Q&A with The Shack’s Ian Boden: On the Labor Shortage, Post-Pandemic Opening & The Future of Restaurants


Restaurants are reopening, and that’s a good thing. As diners, getting to eat in a restaurant again marks a milestone, a return to some version of pre-pandemic life. But restaurant owners are faced with a new challenge. After 16 months of constant pivoting to ensure safety for guests and diners, devising creative solutions to keep their businesses afloat and workers employed, and weathering lower volume even as things reopen, restaurant owners’ biggest hurdle yet might be navigating a labor shortage to find staff.

In a recent article, the Washington Post laid out a bleak forecast for the restaurant industry: “The industry has 1.7 million fewer jobs filled than before the pandemic, despite posting almost a million job openings in March, along with hotels, and raising pay 3.6 percent, an average of 58 cents an hour, in the first three months of 2021.”

So, what’s the cause? Many restaurant owners are quick to cite extended unemployment benefits as the cause. But that’s only part of the picture.

“It’s not just about unemployment benefits,” says Aaron Deal, founder of the founder of Deal & Associates Restaurant Consulting. “The labor issue was a problem before the pandemic started. Now it’s even more of a challenge because you’re not just looking for one employee, you’re looking for five. I think that we will have this challenge through the fall.”

This points to the impact of an industry-wide reckoning, where inequities in wages, worker treatment, and safety have been brought to the forefront. A recent Eater story explores the myth of ‘No One Wants to Work,’ which underscores that, for employees, it’s really more about demanding better wages and work environments in which they feel safe. In other words, the reward has to outweigh the risk.

To get a sense of what it’s like for an independent restaurateur reopening their business, finding and retaining staff, and finding a new baseline for ‘normal,’ we spoke with Ian Boden, executive chef and owner of The Shack in Staunton, Virginia.

This interview has been edited and condensed for length and clarity.

Do you think that unemployment benefits are partly to blame for the perceived labor shortage?

I do. I hate to say it because there are a lot of people who need the assistance. But there are also a lot of people taking advantage of the system. I’ve had a couple experiences over the last year where there was work to be had but staff didn’t want to come back, even though contact was minimal and staff was vaccinated. Even if unemployment doesn’t pay the same as what you’d make working, you’re still getting money for nothing. But it’s not cut and dry.

What do you think is really at the crux of the labor issue?

The best example I can come up with is a juxtaposition of where the industry is now versus where it was when I was coming up. I moved to New York when I was 17 or 18 to start cooking. The job I got, there was a line of six people behind me. There were 100 cooks for one job; now there’s 100 jobs for one cook. Everyone is in such dire need of hands that they can do whatever they want and not deal with the consequences. When we were young—and I’m not saying it’s the right thing—but you could get blacklisted. I was raised to take pride in my work, and I just don’t think that exists with everyone anymore.

I know we trash millennials all the time, but I think they might have it more figured out than our generation. They understand that there’s more to life than work. And that’s just not how I came up. Work was my everything. It was my safe place, it was somewhere where I had iota of control, and there’s instant gratification in it.

Tell me a little bit about what reopening has looked like for you?           

The brutal truth is that reopening was scary as shit. First off, the safety of my staff and our guests are of the utmost importance, so I was very weary to reopen. But we all managed to get vaccinated prior to opening. We ended up opening two or three weeks prior to our second round of PPP running out, so not having to worry about payroll was huge.

The restaurant looks completely different. Our full capacity is 26 people and we opened up with 12 seats. We went from prix-fixe encouraged menu to a tasting menu only. We are a destination restaurant so about 60 to 80% of our business comes from out of Staunton, but I was worried about alienating my local clientele.

What other operational changes have you made?

We also raised prices. We’re doing a four- and five-course tasting menus; we started at $65 and $75 and then increased it to $70 and $80, with optional wine pairings. To do the wine pairings, we had to get a wine preservation system, buy new wine glasses, and rebuild our wine list. That’s a lot of initial expense.

We’re also only doing two seatings a night, an early and a late seating, and are open three nights instead of six. That experience was awesome for all of us. We only have ten dishes on the menu, plus an amuse-bouche and petit fours, so we really get to focus on everything we’re doing in a big way. What we found doing two seatings is that the stress on the kitchen and the front of house was completely alleviated. My staff is making more money than they were when we were in our previous incarnation. The restaurant is doing better financially better because we control our food costs a lot tighter. We can give better service and we have a happier staff. Obviously, it’s a restaurant so things still get stressful but it’s not like it was.

