Joe Spencer was ready to bring Cajun flavor to Farmington Hills earlier this summer.
But difficulties in finding employees has delayed the opening of his restaurant, Louisiana Creole Gumbo at 29216 Orchard Lake, by several months.
“We’ve been ready to open for a very long time,” he said. “Ever since late May, early June, we’ve been ready.
“It’s challenging just to try to find people … I’ve never seen it like this.”
Spencer, who’s been with the Detroit-based restaurant for nearly 40 years, isn’t alone. The labor market has seen shortages when it comes to workers, especially in customer-facing jobs such as in restaurants. Seeing those shortages has employers being more aggressive to attract workers, including increased wages, signing bonuses and other offers to lure workers out and onto the payroll.
While the unemployment rate in July dropped to 4.8%, the lowest it’s been since the pandemic shutdowns last spring, many businesses have still struggled to find workers.
Spencer has advertised higher wages than he previously offered to help lure in good employees. Now, instead of offering a range of $11-$12.50, the longtime Detroit restaurant that’s expanding into Oakland County is pushing wages between $14-$18. He’s also looked at expanding medical insurance offerings and paid time off, benefits that interviewees have expressed a desire for in their place of employment. Spencer restructured his bonus program as well.
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Improving the compensation is just one way he hopes to attract and grow the longtime business, which originally opened in 1970 on Detroit’s east side and also operates in the northwest part of the city near Seven Mile and Schaefer Highway.
“We’re really trying to raise the bar for people who may be looking at food service as a career,” Spencer said. “As we expand, we’re going to need people who know our food.”
Hiring hardships expected to continue
Hiring is a problem that will probably stick around for a while, said Terry Harvill, an adjunct professor at Madonna University in Livonia who teaches economics. The result comes after a combination of many factors at a macro level from the federal government and on a micro level with more people opting not to return to the traditional labor force.
“We’re definitely in a time where (what) we’re seeing is an outlier event,” he said. “You saw that migration early last year and just accelerated when it got to last spring.”
It’s also a pivotal time in the American economy, said Harvill, who also works as an energy consultant in Northville. With shifts taking place in types of work — less manufacturing jobs that were more prevalent in previous decades and more service-oriented jobs — what have traditionally been seen as jobs to support families has begun to evolved.
Harvill cited the efforts being done by Amazon, which recently brought a center to nearby Toledo and advertised needing hundreds of workers. Those positions have typically begun at $15/hour. Seeing those wages increase for those types of jobs, Harvill said, will have to be the case if they continue in their trajectory of being dominant in number across the workforce.
“People have looked at these jobs for these opportunities,” he said. “If that’s going to be the case, then wages need to go up to support that.”
Struggles for companies big and small
The hiring issues haven’t just affected small shops. Christian Camp, vice president of awesome people at Livonia-based Team Schostak Family Restaurants employs about 5,000 people across five restaurant brands: Del Taco, Wendy’s, Olga’s Kitchen, MOD Pizza and Applebee’s.
They’ve seen the same struggles others have. While the first indoor dining shutdown took the entire industry by surprise, he said Team Schostak did everything they could to transition. It was the second shutdown that began last fall that kept dining rooms closed from mid-November to February that resulted in a mass exodus of workers.
“Then as the second lockdown happened, I think that’s what really created a significant impact to all businesses,” he said. “We saw a lot of people migrate away from the restaurant industry.”
That reality is in line with information from the Michigan Restaurant & Lodging Association. A recent survey by the organization showed 88% of hospitality industry respondents are operating with not enough staffing to meet demand.
It lines up with what Justin Winslow, the president of the organization, told a small group at Twelve Oaks Mall in Novi earlier this year: that the loss is going to sting for some time.
“The level of shuttered industry has been our reality for a long time and its impacts are felt acutely right now, and I think they’re going to be something that we’re going to feel as an industry as we’re adapting to for a long time to come,” he said in April.
