As Summer Arrives, Australia Is Ready To Party – But a Nationwide Staff Shortage Is Jeopardising Our Post-Lockdown Fantasy

Rose (not her real name), a 33-year-old student, started working in hospitality straight out of high school. She managed a restaurant in New York, nightclubs in Melbourne and, until recently, worked part-time at a busy, well-known restaurant in Melbourne’s CBD. The industry had “always been fun”, she says, but when she found herself recalled to a deserted venue to perform maintenance during Melbourne’s extended lockdowns, she had an epiphany.

“‘What the fuck am I doing?’ I thought. ‘Am I going to die in hospitality in this dank venue?!’”

Without the tips and the atmosphere, there were few reasons for sticking around. “All the joy was taken out of the job, and there I was painting a wall in an empty venue just to get a government handout,” says Rose, who requested not to be named due to fear of repercussions from her ex-employer. “I’m not a tradesman. It felt like a piss-take.”

She quit not long after and enrolled in a massage therapy course.

Rose is part of a tide of experienced hospitality staff who, burnt out and craving stability, have withdrawn their polished service skills from the country’s embattled hospitality sector. This at the same time as hundreds of thousands of migrant workers remain locked out of the country, leaving owners and operators unable to function at full capacity at the busiest time of year.

Veterans who have been in the industry 15, 20, 25 years – or more – say this is the biggest crisis facing hospitality in decades.

Disenchanted career hospitality workers, reduced migrant labour and dwindling interest in the hospitality industry among a younger segment of the workforce are all contributing to this unprecedented lack of people power. It’s a perfect storm for hospo businesses big and small, as they struggle to staff their venues at a moment when millions of Australians are feverishly trying to drink and dine out after months in lockdown.

At best, venues are unable to provide the level of service and quality that customers are used to. At worst, they’re slashing menu offerings, significantly reducing opening hours and even shutting for several days each week. All this as rent, insurance and other outgoings pile up after almost 18 months of financial losses.

“No staffing means less revenue, and this means less opportunity to pay back Covid debt,” says Maurice Terzini, of Bondi institution Icebergs.

“Five days trade doesn’t pay the bills,” says Joss Jenner-Leuthart, CEO of Sydney and Melbourne chain Belles Hot Chicken. “Compounding this will be rental abatements starting to be payable in addition to full rent – in other words, more rental outgoing than pre-Covid, with less revenue.”

At a time when the country’s restaurants, cafe, bars and pubs need every service hour they can get to repair the financial damage incurred since lockdowns and density restrictions began in March 2020, they’re being forced to shut for days at a time. Not just because they don't have adequate staff, but to protect the staff they already have from getting burned out.

For newer operators, opening-night jitters are being replaced with the heartbreak of having to push back opening dates. In Sydney, the opening of new Bondi bar Chuck Trailer’s was delayed as its owners worked long shifts at their other busy venue, Neighbourhood Bondi, which has lost staff to larger, better-resourced businesses. It’s the same story in Melbourne, where new operators are holding off media coverage until they can adequately staff up to manage an influx of diners.

Angus Nicol, co-founder of Sydney’s Black Market Roasters, has been working 14-hour days, seven days a week at his venues – including a new cafe in Marrickville – to plug the gap in available baristas. To help alleviate the pressure on smaller cafe owners in the same position, Black Market is offering barista-training services – for free – to neighbourhood cafe owners so they can upskill their dishwashers and waitstaff.

"We’ve had to cancel over 5000 diners"

Even the country’s best-known restaurants aren’t immune. Three Blue Ducks, which has venues throughout Victoria and New South Wales, including Byron Bay, is struggling to recruit workers. And in Melbourne’s CBD, one of this year’s most highly anticipated openings – Nomad – has been forced to cancel thousands of reservations at its new 100-seat diner.