It’s interesting how these tweaks were born out of a really stressful situation but how much better your staff and operation is for it.

The truth is, I’m 43 years old. I’ve been doing this since I was 13. Luckily, my wife is supportive, but the business puts stress on our relationship. It’s time for me to refocus and learn what it’s like to be a regular human being as well as a chef. Now, what that is I don’t know. But it’s time to start learning.

My priority has always been my staff. When staff has any family issues I’ll work twice as much as I have to, to make sure staff gets the time that they need. This [new set-up] makes it a lot easier to do that. Another thing we did was increase the hourly rate of all of our front of house staff. I watched what happened when we closed down and I watched the fear in all their eyes, because they all had bills to pay. This was before the new unemployment benefits kicked in. They were so ill-prepared for it, and that really scared me.

There was a short period of time when we were doing takeout only and all my front of house staff went from $2.13 per hour to $10 per hour, because they weren’t making any money, at all. Now they’re getting $6 an hour, but they’re making anywhere between $300 and $700 a week in tips.

What about your back of house staff?

That hasn’t all shaken out 100% yet. I kept my sous chef on and kept his salary the same; it was the right thing to do. Because of the way unemployment was working, my wife and I could have drawn unemployment as business owners. My personal financial situation would’ve been much better if we just stayed closed. But my staff needed us, so we opened.

My sous chef has been with me through all this, but his last day was last Saturday. I’m hiring a chef de cuisine instead of a sous chef because I’m trying to give myself more of a life. He’s coming on at a higher rate than I’ve ever paid anybody. Even my dishwashers. The median household income in the county here is a little over $25,000 a year. I’m paying a dishwasher $10 per hour and then they’re getting a percentage of floor tips.

So, you have a tip pooling model?

Yes. We’re too small a restaurant; there’s no such thing as “it’s not my job.” There’s no distinction between front of house and back of house. It’s hard to keep a dishwasher. So, they’re making an extra $100-plus in three days on tips; it encourages them to work harder and to stay around. We actually lucked out; we have a husband-wife team from El Salvador that’s working with us right now.

It sounds like the culture in your restaurant is one where there isn’t a divide between back of house and front of house. There isn’t the same wage disparity.

There’s still a wage discrepancy because back of house doesn’t make what the front of house does. But I don’t know how I can ever fix that. The only thing I can think of is to switch everyone to hourly and do a complete tipped house. But the payroll taxes will kill us if I have to pay $20 an hour. Unless they do away with the tipped tax credit in Virginia, there’s just no way to do it.

Not to get political, but the only option is for the federal government to incentivize paying staff better. If they would help us with taxes to pay our staff better, then I think the unemployment would—not disappear—but it’d be crazy low, and it would save the local governments a ton of money.

What is the cost of increasing wages? I think what the average diner doesn’t realize…

They have to pay for it. There’s no black and white when it comes to the livable wage and the [hourly wage] increases. I’m tired of hearing that chef-owners are bad people, that we’re responsible for paying a livable wage. Also, the livable wage in New York City is not the same as a livable wage in Staunton.

It’s all cumulative. So, if have to pay my dishwasher $15 an hour, that means that my sous chef has to be making $65,000, which means that my chef de cuisine has to be making $80,000 a year. I have a 22-seat restaurant. What the public doesn’t understand is—they keep touting increasing the minimum wag, which I totally agree with—but I’m not rich. Someone has to pay for it. Food in restaurants is too cheap already. You still hear people say, ‘oh this place is expensive,’ but they’re the same people who say that $15 an hour still isn’t a livable wage.

And there are things that people don’t think about that we have to pay for on daily basis. Gloves are a fortune. Our water bill, gas bill…everything’s higher. Even fast-food restaurants increase their prices by 1.25% annually, but that doesn’t keep up with the cost of goods. Restaurants like mine—how often do we raise prices? I’ve been open seven years and raised prices three times.

Did you consider not reopening your restaurant this last year?

Of course. And I still consider it, to be honest. By the time The Shack is ten years old, if there are certain things that I don’t see lining up, I’ll close. And ten years is a good fucking run.

