Chicago restaurants struggled with labor shortages last year. Relief is coming slowly

For Amy Le, the owner of Latin-Asian fusion eatery Saucy Porka, 2021 and 2022 were difficult years. The COVID-19 pandemic hit the restaurant industry hard, pushing workers out of kitchens.

As demand picked back up, she had to stretch shifts up to four hours longer than usual to keep her two Chicago locations running, shuttling herself and other cooks back and forth between the downtown and Hyde Park locations.

“It was extremely difficult to find labor,” she said. “Nobody had any family members or anybody that we could even hire at that point.”

Owners like Le say things have started to improve. But Chicago’s restaurant scene continued to suffer from a labor shortage in 2023, according to a new study.

Eighty-two percent of Chicago restaurants reported being short at least one position last June, according to a study from point-of-sale system developer TouchBistro. Of that 82%, 40% said they were short on chefs — 12% higher than the national average.

The study was part of a national study that surveyed over 600 restaurant owners, managers and presidents across the country.

Leigh Uhlir, a dean at Kendall College of Culinary Arts and Hospitality Management, said these shortages show the restaurant industry is still recovering from the pandemic.

“The restaurant industry has had a significant amount of impact from COVID-19. What we saw from that was a large volume of employers coming to us for ideas to help get students into their facilities faster,” Uhlir said.

Uhlir said Kendall alumni not only struggled with hiring chefs but also with keeping them. The survey revealed Chicago had the second-highest turnover rate, at 30%, slightly above the national average. Uhlir attributed this to a number of causes, from rising food prices putting a strain on kitchens to mental health concerns brought on by long hours and high-stress environments.

The next highest staffing shortages by position were line cooks (27%), servers (24%) and bartenders (23%).

Tyler Pasciak LaRiviere/Sun-Times

Slow progress amid rising costs

The new study complicates how employment has improved for Chicago-area restaurants. WBEZ reported in September the city’s restaurant industry is bouncing back from the strain brought on by the pandemic. July 2023 marked the highest employment month for the sector since June 2019.

Le said the labor pool seemed to return to normal last summer. She finally hired two line cooks in 2023, one in June and one in October.

“Two years ago, 94% of operators in Chicago said they were short at least one position, and this decreased to 82% last year,” Matt Zibell, vice president of product at TouchBistro, told the Sun-Times. “Looking into early 2024, it makes sense that this positive trend has continued.”

A lack of chefs wasn’t the only issue Chicago restaurants faced last year. TouchBistro reported 60% of restaurants said rising food costs was the “number one source of financial strain in the past 12 months,” with respondents paying an average of 40% more on food costs compared to 2022; 18% named labor costs as their biggest financial challenge.

Illinois Restaurant Association President Sam Toia said food costs have declined over the last six months or so but are still 25% higher than they were a year ago. Coupled with labor shortages, restaurants have definitely felt a strain, he said.

The combined costs have led restaurants to raise their prices. About 56% of Chicago restaurants increased their prices last year, the study found, with an average increase of 15%. Le said she was forced to raise prices 5% to 10% as a result of rising labor and food costs.

“There’s been, I think, an understanding among consumers,” Le said. “Because they felt it personally themselves at home ... there’s kind of an acceptance that these prices have gone up.”

Fifty/50 Restaurant Group co-founder Scott Weiner said his restaurants have also felt the impact of rising costs which he attributed to the competitive wages and benefits his restaurants provide employees. As a result, many of his restaurants raised their prices.

“Ultimately, in 2023, it was not the cost of food that kept the menu prices elevated,” he said. “It was the cost of labor.”

Zibell of TouchBistro said, “Now that many workers in restaurants are earning above minimum wage, this has made food service a slightly more attractive job opportunity than in the past.”

The median annual wage for chefs and head cooks was $56,520 in May 2022, according to the U.S. Bureau of Labor Statistics. The industry is expected to grow 5% from 2022 to 2032, faster than the average for all occupations, according to the bureau.

Expanding while streamlining

TouchBistro’s study showed streamlining menus and embracing technology were ways restaurants hoped to counter rising costs. Expanding to new markets may improve their prospects, too.

Meal delivery services have stayed popular since the pandemic, Toia said. Over a quarter of Chicago restaurant business is done through online ordering, the study reported, and Toia expects this trend to continue.

Meanwhile, menu design will need to change with the times.

“You don’t have these large, expansive menus anymore because you can’t afford them,” he said.

Tyler Pasciak LaRiviere/Sun-Times

After seeing how consumer behavior changed during the pandemic, Saucy Porka added QR code-ordering to their restaurants. Le said she now needs half the cashiers she’d had before QR code menus.

Over 90% of Chicago restaurants surveyed said they had plans to expand, with 73% planning to add one or more locations. Toia attributed this to the benefit of buying in bulk. When you have more restaurants, you can buy higher quantities of products at lower prices, he said.

Le agreed. “It sounds counterintuitive, but the bigger you are, the more buying power you have.”

Le’s recent expansion efforts include opening a new restaurant in St. Louis in 2022. Expanding to that “mid-tier market” allowed for expansion without the high rent and cost of living of Chicago.

“It’s always looking at, ‘How can we grow without having to pay an arm and a leg?’” she said.

Contributing: Dorothy Hernandez