Addressing Labor Challenges with Robotics in the Restaurant Industry

According to the Bank of America's latest report on the restaurant industry (https://business.bofa.com/en-us/content/restaurant-industry-report.html?cm_mmc=social-na-linkedin-_-restaurant_report-_-2024_soc_bus_rstrant_stateofrestaurantindustryq2-q4&dclid=CMiwtP7ZwokDFa84iAkdruwAUQ) restaurants are facing ongoing labor challenges, including rising wages, high employee turnover, and a values-driven, younger workforce. In 2024, although staff shortages have eased somewhat, wage increases remain a key issue, especially in states with new minimum wage laws. For instance, California's law requires fast food operators to pay a $20/hour minimum wage, which has driven operators to explore options to manage costs without sacrificing service quality. Despite the anticipated impacts of high wages, California fast-food restaurants added 20,000 workers in the year's first five months. To balance these cost pressures, many operators are turning to technology, investing in automated systems and capabilities that reduce labor reliance—using service kiosks, automated drive-through interfaces, and cobots for routine kitchen work.

High Turnover Costs and Retention Strategies: Employee turnover costs the industry thousands per employee due to recruitment, training, and lost productivity. To retain staff, restaurants are offering benefits like retirement plans, wellness options, and even daily pay options, which are especially beneficial for workers living paycheck to paycheck. As most restaurant employees are under 35, aligning with the values of millennials and Gen Z—such as supporting community initiatives—has become a strategic approach to reducing turnover.

Union Activity on the Rise: The food service industry is also seeing increased union organizing, driven by demand for better wages and working conditions. Some employers are responding by improving communications, addressing complaints quickly, and providing clear routes to pay raises and advancement.

How Robotics Can Help Solve These Challenges

1. Labor Cost Savings: With high minimum wages, automation is an attractive option to manage costs. Robots can take on repetitive, labor-intensive tasks, such as pizza assembly, reducing the need for skilled labor and minimizing ingredient waste through precision. For example, robots like the xPizza Cube help operators manage costs by delivering efficiency and consistency, reducing reliance on human labor, and saving on labor costs.
2. Reduced Impact of Turnover: With robots handling routine tasks, restaurants can lower the impact of high employee turnover. When fewer workers are needed for repetitive roles, restaurants can focus on retaining employees in more rewarding and engaging tasks, improving job satisfaction and long-term retention.
3. Enhanced Operational Efficiency and Speed: Robots offer continuous, reliable performance, making them ideal for high-volume restaurants. By streamlining processes—whether through front-of-house order-taking kiosks or back-of-house assembly robots—restaurants can meet customer demand with fewer staff while maintaining quality and consistency, which is critical in fast-paced environments.
4. Attracting and Retaining Younger, Values-Driven Workers: As younger employees are attracted to purpose-driven, tech-savvy workplaces, robotics positions restaurants as forward-thinking environments. By using technology to improve work conditions and provide meaningful roles, restaurants align better with the values of millennials and Gen Z, who are more likely to stay with companies they feel connected to.
5. Proactively Addressing Unionization Concerns: By adopting robotics, restaurants can reduce the burden on employees, improve working conditions, and create roles that are less labor-intensive and more customer-focused. This can help preempt unionization pressures, as employees may find better conditions and more fulfilling roles in a tech-enabled work environment.

Through robotics, restaurants can create a more resilient, efficient, and attractive workplace for employees while reducing dependency on a fluctuating labor market. By investing in automation, restaurants can navigate the challenges of rising wages, high turnover, and evolving workforce values more effectively.