Can you spell out what has to line up for you to keep going?

It has to do with my quality of life, my wife’s quality of life. It’s a lot about staff retention. I think we have a good culture here. And the way we maintain that is by supporting our staff as much as we can. I actually took a few years off cooking because I was looking at the chefs who I was working for in the early 2000’s and I was like ‘you know what, I don’t want to be those guys.’ They were miserable, they were beaten, and they were broke. I think all our ideas of what success is has changed. Financial success is great. But there’s more.

Layla Khoury-Hanold is a freelance journalist covering food, travel, and lifestyle stories. Her work has appeared online with Food Network, Refinery29, the Chicago Tribune, and the James Beard Foundation, and in print with Drinks International, Our State, The Roanoker, and INDY Week. Follow her writing and food adventures on Instagram @words_with_layla.

Restaurant Revitalization Fund: Get Ready to Apply

There is good news for restaurants: relief is on the way. President Biden recently signed the Restaurant Revitalization Fund into law, a federal grant relief program that will award $28.6 billion in funds to help struggling independently owned restaurants and bars. The passing of this relief program marks a milestone in the Independent Restaurant Coalition (IRC)’s tireless lobbying efforts on behalf of the restaurant industry and comes not a moment too soon: According to the IRC, there are more than 500,000 independent restaurants in the U.S. which employ 11 million people. And no single industry has contributed more to unemployment during the pandemic than the restaurant industry, counting more than 2.5 million unemployed restaurant and bar workers.

On April 13, the IRC hosted a town hall with guests from the Small Business Association, including associate administrators Patrick Kelley and Julie Verratti, to share the latest on the application process for the Restaurant Revitalization Fund. The online application will be opening soon, and applicants are encouraged to get their materials organized now and be ready to apply on day one. To access a video of the town hall, click here.

As part of his commitment to supporting the restaurant community, chef Aaron Deal, founder of Deal & Associates Restaurant Consulting in Roanoke, VA, along with journalist Layla Khoury-Hanold, have put together what we hope is a helpful primer for restaurant owners getting ready to apply for the Restaurant Revitalization Fund. Things are constantly being updated, so please visit Saverestaurants.com for the most up-to-date information.

Entities eligible to apply for the Restaurant Revitalization Fund

Restaurants, which by definition also includes food stands, food trucks, food carts, caterers, bars, saloons, lounges, taverns, snack and non-alcoholic beverage bars (which can include, for example, coffee and ice cream shops), bakeries, brew pubs, tasting rooms, tap rooms, breweries, microbreweries, wineries and distilleries, and inns. Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products.

Note: Restaurant Revitalization Fund applicants no longer need to sign up for a SAM.gov account or have a DUNS or CAGE identifier.

Businesses that are not eligible

Businesses are not eligible if they are part of an affiliated group with more than 20 locations, are a state or local government operated business, have pending applications under the Save our Stages program, if they are publicly traded, or if the business has permanently closed.

Calculating your grant amount

The maximum grant amount is $5 million per individual restaurant and $10 million per restaurant group.

For businesses in operation before 2019:

Take your 2019 gross revenue minus 2020 gross revenue and subtract the total amount of all PPP loans you received.

For business that opened in 2019:

Take the average of your 2019 monthly gross revenue and multiply that average by 12, then subtract your 2020 actual revenue and any PPP loans you received.

Note: businesses that opened in 2019 may also use the calculation below (guidance provided by the SBA on the town hall suggests using the one that gives business owners the potential for the most amount of funds)

For businesses that opened in 2020 or in 2021 prior to March 11*:

You are eligible to receive funding equal to the eligible expenses incurred in 2020 (or in 2021 prior to March 11) minus gross revenue (2020 only) and any PPP funding you received.

*If you spent any money to get your doors open (even if you didn’t actually open) by March 11, 2021, then the business is eligible to apply

Note: Using EIDL loans and ERTC proceeds do not disqualify businesses from participating in the program.

Eligible expenses

This includes business operating expenses, such as rent, payroll, utilities (such as gas, electric, water, CO2 contracts), maintenance expenses, construction of outdoor seating, supplies. Eligible expenses also include business debts, including principle and interest (though you can’t pre-pay any loans).

