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Incentives for new hires? One restaurateur offers housing with pool 

Co-owner Jesse Matsuoka at K Pasa in Sag

Co-owner Jesse Matsuoka at K Pasa in Sag Harbor. He hasn't been able to open a new outdoor seating area built last year due to the staffing crunch. Credit: Raychel Brightman

Just simply offering competitive wages isn’t enough in many cases to attract talent in today’s tight labor market.

Given that, businesses — especially some in the labor-starved Long Island restaurant industry — are offering a host of additional incentives from educational opportunities to sign-on bonuses and even housing.

Even before the pandemic, workers in various fields were hard to come by, but now employers have to work even harder to draw talent, experts say.

"Just prior to the pandemic, we already had near-record-low unemployment rates and a tight labor market, which the pandemic amplified," says Shital Patel, labor market analyst for the Long Island region for the state Department of Labor.

She said shortages are happening across many sectors, including health care, IT and skilled trade workers.

Long Island’s unemployment rate for July was 5.2%, compared with 5% in June, but "it was a positive scenario increase," she says, noting "people feel they have better job prospects so they’re reentering the workforce." (The unemployment rate reflects those unemployed, but looking for work.)

Shrunken work force

But still the island's labor force has shrunk since COVID emerged. It was 3.7% smaller in July 2021 compared with July 2019, Patel says.

According to the Labor Department’s job bank data, as of Sept. 1, there were 22,704 job openings on Long Island vs. 14,074 on Sept. 1. 2020 and 16,006 on Sept. 1 2019.

Varying factors could be behind the labor crunch, Patel says: child/elder care issues, fear of COVID/delta, enhanced unemployment benefits and an aging workforce. Regardless the reason, many jobs remain unfilled.

"This is one of most active job markets I’ve ever seen and because of that we’ve seen companies need to do more than they ever had to attract new talent," says Dawn Fay, Manhattan-based senior district president for talent solutions firm Robert Half, which has offices in Hauppauge and Uniondale.

She’s seeing companies offering incentives such as sign-on bonuses, more paid time off, better job titles, work-from-home stipends, and learning/development opportunities. And many are still having difficulty.

Jesse Matsuoka, co-owner of Manna at Lobster Inn in Southampton, Sen in Sag Harbor and K Pasa in Sag Harbor, says he has about 50 positions he needs filled.

Right now the three restaurants are operating at 50% capacity due to staff shortages.

Unfilled shifts

At his newly renovated eatery, Manna, he’d normally be open seven days a week for lunch and dinner, but had to reduce his lunch offerings to Friday, Saturday and Sundays. And he hasn’t been able to open a new outdoor seating area built last year at K Pasa due to the staffing crunch.

To help to compete in this market, he’s purchasing homes to offer housing to staff at below-market rents as an incentive. He recently closed on a home in Sag Harbor and is in contract for another home there. Existing staff is staying there now, but he’d like to use it to entice new staff.

He says the newest Sag Harbor home has a pool and would normally fetch double the rent he plans to offer new hires.

"Not everyone is offering this so we hope it will be a hook," Matsuoka says.

Eric Lemonides, co-owner of Almond, which has locations in Bridgehampton, Manhattan and Palm Beach, is also seeing a shortage of workers. He needs a minimum of three more cooks and three more servers in each eatery.

In Bridgehampton, that's meant he's had to close on Sundays and Mondays since the spring, which the eatery’s never done in 20 years.

Bonuses

Among efforts for staff retention/attraction, he’s raised wages for all front-of-house staff to $20 an hour. The current general hourly minimum wage on Long Island is $14. It differs for tipped workers (see https://dol.ny.gov/minimum-wage-tipped-workers).

For the first time, he’s also offering $1,000 sign-on bonuses until Sept. 15. New hires would receive an initial $500 at time of hire and an additional $500 after a month.

"We did it in Palm Beach and it worked well there," says Lemonides, noting he’s also offering current staff a $250 referral bonus for anyone they suggest that’s hired.

It’s smart to space out payment of sign-on bonuses, says Ted Turnasella, principal of Comp-unications, a West Islip-based compensation consultant.

"A smart incentive never pays out right away," he says "You don’t want them to take the money and leave the next week."

The plus side with a sign-on bonus is unlike raising base pay it’s a temporary payment, he says. Still, when determining the amount of a sign-on bonus, you also have to consider if overall wages are competitive enough to attract talent, Turnasella says.

Also consider that employees look at the whole package not just salary and benefits.

"In today’s marketplace, to attract the best talent, employers must make sure they showcase all the company has to offer," Fay says.

Fast Fact:

In a Robert Half survey conducted between June 4 and July 1 of 2,800 senior managers at U.S. firms, 48% of respondents were providing sign-on bonuses; 43% were giving more paid time off; and 40% are offering better job titles to entice prospective hires.

Source: Dawn Fay/Robert Half

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