Empowering the Restaurant and QSR Industry to Rise Above Current Challenges

Empowering the Restaurant and QSR Industry to Rise Above Current Challenges

Five Ways Restaurant/QSR Leaders Can Tackle Industry Challenges 


The past two years have brought a number of challenges to the hotel and hospitality industry, but with these hurdles come fresh opportunities for business leaders to improve and grow their business.

Challenges like labor shortages and supply chain disruptions are seemingly here to stay – limiting restaurant hours of operation and customer capacity, and even forcing significant changes to menus.¹

In all of this, employees – waiters, managers, chefs, busboys and fast food window operators – can become overwhelmed and frustrated. 

But businesses that choose to invest in their employees’ wellness and financial health can re-invigorate their businesses during periods of uncertainty. DailyPay research shows that employees who use on-demand pay are happier and more content in their roles, and they provide better service to customers.²

Let’s dive into the five upcoming challenges for this industry and how employers can actually improve their businesses despite current economic and logistical woes. 

This post is the first of a five-part series that will unpack the latest challenges and solutions for Restaurant and QSR employers in 2022.

1. Motivate Employees to Return to Work 

As restaurants shuttered their doors or switched entirely to take-out models during the pandemic, a number of restaurant owners laid off employees

As customers return and restaurants open at full capacity again, restaurant managers are struggling to bring back employees. It’s estimated that up to 80% of full-service operators currently don’t have the staff needed to meet customer demand.³ Additionally, 66% of small restaurant operators say they still have trouble filling open positions.³

Restaurant managers can help motivate employees to return (or bring in new staff) by considering benefits that will make staff feel stable and supported in an industry that is known for its instability. For example, benefits such as tuition reimbursement, sign-on bonuses or on-demand pay can help employees feel valued and secure.

2. Support Staff as a Potential Recession Nears 

Some investors predict that a recession may begin in 2023.⁵ An economist at Moody’s Analytics shared concerns involving recession risks with CNN.A recession could have several impacts, many of which could impact restaurants and QSRs.⁷ Owners and operators may be able to better prepare for a potential recession by considering different options that may mitigate the blow of an economic downturn. These may include shortening restaurant operating hours, finding simple ways to cut food costs and being more innovative with menu offerings.

It’s also helpful to support staff through a recession by investing in their wellness and financial stability. While managers may not be able to increase wages due to the cost to the business, they can consider benefits like on-demand pay, which allow staff to get their wages to get groceries or pay bills despite tough economic conditions.

3. Embrace and Adapt to New Technologies 

The popularity of third-party food delivery apps, such as DoorDash and Grubhub, is increasing, which means diners are expecting simple, digital methods of ordering and delivery, even from independent restaurants. Many consumers grew accustomed to ordering food that way over the course of the pandemic and this trend is likely to continue because of its convenience.

In a 2021 survey, over half of U.S. adults, including the majority of Millennials and of Gen Z, said that ordering take-out or delivery is essential.⁸ Utilizing digital technology is growing in importance, with 80% of restaurant owners in the survey saying that it gives them an advantage over the competition.⁸ While adapting to new technologies can be difficult or costly, embracing this change can be lucrative in the long run.⁸ Employers may also get an advantage over competitors by embracing technology that delivers employee benefits such as on-demand pay apps or financial wellness tools.

4. Support Staff Through Supply Delays and Shortages

96% of restaurant operators were affected by supply delays or shortages in 2021.⁹ These shortages have affected everything from food to takeout containers and forced restaurant owners to come up with creative solutions to this industry-wide issue.¹ 

Restaurant and QSR employees have dealt with uncertainties around COVID-19, ranging from a move to take-out only, outdoor dining and more. As they deal with potential roadblocks from supply chain disruptions, restaurants and QSR owners and operators may be able to support staff with solutions like on-demand pay.

5. Invest in Employee Benefits to Mitigate Inflation

Recent inflation has greatly impacted restaurants as costs rise for equipment and food.¹ This increase in the price of restaurant necessities has led many restaurant owners to increase menu prices. Full-service restaurant prices had increased 5.9% year-over-year in October 2021, while QSR menu prices increased 7.1%.¹ Menu prices in November 2021 were at their highest since 1982.¹¹

Employers are also considering increasing employee wages to help staff deal with the rising cost of goods in their day-to-day lives. Research has shown that increasing wages doesn’t always result in improved business returns, as higher wages increase the overall operating costs.¹² Employers should look into tools such as on-demand pay, which deliver earned pay when employees need funds without increasing the overall costs to the business.  