“We’ve worked so hard to keep going through the pandemic. We’ve looked after our team; we’ve negotiated every hurdle to open the doors to our new restaurant. Feedback has been incredible,” says co-owner Rebecca Yazbek. “Not even unskilled workers, who need to be trained from scratch, are applying, let alone skilled [workers]. Without overseas travellers, students and interstate workers, the situation is dire, and ... we’ve had to cancel over 5000 diners. Pretty deflating when demand is there, the product is good, and there are tens of thousands of job ads and no applicants.”

Tom Peasnell – co-owner of several Melbourne venues, including Dexter, Takeaway Pizza and Dom’s Social Club – says prior to the pandemic, the business would receive “fistfuls” of applications for vacant positions. Lately, it’s not getting any.

Peasnell lost staff – including several managers who moved back to New Zealand – during the 2020 and 2021 lockdowns. At the same time, businesses like his have also lost the opportunity to hire international students and backpackers, who have historically filled front-of-house and kitchenhand roles at many venues. Many of Peasnell’s former staff haven’t wanted or been able to return, leaving gaps in the roster no one seems willing to fill.

More than 30 operators have shared similar stories with Broadsheet – about job ads up for months that earn just a handful of applications, if any.

“Where we used to receive 30-plus applications for a job, now we are lucky to receive 10,” says Matt Jenkins, the group human resources manager at Applejack Hospitality, which employs 200 people across eight venues in Sydney, including Forrester's and Bopp and Tone.

“Expensive Seek ads are lucky to generate a handful of applicants, and of those, many are unqualified. Trawling Facebook groups for any potential candidates has become the norm,” says Michelle Grand-Milkovic of Barangaroo's love.fish, which is operating at roughly 50 percent of its pre-Covid headcount.

“I’ve advertised jobs everywhere and have got next to no responses,” says Doug Milledge, co-owner of Albert’s, a new wine bar in Melbourne's southeast. “The staff we have managed to find are quite young – high school students and first year uni – who are great but … there is a real shortage of skilled, trained staff.” On the weekend, Milledge, desperate for servers, got his brother-in-law to come in and wait tables for the first time in his life.

“We’ve called on friends, family, friends of friends, people who have their own businesses or other full-time jobs just to come in and help out with carrying plates,” says Michelle Badek, operations manager at Al Dente Enoteca, in Melbourne’s north.

Albert’s and Al Dente are the rule – not the exception. Things are so desperate, a prominent new Melbourne restaurateur told Broadsheet they have someone working on the floor who had never carried a plate before.

“The only consolation is you know everyone’s in the same boat – it’s not like there’s a restaurant around the corner flush with staff, offering better service,” says Milledge.

Stefano Catino, co-owner of several popular Sydney bars, including Maybe Sammy, tells Broadsheet that, in addition to reducing opening hours, he and his team have rejigged food and drink menus “to be more manageable with fewer staff”. That means more dishes and drinks where “prep is as easy and quick as possible”.

The biggest daily stress

Staffing shortages are “the biggest daily stress any operator is facing at the moment”, says Adam Wright-Smith, owner-operator of South Melbourne restaurant Half Acre. “Though larger companies that can afford a short-term increase in wages have the advantage in the current market. Staff are generally, and understandably, going to the highest bidders. But this means independent, smaller venues are finding it hard to compete because they don’t have the capacity to pay those increased wages,” he says. “It won’t last forever, but it’s here for the next six to nine months.”

Half Acre is offering a pandemic bonus of $4 to $6 on its usual rates until at least mid-next year, hoping the team can weather the next few months and “hold on for dear life.” 

He estimates some venues are paying rates that are 25 to 30 per cent higher than usual in an effort to not only recruit new staff but retain their own – who, in a workers market, might get a better offer.

As punters brace for associated price hikes and service disruptions, hospo workers are assessing their position and, after years with very little bargaining power, are demanding higher wages. Throughout the industry, operators are relaying stories of new recruits requesting $10,000 to $15,000 above the industry award, or receiving sign-on bonuses of up to $5000. Hospo forums, including the Melbourne Culinary Exchange and the Melbourne Bartender Exchange, are seeing bartenders and kitchenhands offer their services to the highest bidder. In Sydney, Rockpool Bar & Grill is offering to pay dishwashers $90 an hour on Friday and Saturday evenings.

