A Bellwether for Seguin’s Workforce
Belén Ledesma was just eight years old when she asked to go to work with her father, Juan Vasquez, at their family restaurant, El Charro on South Guadalupe Street. She started by washing the “small” dishes, mopping and sweeping. By the time she was 12, she was waiting tables after school.
“I still remember my teachers at Vogel coming to the restaurant and saying hi to me!” she said. Over the next 22 years, they built strong relationships with loyal customers and staff, and a steady business that sustained her family and the people they employed. Then COVID hit. Now, Ledesma says they are experiencing a second pandemic: their inability to hire and retain reliable workers.
“When the pandemic started, we closed for a month. I had 16 employees begging for us to open back up. Since our dining room was closed, I was splitting hours between all of them so that they could make some money,” Ledesma said.
Esther Rodriguez also has been living through the ups-and-downs of the pandemic in food service. A career server and now a manager with Rocket Wings and Dixie Grille, she said she worked closely with the owner and other managers to keep the businesses afloat, but eventually they had to close the Dixie Grille and focus efforts on Rocket Wings.
“We had to put everyone on hold,” she said. When the lockdown ended and customers returned, getting people back to work turned out to be a challenge. Rodriguez said many of her co-workers had already taken better paying jobs, or did not want to return because of safety concerns over COVID.
Like many food service employers, Rodriguez and Ledesma believe the Federal Pandemic Unemployment Compensation program that provided unemployed workers an extra $300 per week played a part. “When the government help started, it just completely changed,” Ledesma said. “People didn’t want to come back to work.”
But that program ended June 26 in Texas, and food service workers are still in short supply. With demand returning, and plentiful jobs available, what happened to all the labor? As it turns out, hiring is an across-the-board challenge putting downward pressure on restaurants.
“As consumer demand skyrocketed back, employers from across many sectors started scaling up all at once. They are competing for the same segment of workers,” said Joshua Schnueker, director of economic development for the city of Seguin. In our area, this means restaurants and fast food businesses are vying for employees with large manufacturers and warehouses, like Caterpillar or Amazon. “The hiring challenges facing food service are the same challenges facing big employers, too. It’s just that we are more aware of the problems facing the food service sector because it’s more visible to us as customers.”
Large employers have raised wages and are offering a multitude of creative benefits – from sign-on and referral bonuses to extra pay for perfect attendance. Even the city of Seguin is offering a refer-a-friend spiff to employees as they struggle to find qualified applicants, Schnueker said. Plus, such employers generally offer other benefits that a small restaurant cannot. “All of this means it is hard for the small mom-and-pop restaurant or fast food provider to compete successfully to hire and retain qualified employees,” he said.
Schnueker estimates that most food service and fast food franchises pay between $9 – $12 per hour. Some restaurants in our area pay around $2.25 per hour plus tips. According to Ledesma and Rodriguez, a server working primarily for gratuity may make $15 per hour for a four-to-five hour shift on a weekday, more on a weekend. And while most have raised wages at their restaurants, there’s only so much they can afford.
These employers are in hand-to-hand combat with employers like Amazon or the HEB Distribution Center, where starting salaries range from $16 to $17.50 per hour – plus benefits like healthcare. It’s tough to win that fight. And there’s one other thing Amazon and Caterpillar workers don’t have to deal with: rude customers.
Becca Johnson is the general manager of an area fast food restaurant, and she says that while workers are becoming more demanding and sometimes difficult to manage, customers are making it harder to retain employees.
“Customers need to realize we are short-staffed, working long hours with no breaks. Some of us don’t get a day off. Trying to do multiple jobs at once…keeping up with the fast-paced demand, trying to get everything perfect, and dealing with rude customers is not as easy as some might think,” she said.
The hiring crunch has forced restaurants to make some hard decisions, some of which have long-term implications for the future of the food service workforce. As a start, Ledesma cut back business hours, which means no night or Sunday shifts to fill. Longer term, some server positions may never come back.
“I want customers to know that wait times and prices will change. Our systems will change, too. We might not have waitresses anymore, and people may have to order for themselves,” Ledesma said.
Rodriguez said they are looking at similar options. “We are trying to prepare for all things unknown in order to keep the restaurant going,” she said, which means changing processes and using new tools to eliminate the need for positions that are hard to fill. “Of course, we still want to try and keep the people who choose to stay.”
Employees may no longer specialize in one role, but be trained to do any job at a restaurant. The use of self-order apps and QR codes will continue to accelerate. And when the cost of labor becomes more expensive than the cost of automation – those jobs will go away permanently.
“Small and large employers are seeing that it is a viable, sometimes necessary option to replace a human with technology or a process change, and to make that change permanent,” Schneuker said. “We are seeing this in manufacturing, in retail, in restaurants. It really started pre-pandemic, particularly in manufacturing, and is intensifying.”
That’s why Schneuker believes workforce development to be his department’s greatest priority, more so even than recruiting new employers. “Even if a human job is replaced by a robot, someone has to work on that new technology. Those are highly skilled jobs that are in huge demand and pay good wages. We have to begin upskilling people who are currently in highly-repetitive, low-skill jobs at risk for automation so that they are prepared for the jobs of the future,” he said.
Seguin has many of the tools and resources to do just that. Building new and robust connections between Seguin High School, Central Texas Technology Center, Texas Lutheran College and area employers will ensure that we are truly building a talent pipeline to attract employers that pay a living wage or better. This matters to everyone – especially those who would like to see a thriving cultural life and diversified retail and restaurants in Seguin.
“It’s all connected,” Schneuker said. “A skilled workforce will help us attract and keep employers that offer better paying jobs. Workforce development really is the key to improving the quality of life overall in Seguin.”