Long after the restaurant industry felt the most significant impacts of the pandemic, echoes still reverberate in the form of workforce realities and operational challenges. After millions left the industry in 2020, restaurants responded by increasing wages and leaning into incentives to attract employees back. This adaptability allowed the industry to come back even stronger, but to this day, the struggle to attract and retain a stable workforce remains.
To help restaurant operators better understand what employees want and need, close to 1,000 restaurant managers were surveyed regarding compensation, technology use, retention tactics, and more. Here’s a look at some of the key findings so you can reflect on 2024 and prepare for maximum growth in 2025.
Growth and Leadership
While the restaurant industry grew by 1.7 percent in 2024 and added 210,300 jobs, a standout category led the pack. Quick-serve restaurants (QSRs) experienced four-percent growth over the past year, which helped to offset the declines seen in full-service dining.
There may be many reasons for this, including the fact that QSRs’ fast, casual, and affordable nature may appeal to younger generations and individuals whose eating habits have changed post-pandemic. In 2025, QSRs should continue adapting to changing consumer habits, focusing on speed and convenience.
Recruiting and Retention Remain a Struggle
In the research report, 65 percent of respondents described the current labor market as “tight” or “very tight.” Perhaps unsurprisingly then, many restaurant operators cited a lack of qualified and committed applicants as a significant obstacle. Thirty percent of respondents named recruiting their top challenge, while 27 percent said retention was.
Despite ongoing challenges in 2024, 67 percent of restaurant managers are optimistic about what 2025 holds for the industry.
To make progress in both areas in 2025, managers should focus on offering more in-depth training and elevating the employee experience. It’s also important to recognize that many restaurants are making their jobs harder than necessary by continuing to rely on manual scheduling tools. Adopting modern solutions can go a long way in improving recruitment strategies, efficiency, and efficacy.
Employee-Centricity Is a Must
Industries across the spectrum have shifted in recent years to become more employee-focused, thanks in part to greater awareness of the connection between employee satisfaction, retention, and outcomes. The restaurant industry is no exception, and employees gravitate toward employers who offer benefits like PTO, positive environments, and regular feedback.
Even though restaurants are moving in the right direction regarding providing better employee benefits, there are still gaps. For example, 69 percent of research respondents reported not offering childcare or mental health support. If you really want to attract–and keep–top talent in 2025, review your benefits and consider how you can offer better ones. Not only can this positively impact your employees, but it can also help differentiate your restaurant in a tight labor market.
Wage Increases and Regional Disparities
Median base wages increased four percent in 2024, and total compensation followed a similar upward trend. Still, regional differences remain, with higher pay in the Pacific Northwest and Northern California and lower pay in the Southeast and Midwest.
To stay competitive in 2025 and beyond, be sure your restaurant adjusts its wage strategies based on regional trends while also considering the cost of living. On a related note, the practice of tipping has not changed much this year. Even so, some restaurants are piloting alternative compensation models, like service charges or higher menu prices, to see if such models offset the elimination of tips and create more wage equity.
Tech Adoption: Challenges and Opportunities
In 2024, 65 percent of restaurants reported adopting new technology to improve efficiency and manage labor challenges, including payroll and tip management tools to training platforms. Despite this progress, 27 percent of restaurants still schedule on paper or whiteboards, and 23 percent rely on Excel or Google Sheets.
If this sounds familiar, 2025 can be your chance to modernize your restaurant. Seek out tech investments that streamline operations, improve scheduling, and enhance staff management. Every system you consider should provide feedback or data that allows you to make informed decisions and continually improve.
Looking Ahead
Despite ongoing challenges in 2024, 67 percent of restaurant managers are optimistic about what 2025 holds for the industry. The research affirms that there’s a lot of promise ahead for restaurants that offer their employees better benefits, adjust their wages reasonably, and lean into opportunities for growth–like adopting new technologies. With employee-centricity, more fair compensation, and greater tech incorporation, restaurants can improve their operational efficiency and ability to retain top talent in an increasingly competitive market.