In the eyes of many, this is a good thing for the industry. Raising prices is always a stressful prospect for hospitality operators, who understand better than anyone just how quickly the wrong numbers can drive customers away. For decades this pressure has suppressed wage growth in the industry and slowly whittled down margins for owners, who sometimes earn little more than their staff while carrying huge amounts of personal debt, liability and daily stress. In this sense the labour crisis may be a blessing in disguise – a chance for the entire industry to bump up its prices without fear, and begin paying staff the kind of wages they’ve been missing out on for decades.

“For too many years, the vast majority of hospitality workers have been seen as an infinite resource. This crisis has changed that perception,” says Belles’s Jenner-Leuthart. “Good operators have always known the importance of treating their people as humans and cultivating a culture that goes far beyond an hourly rate.”

“For once – and don’t we know it, having worked our way up the hospo hierarchical ladder – the little guy in hospo feels they have the power,” says Al Dente’s Badek. “Kitchenhands, dishies and bussies are getting paid more per hour than ever before, and if there’s a bigger, more established business out there offering more money than a small business can, you lose that staff member.”

To cover surging wages, Al Dente has identified dishes that require more man-power and can therefore justify a bump in price. “Our pasta, for example, takes our kitchen staff two to three days – making the dough, letting it rest, rolling it out, cutting the shapes, hand-folding, snap-freezing... Not to mention the filling, which takes a day to make.

“We’ve increased restaurant items by around $1 per dish, and some of our online and shop items by $1 to $2.”

Badek says explaining the price rise to diners who aren’t “sympathetic to what our industry has been through over the past 18-plus months” is “sacrificial, exhausting, demoralising and frustrating”.

“We’re all pushing so hard, with far more responsibilities than ever before as managers of people and business owners. So many of us are just in survival mode until Christmas is over, and we can recuperate and regroup in January.”

A Melbourne restaurateur, who asked not to be named for privacy reasons, has created a support group with a few restaurant owners “whose mental health is not good”; they’re working 80-hour weeks and facing “the prospect of selling their businesses under value, after decades of blood, sweat and tears”.

A nationwide crisis

The challenges are particularly acute in Victoria and New South Wales, which have both emerged from prolonged lockdowns. But hospitality venues in every state are feeling the pinch.

Arkhé – a sleek new Adelaide bar and restaurant from Jake Kellie, former head chef at Michelin-starred barbeque restaurant Burnt Ends, in Singapore – was able to recruit a core kitchen team, mostly through word of mouth. But “kitchenhands, front-of-house and bar positions have been extremely hard to fill”, says co-owner Ena Vujcic.

“Prior to Covid, a reasonable job ad would attract around 100 applicants. With Arkhe, we had around 20 suitable applicants apply for each role. It shows how many people have either exited the industry or don’t want to take the risk. There were a lot of cases in which applicants were keen to join the team but fearful to leave a longstanding job.”

Cale Mason, owner of Perth's Si Paradiso, is seeing the effects of a great hospitality resignation and reduced migrant labour on the west coast.

“You have yourself a pretty tiny pool to build a team from – from a hotel pool to one of those clam splash ponds. Hence the need to focus even more than ever on great staff culture, training and development.”

Wes Lambert, CEO of Australia’s Restaurant & Catering Association, says it’s a crisis threatening venues across the country, “from the smallest regional towns to the biggest metropolitan centres”. The association estimates that there are close to 100,000 positions vacant in Australia’s hospitality industry this month.

“The job ads online continue to increase, and it appears that Australians don’t want them.”

