Good morning! Hope the last days of August have you watching more sunsets than Netflix. 🌄

We’re going elbow-deep into labor inefficiency: the cause and effect of labor shortages and what you can do about it.

What’s on tap in this issue:

• Labor shifts are changing the game
• Workforce migration 
• Staffing gone wild?

Industry news

What’s cookin’ in the industry? 

Sluggish hiring, smaller tips, and staff bailing after just a few shifts have become the norm. This year’s labor challenges are forcing restaurants to rethink everything from workflows to training. 🏅

The new labor math: new costs, new calculations

The restaurant labor scene in 2025 is a tricky tightrope walk that involves balancing fewer new hires, shrinking tips, and high turnover costs while still maintaining smooth operations. 

📉 Job growth slows to a crawl. Restaurants added just 400 jobs in June, then lost 300 in July, according to the U.S. Bureau of Labor Statistics. Slower hiring has exposed scheduling inefficiencies and idle staff during off-peak hours.

💸 Turnover takes a toll. Nearly 42% of operators face 11%-25% annual turnover, with another 12% seeing over 25%, driving up recruiting and training costs. Cross-training remains underutilized, with only 28% of restaurants having more than half of their staff trained to work in multiple roles.

💵 Tipping trends down. The average U.S. tip rate fell to 14.9% in Q2 2025, compared to 15.5% in 2023 and 15.2% in Q1. With tips making up 23% of wages in 2024, even a slight dip hit staff wallets hard.

🤖 Tech offers a lifeline. A Legion survey found 75% of operators use automation tools, particularly for scheduling and onboarding, to reduce hiring burdens.

Where did all the workers go?

The Restaurant365 Midyear Report paints a clear picture: the 2025 labor market isn’t easing up anytime soon. 

Slower job growth, shrinking tip rates, and persistent turnover are creating operational headaches that go beyond simply filling open positions. 

For many operators, the real challenge is keeping the people they already have, using them efficiently, and finding cost-effective ways to staff shifts without burning out the team or the budget.

👋 A shrinking labor pool. Starting in 2024, roughly 4.1 million Americans will retire each year. Even with full employment, the gap between labor supply and demand is expected to leave 1.2 million jobs unfilled.

🚪 Retention woes. While 82% of restaurants are actively hiring, many see new hires quit after only a few shifts. Lack of onboarding structure and limited growth opportunities are among the top reasons for early exits.

💲 Labor costs keep climbing. In 2025, 89% of restaurants report higher labor costs, with 73% expecting additional increases this year. Nearly 27% saw 6-14% spikes, and 11% got hit with 15%+ increases.

📍 Regional disparities. Staffing remains 3-5% below pre-pandemic levels in states like Massachusetts, California, and West Virginia, while Utah and Idaho show stronger rebounds.

Timely tips

Three tips for success

💡 Let tech do the heavy lifting. Your team shouldn’t have to babysit equipment or chase down maintenance issues between lunch rushes. Automation tools like ResQ’s sensors can flag equipment issues before you lose profit to food waste, freeing your staff from the double duty of attending to guests and equipment monitoring.

💭 Rethink scheduling. You might be overstaffed and still shorthanded. Without forecasting tools that align staffing to sales patterns, you end up paying for people you may not need. Smarter scheduling is about having the right people at the right time.

📈 Treat onboarding like a growth plan, not a checklist. Stop thinking of onboarding as Day One paperwork and start thinking of it as a 90-day launch. Build clear career paths, offer ongoing training, and show your team how they can grow with you, not just clock in.

Break time

When the schedule says fully staffed…

…but the lunch rush says otherwise.

- Kareem at ResQ 

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Shameless plug

What does ResQ do?

ResQ is the most trades-friendly facilities management platform that streamlines restaurant R&M operations, while providing value to the trades industry.

Operators can efficiently track assets, create work orders quickly, and choose from a network of quality vendors to work with.

Love free samples? Same here. Schedule a FREE demo to learn more about ResQ.

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