How Can Coffee Shop Face with Labor Shortage?

How Can Coffee Shop Face with Labor Shortage?

Coffee shops are becoming increasingly crowded; yet, a labor shortage may have an impact on the quality of your shop's service. What problems does that cause? How can these issues be resolved?  Read on with Kimecopak to identify the issue and the most suitable solution for your business.

How Has a Labor Shortage Become a Major Issue for Coffee Shops?

How Is Barista Important to Coffee Shops?

Specialized baristas play a vital role in coffee businesses. They may be the ones who create the customer experience and brand reputation.

  • Customer experience: Baristas are the coffee artists, ensuring consistent quality and brewing delicious drinks to cater to diverse preferences. They remember regulars' orders, personalize drinks, and engage in friendly conversations, making each customer feel valued and welcome.
  • Brand reputation: Baristas embody the coffee shop's personality and values through their interactions, shaping the brand image and fostering loyalty. Their insights from customer interactions provide valuable feedback for the shop to improve its offerings and services.

13 Tips to Open a Successful Coffee Shops in Canada

Labor Shortage in Food and Beverage Industry

The coffee shop business in Canada is experiencing a workforce shortage comparable to that seen in other nations. According to a new study, Canada's food and beverage production industry will face a severe labor shortfall in the coming years. According to Food Processing Skills Canada, the industry will employ 325,000 people by 2030, up from about 300,000 in 2022. It states that this represents a 9% rise.

With the importance of the barista and the general lack of human resources in the food and beverage business, cafes will lose competitors in the future if they do not understand the reasons and discover ways to improve. The causes of labor shortages and methods to solve them are discussed further below.

What Are Causes of Labor Shortages?

Labor shortages are a common issue, with numerous causes stemming from the market in general and businesses in particular.

Market Causes:

  • Increased demand for coffee: Canada's coffee culture has boomed in recent years, with people increasingly opting for specialty coffee and frequenting cafes. This surge in demand outpaces the available workforce, leading to staffing gaps
  • Shifting work preferences: The traditional 9-to-5 work model is becoming less appealing, especially to younger generations. Many coffee shop jobs involve shift work, weekends, and holidays, which can deter applicants seeking work-life balance or flexible schedules.
  • Aging population: Canada's aging population means fewer young people entering the workforce, decreasing the pool of potential coffee shop employees. This trend, combined with the other factors, creates a perfect storm for labor shortages.
  • Competition from other industries: The Canadian job market is competitive, with cafes competing with other sectors for qualified workers. Industries offering higher wages, better benefits, or more predictable schedules can entice potential coffee shop employees away.

Business Causes:

  • Cost: Low Wages and Limited Benefits: Coffee shops, especially smaller chains, may struggle to offer competitive wages and benefits. The average barista salary in Canada is $31,353 per year or $16.08 per hour. While the average minimum salary in Canada is $51,056 per year or $26.18 per hour
  • Unattractive Work Environment: Coffee shops can be fast-paced and stressful, with long hours, unpredictable schedules, and physically demanding tasks. This can lead to burnout and high turnover, especially among younger workers who prioritize work-life balance.
  • Lack of Training and Development: Inadequate training programs can leave baristas feeling unprepared and unsupported, leading to frustration and job dissatisfaction.
  • Outdated Management Practices: Rigid scheduling, poor communication, and lack of employee recognition can create a demotivating work environment, pushing valuable employees away.

    What Are Consequences of Labor Shortage to Coffee Shop?

    A shortage of trained baristas can have a variety of harmful consequences, as listed below:

    Reduced Customer Satisfaction

    • Longer wait times: Unfamiliarity with equipment and brewing methods can lead to slower service, frustrating customers and potentially leading to lost business.
    • Inconsistency in quality: Inexperienced baristas may struggle to consistently deliver perfect coffee, resulting in disappointed customers and negative reviews.
    • Limited menu options: Shops may resort to simpler menus to manage workload, depriving customers of their favorite drinks and limiting potential sales.
    • Poor customer service: Frustration from slow service or inconsistent quality can translate to negative interactions with customers, damaging the shop's reputation.

    Operational Challenges

    • Increased training costs: Investing in training programs for new or inexperienced baristas adds to the operational budget.
    • Higher turnover rates: Unattractive work conditions or lack of growth opportunities can lead to frequent staff changes, disrupting workflow and impacting team dynamics.
    • Scheduling difficulties: Finding enough reliable staff to cover busy periods becomes challenging, impacting efficiency and potentially leading to reduced revenue.
    • Inventory mismanagement: Inexperienced baristas may make mistakes with ordering or preparing ingredients, leading to waste and financial losses.

