Restaurants beef up benefits

Owners are offering better employment packages to attract, retain talent

Despite countrywide labour shortages in Canada’s food services sector, David Schwartz’s two Toronto restaurants are fully staffed.

The co-owner and executive chef of Toronto-based Big Hug Hospitality, which operates Mimi Chinese in Yorkville and Sunnys Chinese in Kensington Market, has made it a priority to offer adequate wages and health and dental benefits to full-time employees working more than 35 hours a week.

“Hospitality is as much about how we treat our employees as it is about how we treat our guests. Paying people properly for time they work are no-brainers and should be a standard baseline,” Schwartz said.

Both Mimi Chinese, which opened in October last year, and Sunnys Chinese, which opened in August, have offered their employees benefits packages since day one.

Schwartz said several years of working in the industry has taught him first-hand the importance of employee retention and fair pay.

But perhaps that’s more true now than ever before.

Statistics Canada estimates more than 200,000 Canadians left their jobs in the food service industry during the COVID-19 pandemic.

According to Restaurants Canada, which represents more than 5,000 members in the food industry, there were already 60,000 job vacancies across Canada’s food service industry before the pandemic. As of June 2022, the number had

increased to 171,715 vacancies out of 1.2 million total industry jobs.

Now, economists say, if restaurants want to attract and retain talent, their best bet is to start offering better employment packages. And a growing number of Toronto restaurants are listening, offering health and dental benefits to staff as the food service industry continues to see vacancies surge and workers look for higher earnings and job security.

“In the food sector, the average wage offering in a job posting is lower than the minimum amount employees seeking work in that sector are willing to accept,” said David Macdonald, senior economist with the Canadian Centre for Policy Alternatives.

Macdonald calls this the “pay gap.”

“If employers are willing to erase that pay gap and raise wages and offer benefits, job vacancies can be filled,” Macdonald said. “But if employers are unwilling or unable to do that, then they will continue to have high job vacancies because at present we have a strong labour market and workers have choice.”

Offering employee benefits is becoming more common, Restaurants Canada said in an email.

“A survey conducted this past September across our member base representing 5,414 establishments showed 65 per cent of all food service operators are offering extended benefits to management-level employees and 49 per cent of fulltime staff,” the email said.

Labour shortages throughout the pandemic have been most severe in the restaurant industry, which has historically depended on cheap labour to turn a profit.

Simon Blackwell, owner of Blackbird Baking Co. — which has two locations in Toronto — said the past couple of years have been a struggle. His business lost more than half of its employees during the pandemic, dropping to 30 from more than 60 workers.

Blackwell said the loss of employees during the pandemic spurred him to increase wages and benefits, and he has managed to bring employee numbers back up to 75.

The business offers dental and medical benefits package to employees who work at the bakery for more than one year. Managers are eligible for benefits immediately upon hire.

“We’re fully staffed but it has been very difficult trying to find qualified people,” Blackwell said. “We worked through the pandemic and realized we had to and wanted to pay our employees more and give them benefits to get good people to work and stay at the bakery.”

Blackwell said the business pays 50 per cent of employee benefits and the remaining 50 per cent ($42.50) comes off a worker’s paycheque every two weeks. After three years, Blackbird Baking Co. pays 75 per cent of the benefits — and 100 per cent after five years.

Covering the employee benefits costs Blackwell around $40,000 a year. “As a bakery we’re quite technical, so it takes a level of skill to work here. It’s expensive to constantly be retraining bakers,” he said. “The longer people are here, the better the camaraderie and the workplace. It’s not ideal to have a revolving door of people.”

Schwartz said his employees don’t have to pay out-of-pocket for their benefits packages, which are paid for by the business on a monthly basis.

For Schwartz, this should be common practice. “We’re not doing anything that I think people should be patting us on the back for,” he said. “We have incredible staff retention, and we continually have team members bringing in friends and people they know who want to come work with us.”

“People are asking to be paid fairly and as they should be. I would hope that if one of our employees goes to work somewhere else, that they demand these things be provided in other work environments as well,” Schwartz said.