Hi everyone! Today we’re talking about the labor shortage again, a very successful recruitment campaign, and how your restaurant delivery service can capitalize on the growing demand for food delivery.
Before we get started, a brief disclaimer: the suggestions below are all directly related to restaurant employees – not the 1099 contractor folks you most likely employ in your RDS. Some of my suggestions may be applicable, but do your diligence first, to make sure you aren’t exposing yourself to legal liability.
Here’s an excellent resource with links to other relevant info. In short, be creative, but be clear on the limitations.
That said, let’s get on with this month’s PFN.
Our strategy for finding and keeping employees…
A few of my friends in the restaurant industry have remarked that opening up has been more challenging than shutting down, and I know what they mean. Restaurants nationwide have struggled to recruit and retain good employees due to the labor shortage, and my restaurants were no exception.
We knew we needed more people to continue providing excellent food and excellent service to our customers, so we put our heads together, came up with a strategy, and got to work.
It was a huge success. We hired 64 new people across five restaurants in just four weeks during a labor shortage. I’m going to share what we did, why it worked, and what you can learn from this that will translate to your restaurant delivery service (RDS).
Here’s what we did:
- Gave employees a 10% pay increase.
- Offered a $1000 retention bonus after six months of employment.
- We began offering full healthcare benefits to our employees.*
- Added a $50 monthly wellness stipend that our employees can use toward a gym membership, new workout gear or running shoes, massages, a chiropractor, or other health-related expenses.
These are dramatic changes
Let’s talk about why we took these steps. First of all, employees who feel cared for are happy. This leads to better morale, a better atmosphere, and better service for your customers. The result is improved customer loyalty and repeat business.
Second, you may be thinking our approach is too expensive, but the fact is turnover costs are sky-high. According to my estimate, it costs $600 to $800 to hire and train a new person.
If you’re experiencing high turnover, it adds up really fast. But if your employees are happy, they’ll stick around. And that saves you a lot of money. It also frees you from the constant cycle of recruiting, hiring, and training.
So how can you translate this success to the delivery side of things? It starts with asking a crucial question: What do delivery drivers want?
How to hire and retain food delivery drivers
One thing to keep in mind is that companies like DoorDash and GrubHub pay their drivers per delivery, not per hour. This gives the driver more control over how much they earn and incentivizes them to work efficiently. So if your RDS isn’t already doing it this way, I’d encourage you to think about it.
A real asset to the per-delivery payment model is a highly efficient restaurant delivery software. A good system will excel at optimizing routes and deliveries, which means more deliveries per hour. For the restaurant owner, this means faster, more efficient customer service. For the driver, this means they can earn more money. For your restaurant delivery service, this means happy customers and happy employees. Investing in good restaurant delivery software benefits everyone.
Another popular strategy is the weekly guarantee. For example, you could communicate to drivers that they are guaranteed to make $1200 if they make 100 deliveries in a given period of time, such as a week. This means you can offer your drivers a degree of income stability and predictability that the big three cannot.
Also, consider more traditional employment benefits, such as healthcare or a 401k match, or something different, like a retention bonus or a monthly stipend of some kind. You will create the most effective hiring and retention campaigns by asking that important question: What do food delivery drivers want?
Because here’s the thing: Food delivery is here to stay.
Your Restaurant Delivery Service (RDS) and the Future of Food Delivery
We’ve talked about this before, but the food delivery trend is still going strong. People genuinely enjoy the convenience and novelty of food delivery. We’re seeing the same growth rates now that we were pre-pandemic.
As food delivery grows, you need to think about how you’re going to secure your place in this market. How will your restaurant delivery service stay competitive and grow?
In my opinion, hiring and retaining really good people is key to your success. Think about how you can create an atmosphere where your team members feel comfortable. Encourage them to share their ideas and ask for the support they need. Make sure you’re paying them well. If working for you is the best delivery gig in town, you’ll have a much easier time creating an excellent team.
Establishing good communication with your team is another critical element of your success. Your team knows what it’s like out in the field and can report back any bottlenecks, inefficiencies, or issues they encounter over and over. Use this information to solve problems on a macro and micro scale and get involved in following through with excellent service.
At the end of the day, happy employees and happy customers are the most powerful elements of a successful restaurant delivery service.
Ready to grow your restaurant delivery business during a labor shortage?
Stay tuned: Next month, we’re talking about an opportunity that’s twice as profitable as restaurant delivery in an industry that has seen 40-70% growth over the last year.
*As mentioned in the disclaimer, you’ll need to do diligence as healthcare is not provided for 1099 contractors. Here’s a good article about this and some suggestions you can offer folks to shop for their own insurance.