Team Schostak always offered an incentive program for referrals, though those figures have increased significantly. They’ve even offered signing bonuses to employees who join the team, a common tool being used at businesses across the region.
He said they want to bring in the best people for the job, but it can prove to be difficult in places such as Novi. A city full of customer service businesses such as restaurants, Camp said Novi has been a difficult spot to hire.
“There’s a lot of restaurants over there. Everyone is trying to be competitive with pay,” he said. “That’s been really one of the toughest spots.”
Is it just extra unemployment?
A common factor mentioned by business owners impacting the worker shortage is the additional $300/week offered in unemployment on top of what the state offers, an incentive that began as more jobs saw furloughs and layoffs especially at the beginning of the pandemic.
It’s one of the big reasons Camp cited for his company’s worker shortage.
“Things have been very extraordinary with unemployment benefits,” Camp said. “That’s been very very challenging for us in light of that.”
That unemployment benefit expires Sept. 4.
Spencer said he originally believed the additional money being paid in unemployment was the sole cause. After talking around the community, he came to the realization that the economy was just changing: many people, especially younger people, were making just as good money working for themselves in various areas.
Dubbed the “gig economy,” many people began doing things like delivering for services like DoorDash and making money through non-traditional means. Given the control such jobs have, he realized more people were attracted to that line of work, making it tougher for employers like himself.
“The idea of being tied down to a job is not as appealing as it was before,” he said.
Unlike the online chatter shared that blame the labor issue solely on the unemployment benefits or the wages currently being offered by employers, the answer to the problem lies somewhere in the middle, Harvill said. The market is in a unique place, with much more cash flowing in the forms of unemployment payments, PPP dollars and more that aren’t typically there.
“There’s a lot of money being injected into the economy right now,” he said.
Can’t grow fast enough
For some businesses, the hiring process is a necessity for survival, especially restaurants. Several eateries across the region have closed their doors in recent months, citing a lack of workers as the reason. Those include Milford House Bar & Grill, Hector & Jimmy’s in Milford and Detroit Eatz in Farmington.
But it can stunt growth as well. Similar to Spencer and Louisiana Creole Gumbo, Hunter House Hamburgers in Birmingham is looking for employees. But the iconic hamburger stand isn’t in danger of shutting down due to a lack of workers, it just wants to continue its organic growth its seen over the years. To do that, it need workers, so much so that the restaurant is advertising eye-popping pay of $20-$35/hour for those who work there.
Those figures factor in tips, something customers have been generous with during the pandemic.
“It’s partially driven by the need to hire people,” said Kelly Cobb, owner of Hunter House. “It’s also just sort of the nature of what’s happening now with people tipping.”
The restaurant at 35075 Woodward recently expanded, opening a second location at United Shore Mortgage in Pontiac. Operating in a replica of the white hamburger hut, it’s open solely for employees of the company, but it’s brought in enough business to justify the increased wages for new hires.
Even with the increased wages, Cobb said it’s still difficult to find the right help to find the close-knit environment. With not having all the employees needed, it’s limited restaurant hours: it still hasn’t reopened for breakfast in the mornings.
Cobb said while he wishes the circumstances were different at his shop, he’ll take the problem he faces rather than having to lose employees.
“I think more people are out into the workforce again. I’m hoping that restaurants can reopen their hours,” he said. “I’m just so thankful we’ve never had that problem.”
Despite not having enough employees, Spencer said he expects Louisiana Creole Gumbo to open in Farmington Hills the week of Labor Day. While he had nearly 50 before the pandemic, he’s down to less than half that between the three restaurants. Those looking to apply can do so by visiting detroitgumbo.com.
“We are trying to get people in. We’ve got opportunities at all three of our stores,” he said. “We’re working the hell out of our people.”
Contact reporter David Veselenak at dveselenak@hometownlife.com or 734-678-6728. Follow him on Twitter @davidveselenak.
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