How to meet an uncertain future amidst a chronic labour shortage

There is an acute labour shortage in food businesses today and the question operators are asking is, “what if labour never returns?”

The labour situation in the Canadian hospitality sector will be chronic in large part due to demographic trends. According to a recent research conducted by Restaurants Canada’s senior economist, Chris Elliott, numbers from Statistics Canada were signalling the trend for years. The research noted that young people generally account for about 40 per cent of all food service workers. In the late 70s and early 80s, 15- to 24-year-olds accounted for about 20 per cent of the overall population in Canada. That number has declined to just 12 per cent.

Similarly, according to a survey 2022 State of the Restaurant Industry, released in the U.S. by the National Restaurant Association last month, the hard truth is that roughly half of restaurant operators expect that recruiting and retaining workers will be their biggest challenge this year and a full seven out of 10 operators reported not having enough employees to support demand at their restaurants. They do not expect that situation to improve. Restaurant operators are also looking to shrink food waste, amidst higher-than-usual food costs.

While there is no way of knowing what the future holds for labour availability, there is one certainty: digitalization and automation can diminish the impact of chronic labour shortages.

How digitization and automation address labour challenges

The two main components of running any successful food business are labour and inventory. Unfortunately, at under-staffed food businesses, operators are often basing their labour model and inventory on bad data. Therefore, data accuracy is step one. Having accurate data offers a flywheel to become more surgical about labour to ensure food safety, take buffers out of inventory and reduce waste.

There are five pillars of data accuracy achieved through digitization and automation. Data accuracy provides bottom line impacts on the allocation of human resources, while also ensuring food safety, inspiring customer trust, and reducing waste amidst ongoing labour shortages, specifically addressing:

• Availability: Items are available, without substitution, on the advertised menu.
• Quality and Freshness: With best-in-class product specifications and the longest possible in-storage freshness.
• Safety: Food safety is a paramount consideration for the customer, who is weary of news of recalls and of food outside the home.
• Value: While price is obviously a major consideration, FSR guests are enticed by food quality and freshness.
• Sustainability: Customers want the brands they patronize to be stewards of the environment and make business decisions that reduce waste and support sustainability.

These pillars are a heavy lift even in fully staffed businesses. With persistent labour shortages, the way to succeed is by deploying data-driven solutions.

How to ensure food safety without a workforce

A data-driven profile of food items offers the food business operator reliable information that ensures food safety. A solution combining hardware, software, and barcode or RFID technology provides insight into the food ingredients each location is receiving, storing, serving, and importantly where margins are tight, identifying where there might be waste. In fact, automated, accurate data capture for every item provides new visibility to maximize the promise of freshness.

Consider information gathered along the food supply chain that ladders up to a freshness guarantee:

• origin information;
• harvest date;
• safety details;
• condition details;
• days fresh; and
• brand information.

Any or all that information can be contained on a label, depending on how far upstream the label is created. The data on the label can be simply and quickly scanned by an associate with minimal additional training, enabling software to manage the inventory. By automating accuracy, restaurants and groceries do more with less back-of-the-house human resources, who can be allocated to consumer-facing front-of-the-house duties. Freshness due diligence can be purposed as the customer-facing brand attribute of “freshness you can trust.”

The sustainability effect

While ensuring freshness is essential, the issue of sustainability is also important. According to a post-pandemic study conducted by Deloitte, “Sustainability remains a key consideration for consumers in 2021 with 32 per cent of consumers highly engaged with adopting a more sustainable lifestyle.” That means restaurant operators should find ways to make their business processes more sustainable and be accountable to their guests.

Beyond consumer trends, sustainability makes good sense for cost control. The amount of food waste in food businesses is significant and expensive. Accurate data on ingredient expiry dates means items can be rotated properly to ensure they are used. For example, accurate data enables the operator to utilize ingredients that are nearing their expiry instead of having to discard them. Utilizing this data, they can establish an inventory system that forecasts and tracks food product use so that it can be offered to guests safely, and not end up as waste. That’s a win-win for both brand reputation and operations.

Chronic labour shortages will continue to have an impact on food businesses. However, technology is the key to a successful future, no matter what that future holds.  Digitalization and automation provide data-driven solutions that lead the way to a brighter day.

Adam Anderson is vice-president, Food, Avery Dennison Identification Solutions. He is responsible for the creation and execution of the company’s global strategies for the food segment which incorporate data-driven digital solutions encompassing hardware, software, and labels.