Other examples provided by the SBA on the town hall include insurance, licensing fees, Point of Sale contracts or equipment. If you are an entity within the alcoholic beverage manufacturing space, eligible expenses also include cost of goods sold and raw materials, such as malts, hops, or yeasts.

Covered period for using eligible expenses

Eligible expenses include those incurred from Feb 15, 2020 to March 11, 2023. If you do not spend all of the funds by March 11, 2023, you will need to return the remainder to the government.

There will be a 21-day priority window for women- or veteran-owned restaurants, and socially and economically disadvantaged businesses

Ownership is defined as 51% or more.

The definition of socially and economically individuals (as written in the statute in the Restaurants Revitalization Fund and read aloud during the town hall): “Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Individuals who are members of the following groups are presumed to be socially disadvantaged: Black Americans, Hispanic Americans, Native Americans (including Alaskan natives and native Hawaiians), Asian Pacific Americans, or sub-continent Asian Americans. Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.”

As Nya Marshall, owner of IVY Kitchen in Detroit, pointed out, the 21-day priority window provision is especially critical for the BIPOC community. As a business owner, she was not able to access funds through other previously offered federal relief programs, sharing that “During the initial stages of the Paycheck Protection Program, only 130 Black-owned restaurants received PPP loans in excess of $150,000—less than a quarter percent of all loans awarded. At least 13% of small businesses are Black-owned.”

Prepare now and apply on day one

Start gathering supporting materials, which can include 2019 tax returns, 2020 tax returns, bank statements, or profit and loss income statements. Even if your business doesn’t fall within the priority window reserved for women- and veteran-owned restaurants and socially and economically disadvantaged businesses, you should still submit your application as soon as the portal opens.

Help get the word out

The SBA’s Julie Verratti urges everyone in the restaurant community to inform others about the Restaurant Revitalization Fund. “Tell everyone you know. Get the word out so that we get to smallest of the small, underserved communities so folks have access to these much-needed funds.”

The IRC has created this handy shareable flyer and social media graphic.

The Future of Dining Out

Aaron Deal is the founder of Deal & Associates Restaurant Consulting (DARC) in Roanoke, Virginia and a certified executive chef with more than 20 years’ experience in restaurant operations. A year after the COVID-19 pandemic first swept the world and decimated the U.S. restaurant industry, Deal shares his thoughts on the future of restaurants and how these changes will affect diners’ experience.

By Aaron Deal, as told to Layla Khoury-Hanold

Outdoor Dining is Here to Stay

The definition of a restaurant as a four-wall entity will expand to include outdoor dining for many more restaurants. And unlike takeout, I see this as a pandemic pivot that will stick around. Even in larger cities where there isn’t an abundance of space, restaurant operators have found really creative ways to transform parking spaces and sidewalks with aesthetic and functional touches to create an extension of the restaurant’s look and feel. Going forward, the outdoor service training will be a larger part of the conversation for operators, so that the experience isn’t just built on survival. This translates to a much more elevated experience for the diner in the future, too, no matter where they’re sitting.

Service and Hospitality Will Be Back

Service will be back in all its glory. I have no doubt. One of the things I’m seeing, despite the reality of our new normal, is that people are still trying to grasp onto that pre-pandemic notion of dining out and they still have that same expectation. It’s going to take some time for the public to relearn what the new restaurant landscape looks like regarding style of service, steps of service, and attention to detail. But there’s going to be businesses, like Gramercy Tavern in New York City for example, that built themselves on that high level of service and will come back to doing it.

Your Future Restaurant Meal Will Cost More

Restaurants are going to be more expensive. Prices for commodities have increased across the board for the last 10 to 15 years. Despite that, you don’t see much of an increase in a restaurant entrée. Chefs are paying more for things like beef and fresh seafood, costs that aren’t easily passed on to the guest because people are willing to sacrifice quality for price. Especially now with folks being out of work, people are being conscious about where they’re spending their dollar.

I think people will be unhappy that things are costing more. But if we want to see any real change regarding paying staff a fair and consistent wage, ensuring that we have a quality product that’s prepared skillfully and safely, and that dining areas are being sanitized properly, that’s the reality. There are so many things now to think about that are going to require so much more effort. That translates into dollars, which translates into expenses from the guest perspective. People are going to have to understand that.

