other industries, they’ve gotten a taste of what else is possible. While there are reasons beyond tangible benefits that draw people into restaurant work, the industry will still need to find ways to retain good talent.
At the Forefront
Nancy Sorensen got her first job waiting tables at Gino’s on State Street in 1985 while she was still a student at the University of Wisconsin–Madison. For her, the benefit was having “a job that could pay the bills and be flexible around scheduling,” notes Sorensen, who remembers finding the position fun, fast-paced and fulfilling.
Even now, there is passion and enthusiasm in her voice as she talks about how working the floor is like a performance of sorts, equal parts physically demanding and intellectually stimulating. One of the highlights of her career was providing service during L’Etoile’s 40th anniversary.
“We believe in the food, we believe in feeding people, we believe in creating an experience for someone,” says Sorensen, who currently works at Fairchild. “There is a lot of really wonderful energy every time you’re going into the restaurant. That’s a relationship that you’re building. That’s what I love to be a part of.”
But she’s also seen the industry go through many different transitions in her 36 years in the profession and has experienced the darker side of dining. The balance can be thrown off by either the server or the customer. Sorensen recalls one graduation weekend, a notably chaotic time for Madison restaurants, when a diner with a food allergy switched spots between placing an order and the food arriving at the table. The misstep was noticed before anyone ate anything, but both Sorensen and the diner were understandably upset.
Sorensen understood the customer-service commitment when the owner immediately sided with the diner, but it still hurt. She also gets frustrated when owners make business decisions without asking for staff perspective. “[The owners] are handing down policy, changing something that’s working perfectly and not something that isn’t working,” says Sorensen. “Kitchen managers are wondering how to bring in business. [They] have a meeting, but your full-time floor staff is never invited to them or asked their ideas.”
One of the ideas that Sorensen would love to see implemented would be regular debriefings with all staff to evaluate how service went. It would be a healthier replacement for the tradition of going out for drinks afterward — one of the few times that the front and back actually come together.
Sorensen also thinks there should be more accommodations made for staff to dine out, noting the great irony that most of the chefs she knows don’t have time to go out to eat, and the fact that servers provide a service that they can never afford or find time to experience themselves. In the past, Sorensen says she’s dropped “bills for dinner that are higher than my mortgage payment. It’s unreal.”
The Tipping Point
Tip earnings — what makes service industry job wages like Sorensen’s livable — are a large topic of conversation. Sorensen is conflicted. She believes there’s a misguided perception that “greedy” waiters are trying to take money away from the kitchen staff. The inequity in pay should be addressed, she argues, but she’s not convinced raising everyone to a $15 minimum wage is the only answer to help the industry. The wage doesn’t account for experience or the laundry list of soft skills that the front-of-house workers need to do their job well. She says some front-of-house staff have put in 20 to 30 years in the profession.
“If you were in some sort of traditional job, [experienced servers] would be paid at a higher rate anyway,” says Sorensen. “[It’s] emotional work that you’re doing on the floor.”
Tipping stems from a tradition popularized after the Civil War that allowed employers to pay extremely low wages to recently freed Black Americans who were working porter and restaurant jobs. Tipping continues to create disparities in pay. In Madison, some local owners are considering parting ways with this model in order to provide a more fair wage to everyone in the house, regardless of where they are situated.
Berkson, the remaining founder of Rule No. One Hospitality, introduced tip pooling at Merchant and Lucille. From a customer standpoint, everything is the same. On the back end, the tip is divided into a weighted tier — lead positions (bartenders, servers, cooks) get a prorated share between $22 to $25 an hour; support staff (barbacks, prep cooks, hosts, runners) make $16 to $19 an hour. “In pooling these tips, it enables us to get money into the hands of the kitchen more, which is kind of like the elephant in the room,” says Berkson.
The “elephant” is the idea that a diner’s experience is completely dependent on forward-facing staff like servers and bartenders when, in reality, even staff as far back in the house as the dishwasher and office manager have had an impact. Berkson says he is committed to promoting sustainability in the industry and, therefore, the company guarantees everyone a wage of $15 per hour, with the house making up the difference when necessary. Wisconsin’s minimum tipping wage is $2.33 per hour. Berkson notes that the new tipping model works for Merchant and Lucille because of their prime locations in Madison’s downtown, and realizes it’s not possible for all restaurants economically.
The standard of working Fridays and Saturdays to collect the highest tips, then coming back the next weekend to do it all over again, is not sustainable, says Berkson. “What we notice by having this floor and having this tiered system of compensation with incentives is that our servers are making by and large the same amounts … but it’s much more spaced out throughout the year and you can do much better financial planning.”
Delta Beer Lab opened on the city’s south-east side in 2019 with a mission to pay employees a living wage and health insurance plus 4% revenue sharing, while eliminating the custom of tipping. Any tips that a customer may leave will go to nonprofit partner organizations, says owner Tim Piotrowski.
When customers close out their tabs, there is no line item for a tip, often prompting them to question how to tip, which is when bartenders can mention the current nonprofit partner and ask if they’d like to leave a donation. Piotrowski says most customers are in complete alignment, often giving more than the standard tip amount. To date, more than $68,000 has gone to nonprofits like Mentoring Positives and Free Bikes 4 Kidz.
The pandemic put a hold on Delta’s revenue-sharing program while the capacity was limited (and the business made less revenue). During the program’s pause, Piotrowski temporarily increased the base wage to compensate. He reintroduced the program in August. Piotrowski stresses the distinction between revenue sharing over profit sharing because bartenders don’t have control over expenses but, in normal times, they do have control over revenue based on their interactions with guests and how they drive business.
“I do hope that minimum wage gets raised to $15 an hour, and I hope that tipping becomes less of a structural component to American dining,” says Piotrowski. “Maybe now is an opportunity to change how we look at things.”
Berkson, who has publicly acknowledged his need to face up to the actions of his former business partner, has changed how he looks at things. Merchant and Lucille have implemented a zero-tolerance policy for abusive behavior and are reconsidering the old-school philosophy of “the customer is always right.”
“Maybe the customer isn’t always right,” says Berkson. “If they’re being belligerent to our staff, they’re not, and if they are in any way [acting] threatening, they’re not. … We are so happy to help and support and bring what we do to the table, but also, it takes a customer to understand that we are humans, too. When you have that mutual respect, that’s when the beauty of our industry really shines. That’s when it’s worth all of it. That’s why we do what we do.”
In all of this, there are opportunities for renewal. Restaurants like Short Stack Eatery, Settle Down Tavern, L’Etoile and Graze had temporary closures over the summer to give their staff a much-needed respite during a difficult chapter.
“It’s really hard for me to say, but to be honest, we are all emotionally spent. Mental health in the restaurant industry should not be taken lightly or for granted,” Chef Tory Miller, owner of L’Etoile and Graze, wrote on social media while announcing a weeklong closure in August. “I love our community and being part of it. I am grateful for this god damn pandemic (we’re still in it, FYI) for showing us that how we did things before wasn’t sustainable and shouldn’t be how we have to live in order to get to do what we love to do, and that sometimes it’s OK to not be OK.”
Candice Wagener is a contributing writer to Madison Magazine.
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