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The median hourly wage in limited-service restaurants is $11 per hour

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Written by Publishing Team

Average hourly wages at limited-service restaurants rose 10% in the second quarter of last year, and increased 6% among full-service line chefs, according to a Black Box Intelligence webinar Thursday.

Hourly workers at limited-service restaurants earned an average of $11 per hour in the second quarter, compared to $10.50 per hour during the first quarter of this year, which at the time was a 4.1% year-over-year increase.

Line cooks made an average of $15 per hour during the second quarter, up from $14.85 per hour during the first quarter.

The data comes as part of a larger report released last month by the Black Box looking at the industry’s employment crunch, which has caused turnover rates to skyrocket. Across the country, many restaurants have not been able to fully open because they are having trouble finding staff, said Victor Fernandez, vice president of insights and knowledge at Black Boxes.

Staff turnover, which was already high before the pandemic, is also costly. The per-person cost for the terminated employee is $14,689 for the general manager, $8,119 for the manager and $1,869 for an hourly worker — with most of that cost going to training new workers.

Drawing on the results of a survey conducted with Snagajob, Black Box found four main factors causing a shortage of restaurant staff: wages and benefits, the challenge of finding child and family care, opportunities in other industries, and concerns about physical and mental health.

In the webinar, black box officials took a deeper look at compensation, saying that more companies are using wage incentives to get workers back.

82% of companies offer higher base pay rates in 2021, compared to 64% in 2019. 54% use login bonuses, compared to 21% two years ago.

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The median base salary plus bonus increased significantly for full-service general managers in the second quarter — up 5.1% to $90,129 — but among managers of limited-service restaurants, the median rate fell 2% to $63,878.

Fernandez said the average increase in merit for GM compounds is expected to return to normal in 2022, with expected increases of 2.5%, compared to increases of 2.7% this year and 2019.

However, GM bonuses next year are expected to increase to 21.4% of base salary, compared to 19.1% of base salary in 2021.

The benefits are also on the rise, with more than half of restaurant businesses now offering flexible scheduling for hourly workers and general managers, and a growing number offering perks like financial planning and family/elder care leave.

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Restaurant workers now get an average of five sick days per year, compared to two workers in 2019. 63% of restaurant companies offer health programs, compared to 38% in pre-pandemic, and 80% offer hourly workers a 401K plan, up from 66% in 2019.

“What this says is that we see restaurant companies doing more,” Fernandez said.

Will the industry be the same?

Fernandez said the answer is yes and no.

On the one hand, he said, “I think we will be able to find out. If anything, the past 18 months show how resilient this industry is.”

On the other hand, the business challenges that the industry is now facing are the exacerbation of problems that existed before the pandemic.

In 2019, sales were already high and restaurants were struggling to staff their kitchens, Fernandez said. “So things are not going to be the same in that we have to change, we have to evolve.”

To watch the on-demand webinar, go here.

Contact Lisa Jennings at [email protected]

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Publishing Team