On-Demand Pay Can Help Restaurants and QSRs Work to Overcome These Issues

Restaurant owners need to prioritize staff retention, actively hire for open roles and explore new technologies that will help combat record-high operating costs while increasing customer satisfaction. Studies have shown that more than half of diners are willing to pay more to know about the safety and cleanliness of the preparation and transportation of their food Therefore, restaurant owners need to ensure they are retaining and engaging the workforce they need to help them provide that level of service. 

Employers in these industries can set themselves apart by offering the benefits today’s employees are asking for. Offering an on-demand pay benefit through DailyPay has been proven to reduce turnover costs, improve retention and strengthen the employer-employee bond, helping to fight “The Great Resignation,” as well as some of the industry-specific issues mentioned above.² Also, happier employees are more engaged and motivated to provide better service to customers, encouraging them to return for another meal.²

An Aite-Novarica Group survey of DailyPay users, commissioned by DailyPay, found that 82% of users report worrying less about money now that they have access to this technology.¹³ The visibility into their earnings and extra “cushion” on-demand pay provides may help employees pay their bills on time and improve their financial wellness.¹³

Eager to see how DailyPay may help to drive value for your business?

Don’t forget to check back soon for the rest of the blogs in this series! Our next installment will dive deeper into increased turnover rates and how employers can combat them.

All information herein is for educational purposes only and should not be relied upon for any other use. The information herein does not constitute the rendering of financial, business, accounting, securities, tax, legal or professional advice by DailyPay. No fiduciary obligation or duty exists, or is created, between you and DailyPay. DailyPay does not warrant the completeness or accuracy of any information provided to you.

All information herein is for educational purposes only and should not be relied upon for any other use. The information herein does not constitute the rendering of professional advice by DailyPay. DailyPay does not warrant the completeness or accuracy of any information provided to you.

1 https://get.doordash.com/en-us/blog/supply-chain-shortages:DailyPay, 2020

2 https://www.dailypay.com/qsr-restaurants/:DailyPay, 2020

3 https://www.restaurantdive.com/news/despite-january-job-gains-the-restaurant-industry-continues-to-struggle/618386/:DailyPay, 2020

4 https://www.restaurantbusinessonline.com/workforce/worker-shortage-pushing-employee-benefits-new-levels:DailyPay, 2020

5 https://www.weforum.org/agenda/2022/04/recession-investor-bank-pandemic-united-states#:~:text=According%20to%20a%20Bloomberg%20Markets,as%20early%20as%20this%20year:DailyPay, 2020

6 https://www.cnn.com/2022/03/25/economy/recession-risk/index.html:DailyPay, 2020

7 https://www.investopedia.com/articles/economics/08/recession-affecting-business.asp#:~:text=Recessions%20impact%20all%20kinds%20of,likely%20to%20receive%20government%20bailouts:DailyPay, 2020

8 https://www.foodbusinessnews.net/articles/20583-finding-workers-ranks-as-top-foodservice-challenge#:~:text=WASHINGTON%20%E2%80%94%20About%2050%25%20of%20respondents,their%20top%20challenge%20in%202022:DailyPay, 2020

9 https://restaurant.org/research-and-media/research/research-reports/state-of-the-industry/:DailyPay, 2020

10 https://www.qsrmagazine.com/consumer-trends/2022-arrives-restaurant-future-comes-focus:DailyPay, 2020

11 https://www.foodandwine.com/news/the-price-of-dining-out-jumped-more-than-it-has-since-1982:DailyPay, 2020

12 https://hrdailyadvisor.blr.com/2021/04/15/pros-and-cons-of-increasing-your-starting-pay/:DailyPay, 2020

13 https://www.prnewswire.com/news-releases/new-research-from-aite-novarica-group-on-demand-pay-eliminates-payday-loans-overdraft-fees-for-millions-of-american-workers-301353338.html:DailyPay, 2020

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