Your Favorite Restaurant Still Needs Your Support

Most places aren’t going to be walking back into the same business that they were doing in 2019. People are still going to be operating at 35% to 40% less than normal because of distancing requirements and because people are hesitant to dine out.

Throughout the pandemic, I saw two different consumer perspectives. There were folks who supported their favorite restaurants by buying to-go meals and merchandise because they understood that their dollar is what’s going to keep the places they love afloat. But we also saw people step away because they said, “Look, I’m not willing to pay $40 for an entrée that’s coming in a to-go box. You let me know when it’s back on the plate.” Well, guess what, it may not ever be back on the plate if you’re not willing to spend a little extra money to help keep that business operating.

Final Word: The Future is a New Golden Age of Restaurants

I think we will experience a new golden age of restaurants, but probably not until 2022. That’s why it’s so important that consumers continue to support local restaurants now, so that we have a foundation to build back better for both hospitality industry workers and diners.

Layla Khoury-Hanold is a freelance journalist covering food, travel, and lifestyle stories. Her work has appeared online with Food Network, Refinery29, the Chicago Tribune, and the James Beard Foundation, and in print with Drinks International, Our State, The Roanoker, and INDY Week. Follow her writing and food adventures on Instagram @words_with_layla.

Client Spotlight: Well Hung Vineyard – Roanoke

 

Author: Layla Khoury-Hanold

Anthony Herring is a self-proclaimed accidental restaurateur. He is the owner of Well Hung Vineyard in Gordonsville, Virginia, a company that makes wine with Virginia-grown grapes. Since it is technically not a winery, Herring couldn’t open a tasting room without also serving food. In August 2019, he opened the first location of Well Hung Vineyard’s restaurants, where wine-friendly fare like charcuterie plates and crab flatbread complement Well Hung Vineyard’s wine by-the-glass, bottle, or flight offering.

When Herring was ready to expand and open a second location, he consulted Aaron Deal, founder of  Deal & Associates Restaurant Consulting (DARC) in Roanoke, Virginia.

“I didn’t know a lot about Roanoke and relied on Aaron’s expertise for the market. He confirmed that no other restaurant was doing close to doing what we do,” Herring says. “Roanoke is mainly a beer town.  There’s no wine-themed or wine-only restaurant in downtown Roanoke.”

Herring’s business model also thrives on tourism, so he was considering other Virginia markets, including Richmond and Fredericksburg. Deal put Herring in touch with the Roanoke Chamber of Commerce to provide data on tourism in 2018 and 2019. Herring liked the numbers he saw, and when he found an ideal location in downtown Roanoke, he committed to investing in a Roanoke location and hired DARC to help execute his vision.

Herring, who owns two different companies, works seven days a week, and is based in Charlottesville, Virginia, leaned on DARC to be his boots-on-the-ground operative. Thanks to the firm’s reputation and relationships with local officials, DARC was able to easily navigate the complex permitting process with health department, city, and ABC officials, as well as obtain the business license. DARC also helped with staffing by sourcing and vetting talent, resulting in the successful hiring of a general manager. DARC worked directly with the general contractor to spec kitchen equipment and mechanical, plumbing, and electrical work. Coordinating with both the general contractor and the project’s architect, the consulting company ensured that build-out was on track and in line with the proposed vision.

Since Well Hung Vineyard is a wine-focused restaurant, there was heavy emphasis on the bar area. DARC worked closely with the interior designer to optimize the bar layout, taking into consideration plumbing, electrical wiring, service flow, and wine glass and wine bottle storage and display. Because Well Hung Vineyard’s Roanoke location opened in February 2021, Herring and Deal had to consider capacity both during and after COVID-19 to account for social distancing and state-mandated capacity restrictions.

“Aaron understands that restaurants need to fit a certain niche to make it successful,” Herrings says. “He’s not just a food consultant—he [takes] a big picture [approach] from operations to financial to food and the customer experience, which is very important. I believe he will be an integral part of the business going forward.”

Layla Khoury-Hanold is a freelance journalist covering food, travel, and lifestyle stories. Her work has appeared online with Food Network, Refinery29, the Chicago Tribune, and the James Beard Foundation, and in print with Drinks International, Our State, The Roanoker, and INDY Week. Follow her writing and food adventures on Instagram @words_with_layla.