Early starts, late finishes, physically and psychologically demanding duties, as well as insecure employment and historically low wages – these are just some of the reasons workers like Rose are leaving the industry. Add to that list the catalogue of wage-underpayment scandals that have riled the industry in recent years, and hospitality might not seem an inviting prospect for young Australians deciding on their career path or looking for a job to get them through university.

“There’s been a big shift – people who were career hospitality workers have had this time away and realised how tough the hospo life is,” Dexter's Peasnell says. “What used to make this job so appealing was that you’d get to work in these fun, fast-paced environments with lots of different people, and it would create a really dynamic culture.

“And decent numbers were being done.” This meant owners could offer sweeteners such as discounts, or free meals and drinks. Now, not only has a lot of the fun gone, he says, but the perks have too.

Wes Lambert also points out that young people are now in a position to work on their own terms – they have other hustles, like reselling online or even trading crypto-currencies, that don’t have to eat into their evenings and weekends.

In a Broadsheet story about the crisis last year, restaurateurs predicted that the lack of government support for migrant workers was likely to provoke a serious shortfall in this valuable workforce. Some 68 per cent of Australian restaurants lost an international chef during the pandemic, according to a recent Menulog-commissioned survey of 541 operators conducted by Lonergan Research.

“International workers have always provided the restaurant industry with a nice buffer when it comes to hiring, not to mention the added sense of diversity, skillset and perspective it brings, ” says Nathan Dalah, co-founder of The Fishbowl Group, the fast-growing salad chain with more than 20 locations in New South Wales and Victoria. “The sector just isn't equipped to handle this much pull on supply in such a short period of time.”

While Prime Minister Scott Morrison announced that fully vaccinated international students and skilled workers can come to Australia without a travel exemption from December 1, the failure to fast-track their return, Lambert says, was a disaster.

As several other venue owners Broadsheet spoke to said, it will take time for the border reopenings to begin to impact the workforce. And the process has already been delayed as the government considers how to deal with the new Omicrom Covid-19 variant.

“It’s not as easy as, ‘Hey, the borders are open – here is 35 per cent of your workforce back,’” says Half Acre's Wright-Smith. It takes months to hire, train and induct new staff, and there’s no certainty around the numbers of foreign workers who will return.

The government's policies “caused a mass exodus of migrant workers”, Lambert says. “The productivity of the country will suffer greatly as we skill up Australian residents and citizens.”

A long-awaited bargaining power

And homegrown candidates, as we know, will be harder to come by.

Lockdowns, Lambert says, have “certainly chipped away at the armour of the true hospitality professional, but the pay and conditions have very much improved in recent years”.

Karma Lord, a spokesperson for the United Workers Union, disagrees. “The industry continues to preside over endemic wage theft and extreme job insecurity, with four out of five workers casually employed,” she says. “Trained, experienced workers have quit this industry in droves because they are fed up.”

As dedicated restaurateurs scramble to provide the festive fun we have all been yearning for, Lord is concerned that bandaid measures, such as sign-on bonuses and other incentives, will mean that “workers will find the rug pulled from underneath them when competition for workers starts to ease off.

“If you want to build a loyal and stable workforce, and a sustainable business model, pay your staff properly and offer them permanent jobs.”

For hospo workers, this kind of bargaining power is long-awaited, and venue owners interested in sustainability and staff welfare are welcoming the honest conversations with new recruits.

“From day one, we have wanted everyone to be paid what they are worth and to have working conditions which attract more staff and are fair, so it has been really refreshing to have staff come in and know exactly what they want out of their contract,” says Vujcic in Adelaide.

Rose, for one, hasn’t turned her back on hospitality completely; she has agreed to work part-time at a friend’s new venture, which is due to open in January.

“I wouldn’t be going back unless I was clear on who I was dealing with. The job has good financial backing and it’s a well-thought-out project. They are able to be flexible with my studies.” And, at a time when she knows it’s next to impossible to get staff, Rose says she feels much more empowered to negotiate deals that suit her.

Additional reporting by Sarah Norris and Katya Wachtel