    Negative Brand Image

    • Loss of reputation: Inconsistent quality, slow service, and poor customer interactions can damage the shop's reputation and online reviews, deterring potential customers.
    • Inability to differentiate: Without skilled baristas crafting unique drinks and offering expert advice, the shop may struggle to stand out from competitors.
    • Limited growth potential: Difficulty attracting and retaining talent can hinder expansion plans and limit the shop's ability to scale up successfully.

    What Can Coffee Shops Do to Solve the Problems?

    The most significant criteria for successful recruitment are salary and work environment. Indeed, according to a 2018 Glassdoor survey, 58% of job searchers prefer pay when choosing a job, while 34% prioritize company culture and 8% prioritize benefits. According to a LinkedIn survey conducted in 2023, 70% of workers would think about quitting their current position to work for an organization that values work-life balance, even if it meant taking a slight wage drop. The following are some suggestions on how coffee businesses can enhance the two primary aspects mentioned above.

    Ways to Improve Barista Salary

    Businesses can rebalance, optimize operations, and reduce superfluous expenditures in several ways to increase wages for workers, including:

    Optimize Operation

    • Scheduling Efficiency: Utilize data and analytics to schedule staff based on peak and off-peak hours, avoiding overstaffing during slow periods.
    • Technology Integration: Implement self-service kiosks, mobile ordering systems, and automated brewing machines to streamline operations and potentially reduce barista headcount.
    • Performance Incentives: Offer bonuses or other rewards for exceeding productivity goals, motivating employees and potentially offsetting the cost of higher wages

    Reducing Operational Costs

    • Negotiating Supply Contracts: Renegotiate contracts with suppliers for coffee beans, equipment, and other materials to secure the best possible deals.
    • Energy Efficiency: Implement energy-saving measures like LED lighting, smart thermostats, and energy-efficient appliances to reduce utility bills.
    • Inventory Management: Implement inventory control measures to minimize waste and spoilage of ingredients, reducing costs associated with overstocking or understocking.

    Enhancing Barista Benefits

    • Benefits Packages: Consider offering benefits like health insurance, paid time off, and retirement plans to attract and retain employees who value comprehensive compensation.
    • Flexible Scheduling: Provide flexible work schedules to accommodate the needs of your baristas, fostering a positive work-life balance and reducing turnover.
    • Non-Monetary Benefits: Offer perks like discounts on coffee, free drinks, employee appreciation events, and professional development opportunities to show your appreciation and boost morale.

    Ways to Improve work environment

    To improve work environment, business can opt the below solution

    Enhance Work-Life Balance

    • Offer flexible scheduling: Consider flexible hours, part-time options, and split shifts to accommodate different needs and preferences.
    • Promote healthy work-life balance: Encourage breaks, limit overtime, and offer paid time off to prevent burnout and promote well-being.
    • Provide access to mental health resources: Offer employee assistance programs or access to mental health resources to help baristas cope with stress and navigate challenges.
    • Recognize personal needs: Be understanding and flexible when baristas need to take time off for personal reasons or unexpected circumstances.

    Focus on Culture and Values

    • Support career advancement: Offer opportunities for baristas to learn new skills, take on leadership roles, or participate in professional development programs.
    • Encourage feedback and suggestions: Create a culture where baristas feel comfortable sharing their ideas and suggestions for improving the shop and their work experience.
    • Promote a supportive and respectful atmosphere: Foster a culture where baristas feel valued, appreciated, and heard. Encourage open communication, teamwork, and positive interactions between staff.
    • Implement clear and fair policies: Establish clear guidelines for performance expectations, conduct, and conflict resolution to ensure a sense of fairness and consistency.
    • Celebrate successes and achievements: Recognize and reward baristas for their hard work, milestones reached, and contributions to the shop's success.
    • Build a sense of community: Organize team-building activities, social events, and opportunities for baristas to connect outside of work, fostering a sense of belonging and ownership.

    While labor shortages present challenges, they also offer opportunities for coffee shops to embrace innovation. Our paper coffee cups, for example, can help you reduce waste, attract environmentally conscious customers, and free up your employees' time. Let's work together to build a more sustainable and resilient coffee industry.

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