'A perfect storm': These restaurants survived the pandemic. Now they can't find workers

New York (CNN Business) A few weeks ago, Philippe Massoud posted online ads looking for a cook to hire at ilili, his New York City restaurant.

Typically, he said, 60 or 80 people might show up to interview for a position like that one. This time? Nobody.

"That has not happened, ever, in the 14-year history of the business," Massoud said.

Ilili, an upscale Lebanese spot, currently has about 78 employees, a little less than half of its pre-pandemic workforce, Massoud said. The way business is going now, he could use another 12 people. The staffing shortage means the restaurant is not open for business during lunch or on Monday nights, even as it struggles.

"We just don't have the bodies," he said.

Dining restrictions are lifting across the country, and people are getting vaccinated each day. That's good news for restaurants desperate for more business after getting hit hard last year.

But some restaurant operators say they are facing a problem that could impair their road to normalcy: They can't find enough people to work for them.

When states went into lockdown and US restaurants were ordered to close their doors in spring 2020, many establishments let workers go. From March to April of last year, restaurants and bars lost 5.5 million jobs, according to the Bureau of Labor Statistics. That meant millions of people found themselves out of work essentially overnight.

Those jobs are coming back: Restaurants and bars added about 176,000 jobs in March. But the sector was still 15%, or about 1.8 million jobs, below the pre-pandemic employment level, according to the National Restaurant Association.

It's not just high-end, independent restaurants like Massoud's that are feeling a labor pinch.

The CEO of Darden Restaurants (DRI), which owns Olive Garden, Longhorn Steakhouse, Cheddar's Scratch Kitchen and other chains, recently called hiring the company's "number one priority."

"Our greatest challenge right now is staffing," Darden CEO Eugene Lee said on a call with analysts late last month. Before the pandemic, Darden had about 165,000 active hourly employees, he said, but as of a few weeks before the call that number was down to about 115,000.

Major chains in the fast-food industry have also said they are staffing up. Taco Bell is hoping to hire at least 5,000 people during a nationwide hiring event on Wednesday. McDonald's wants to hire 25,000 employees in Texas alone, starting with a three-day hiring event last week. IHOP wants to hire 10,000 new people, and is planning a national recruiting day for May 19.

Restaurants "are getting ready to open up and hire at the same time," said Andrew Chamberlain, chief economist at Glassdoor, which hosts job ads. "It's leading to a massive boost in demand for these workers," he said, noting that "makes them scarce and hard to hire." But there may also be fewer people looking for restaurant jobs than before.

Where are the restaurant workers?

So if restaurant workers aren't looking for restaurant work, where are they going?

Some have left the industry altogether.

Jessica Vines, 45, left her job as a server at Mexican restaurant El Pavo Real in New Orleans last year.

While she had held jobs in human resources and accounting in the past, her passion was hospitality, she said. About six years ago, following her son's high school graduation, she moved to the city from Indianapolis to work in the industry.

When the pandemic hit last year, her busy schedule — which included a separate bartending gig — dwindled, and her wages took a hit. She was working just five hours a day at the restaurant, which was only preparing takeout orders.

Vines decided in August to head back to Indianapolis, where her son still lives. She was able to find a job as an accounting associate at a medical device company,

"I just didn't see an end in sight," she said. "I knew I couldn't do it for another year."

Vines had become close with the El Pavo team, and leaving them was difficult. "Those are the people I keep in touch with the most," she said. "Those are still the people I talk to every single week."

Lindsay McLellan, who along with her husband owns El Pavo Real, described Vines as not just an employee but a friend. "We're very sad to have her leave, but I get it, I really do," she said.

Even though she misses the camaraderie of restaurants, she's not sure she'll ever work in a restaurant or bar again. The last year has made her wary of a future in the hospitality industry.

"If this happened again, I would be at the same place," she said. "I don't foresee ... a safety net for people like me."

Last year, a Glassdoor analysis looked at a group of over 120,000 job seekers who were actively searching for "restaurant server" positions on its site in January and February. It then tracked those users' job searches in April and the first half of May. Glassdoor found that within that cohort, searches for "data entry" jobs jumped about 400% during that period compared to the year before. Searches for "remote" positions jumped roughly 300%, and searches for Amazon — which Glassdoor sees as a catch-all for warehouse, delivery and other jobs — rose about 600%.

The analysis didn't track whether those people ended up in new jobs but Chamberlain said that, statistically, it's likely at least some fraction did.

"They might be reluctant to leave those new sectors and move back over into restaurants because of the turmoil over the past year," he said.

Some young restaurant workers have likely gone back to school, he said, and left the labor market completely. School enrollment tends to surge during recessions, he explained. And, of course, many people may be afraid of going back to restaurant jobs while the pandemic is still going on, or may be unable to return to work because of child care or other responsibilities that have become more acute during the pandemic.

"All of these factors combined are creating a perfect storm hitting restaurants," he said.

The changes could prove permanent Chamberlain said. And, he added, that could mean restaurants having to adapt new technologies to replace certain roles and making other positions more efficient.

Making a second first impression

John Horne, owner of Anna Maria Oyster Bar in the Bradenton area in Florida, employs about 300 workers across his four locations. Before the pandemic, that figure was closer to 400.

"Our problem is not being able to get staff," Horne said. "It's absolutely horrible."

Unlike Massoud, Horne hasn't shortened hours, even though he's looking to hire about 50 workers. But his employees are pulling long shifts, he noted, leading to an unsustainable situation.

"At some point, they're going to just say 'I can't,'" Horne said. "We're doing everything we can to make sure that we're getting them everything they need," he added. "But we also have to give good service. My guests don't care that I have a staffing problem."

After a year at home, some customers will show up to restaurants with a critical eye, Horne noted. They'll want to feel safe and taken care of. "It's almost like you've got first-time guests again," he said.

Horne said his kitchen workers earn between $13 and $18, and servers earn more on average because of tips. He said he's offering hiring bonuses to try to bring people in. He suspects that some people are opting to rely on unemployment benefits instead. Horne, who serves as restaurant director at the Florida Restaurant and Lodging Association, has voiced concerns about raising the minimum wage, a position that aligns with that of the association.

For some low-earning workers, unemployment benefits could amount to about the same as a check from a restaurant — where they run the risk of exposure to Covid-19.

Massoud also mentioned unemployment benefits as a possible reason some workers are not coming back to work. But there are other factors, too, he said. Some of his former employees left New York City. Some don't have child care without school and so aren't able to return to work, and others may have decided to switch careers.

"If this does not get rectified soon as possible, it's going to further damage our industry," he said. "The mere fact that we are unable to open fully because of the labor shortages is going to hurt us in the long term."