TLDR: The restaurant labor pool is massive—nearly 10% of the U.S. workforce. Your problem isn’t finding people, it’s keeping them. Efficiency matters (embrace the tech, audit your prep list, lean on vendors), but it won’t fix a 75% turnover rate on its own. Competitive compensation and a culture worth staying for will.
There’s a seductive narrative circulating in restaurant circles: automate your way out of the labor crisis. Buy the right tech. Bring in more pre-made products. Do more with less.
It’s not wrong, exactly. But it’s incomplete.
A recent piece in Modern Restaurant Management makes the case for efficiency as the antidote to chronic understaffing—embracing technology, rethinking scratch production, and leaning on vendor partners.
All solid tactical advice.
But here’s the thing: efficiency is a response to labor shortages, not a solution to them. And conflating the two could cost you your best people.
The Math Says There’s Opportunity for Restaurant Talent
Let’s start with the macro picture. The U.S. restaurant and foodservice industry employs roughly 15.7 million workers—nearly 10 percent of the American labor force. Eating and drinking places alone added 150,000 jobs in 2025, an improvement over 2024’s gains.
The labor pool exists. The question is whether your operation is positioned to attract it.
The real crisis isn’t availability—it’s retention. Industry turnover still exceeds 75 percent annually, with quick-service concepts seeing rates above 130 percent. Replacing a single hourly employee costs a lot, factoring in recruiting, training, and the productivity gap while someone new gets up to speed.
That’s not a labor shortage. That’s a revolving door—and you’re paying for every spin.
Yes, Of Course You Need Efficiency As An Operator
None of this means you should ignore operational efficiency. Quite the opposite.
For a low-margin business, doing more with less is survival. Think:
- Technology that automates scheduling
- Inventory management
- Order flow
These things can free up labor hours for higher-value work.
Plus, lean on your vendor partners. The best distributors aren’t just moving product—they’re watching trends, testing new solutions, and helping operators solve problems they didn’t know they had.
But here’s where the efficiency argument gets slippery: saved labor hours only matter if they’re redeployed productively. Too many operators invest in automation as a talking point—a line item that looks good in a pitch deck—without actually restructuring workflows to capture the value. If your new prep system saves 12 hours a week but those hours evaporate into nothing, you’ve bought expensive peace of mind, not competitive advantage.
The discipline is in the follow-through. Track the hours. Reassign them intentionally. Measure the output.
But Efficiency Isn’t The End All Be All (Value Is)
The Modern Restaurant Management piece makes a reasonable case for prepared foods—those scratch-quality sides that eliminate hours of chopping, boiling, and seasoning. And for certain items, this makes perfect sense. Not every potato salad needs to be a point of pride.
But operators need to tread carefully here. Your customer base is smart. They can tell when the brisket is trucked in. They notice when the mac and cheese tastes like every other mac and cheese.
If you’ve built your brand on a signature item—that jalapeño cornbread, that house-made hot sauce—swapping it for a distributor equivalent will erode value perception faster than it saves labor costs.
And right now, you can’t over-index on value. It’s why people are still dining, despite rising prices.
The smarter (but slightly more time-consuming) approach is to audit your entire prep list. Which items define your brand? Protect those relentlessly. For everything else, build a decision matrix.
Evaluate each item against:
- Cost
- Time
- Consistency
- Guest perception
You’ll often find 20 percent of your prep creates 80 percent of your identity—and the rest is fair game for optimization.
What Actually Fixes Restaurant Labor Shortages
If efficiency is the tourniquet, compensation and culture are the surgery. The data is unambiguous: wages remain the primary driver of restaurant employee turnover, with nearly 35 percent of departing workers citing pay as their reason for leaving.
This doesn’t mean you need to outbid everyone in your market. But it does mean you need a compensation philosophy that acknowledges reality: hourly wages have risen from $13.36 in April 2020 to $19.30 in mid-2025, and workers expect that trajectory to continue. Competitive pay, predictable schedules, clear advancement paths—these aren’t perks. They’re table stakes.
The operators who are winning the retention game aren’t just paying more. They’re building environments where people want to stay: structured onboarding, cross-training opportunities, genuine flexibility, and managers who actually manage rather than simply supervise.
How Can Operators Prepare For Labor Fluctuations?
Labor challenges aren’t going away. But treating efficiency as a substitute for competitive compensation and retention strategy is like treating a fever with ice packs—it addresses the symptom while the infection spreads.
By all means, embrace the tech. Audit your prep list. Work smarter with your vendors. But don’t confuse operational optimization with solving your people problem. The restaurants that thrive in 2026 will be the ones that do both.
Need help understanding how labor costs affect your unit economics?
The Restaurant CPAs connects operators with specialized accounting firms who understand the nuances of restaurant financial management—at no cost to you. Get your custom matches today.
