Restaurateurs sweeten the pot to keep employees

Sure, Brent Peterson and his wife own Trio's, a trendy restaurant that caters to the likes of Billy Bob Thornton and President Clinton when they breeze into town.

But they still know the value of a deft dishwasher.

"A good dishwasher is hard to find," says Mr. Peterson. "People laugh, but I'd rather treat a dishwasher like I would a manager and then promote from within."

Treating dishwashers like managers is the least that many restaurants have to do these days to keep "help wanted" signs out of their windows.

At a time when unemployment rates are smaller than a Happy Meal and eligible workers are as treasured as crme brle, restaurants are feeling squeezed.

To a surprising degree, they symbolize the depth of the tight labor market in the United States in the face of the longest expansion in peacetime history and the shift to a more service-oriented economy.

Indeed, during the next seven years, restaurants will need to add some 2 million workers to keep up with demand, experts say. As a result, owners are offering would-be waiters everything from extra vacation time to retirement packages in an attempt to lure long-term employees - not just nomadic actors between jobs.

"It pays to cater to employees," says Rita Walker of the Arkansas Restaurant Association. "The restaurant business has always been notorious for high turnover. That all seems to be changing as people look at the restaurant business as a profession."

Nationally, the restaurant industry is the second-largest employer after the federal government, accounting for 4 percent - or $354 billion -of the gross domestic product. Finding committed workers to help cut the chronically high turnover is a concern.

But here in Little Rock, Ark., the problem is particularly acute. Pick any night and almost any restaurant in Little Rock has a line at the door. From fast food to fine dining, people in this city of 181,000 look on their favorite restaurant as they would a member of the family.

"Little Rock is still like a small town, and we all like to think of our favorite restaurants as the 'neighborhood cafe' where we go regularly, see people we know, and enjoy old favorites from the menu," says Gregory Ferguson, a lawyer who dines out frequently. "People like to talk about restaurants like they would talk about what the neighbors are doing."

The city's nearly 400 restaurants brought in $264 million to the local economy last year, and with the unemployment rate at its lowest mark since the 1960s, Little Rock is at the shallow end of the labor pool.

"People most definitely eat out in this city a lot," says Gordon Gondek, co-owner of the Dixie Cafe, which has 24 restaurants in Arkansas, Tennessee, and Oklahoma. "With so many restaurants, it's simply hard to find help."

To attract and keep good employees, Mr. Gondek says he's had to sweeten the attractions. "We have a 401(k) plan and we match funds," he says. "We have a system that if an existing employee brings in a new [employee], we will pay them a $50 bounty."

He and other restaurateurs say that system of recruiting tends to be more reliable, because the new workers don't want to reflect poorly on the people who referred them.

FOR his part, Peterson of Trio's has opted for offering more vacation time. If employees work more than 30 hours, "they get one week vacation, and we pay half of their health insurance," he says. "After two years, they get two weeks of vacation."

Indeed, many say employee loyalty is a key to success. "Employee satisfaction equals customer satisfaction," says Eric Ruff, senior vice president for communication at the National Restaurant Association. "It's all about repeat business. If you have a good customer base, you keep it with good employees ... along with good food."

That's one reason operators of all types of restaurants are most concerned with recruiting and retaining high-quality workers, according to recent surveys.

To generate good working conditions, restaurant owners like Peterson realize they must pay a dishwasher $7 an hour and offer a chance to move up in the business. It's a small price to pay, they say.

"He already knows the restaurant," Peterson says. "It's better in the long run for business."