When Blake Fogelsong opened Grindstone Public House restaurant in downtown Noblesville, he knew customers wanted brunch. But Fogelsong couldn’t give it to them.

Grindstone had an enticing menu, dishes like sausage gravy poutine and spicy honey-butter French toast. The problem was finding employees to work the Saturday and Sunday shifts.

When Fogelsong finally introduced brunch in January, six months after Grindstone opened, staffing mid-morning service remained a challenge. His luck changed when nearby Scotty’s Brewhouse closed, providing Grindstone a boon of trained workers ready to start anew.

“We were able to get three or four cooks and, I think, four or five servers,” Fogelsong said. "You feel bad for the employees. And the customers who used to eat at Scotty’s or wherever (a restaurant closes), but as the labor market is so tight, you definitely want to get as many people in as you can."

That’s the dog-eat-dog world of Indianapolis’ restaurant labor crunch. Low unemployment rates and a continuously growing number of new restaurants has operators fighting for personnel and diners noticing the fallout.

“I think right now there’s almost a war in the industry,” Fogelsong said.

Can't open for lunch

In mid-April, the number of Americans filing applications for unemployment benefits fell to its lowest level since 1969. The national unemployment rate in March was 3.8 percent, and analysts expect it will dip a little bit more by 2019's end. Indiana’s rate in February dipped to 3.5 percent. It’s been equal or below the U.S. rate for the past five years.

Meantime, Indiana’s $12.8 billion restaurant industry keeps expanding, supplying 10 percent of the state’s jobs, and is expected to grow the existing 311,400 positions by 10 percent in the next decade, according to the National Restaurant Association. In a single week in January, a slow month when consumers pinch pennies and cut calories after the holidays, four major restaurants opened in Indianapolis.

As restaurants have blossomed, Harrison College and The Art Institute of Indianapolis, along with their culinary programs, both shuttered in 2018 due to declining enrollment, further diminishing the labor pool. Every loss is felt, even as Ivy Tech and Purdue's hospitality management programs continue to graduate students.

“You used to be able to call up a chef friend and say, ‘Hey, anybody apply that you can’t use?’ kind of thing. And really, anymore, those answers are, 'No,' " said chef Steve Oakley, who opened the north side's Oakley's Bistro in 2002.

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Staff shortages have dinged profits. “There are some restaurants that couldn’t open up for lunch, couldn’t open up on Monday. Not because they didn’t have business, it’s because they didn’t have employees,” Indiana Restaurant & Lodging Association president Patrick Tamm said.

“Throughout the state on the quick-service side, we have some places that have a challenge of keeping the dining room open, so they just keep the drive-thru open.”

A scarcity of applicants has meant pay bumps for job seekers but another expense for operators dealing with mainly single-digit margins. The going rate for dishwashers is $13 an hour in Indianapolis, Tamm said. That’s above the national $11-per-hour average estimated by the U.S. Bureau of Labor Statistics.

“It’s an employee market today. It’s not an employer market. And that’s not going to change for the foreseeable future.”

Service veers downhill as restaurateurs scramble to train revolving-door staff and wiggle budgets to cover higher employee costs, perhaps sourcing cheaper ingredients or reducing dining room teams.

“It does create havoc in delivering that customer experience,” Tamm said of the labor shortage.

Workers job hopping for better offers hurts, too. On average, restaurant employees last about two months, according to a data analysis by restaurant labor management platform 7shifts.

No second chances

The situation frustrates customers.

“I recently ate at a restaurant with a large party where our waitress disappeared for 30 minutes after the appetizers came out. I finally left the table to grab someone. I was told our waitress walked out. Meaning she quit and never placed our order,” said Kyle Niederpruem, an Indianapolis resident who dines out frequently.

“It was explained, and we were comped. But it was a several-hour ordeal.”

Niederpruem no longer goes to that restaurant. She’s like the 71 percent of 2,002 U.S. respondents who told customer experience software firm Medallia in a June 2018 survey that they had avoided brands in the year prior because of a bad experience.

One in three people questioned in a 2019 survey of 15,000 people by multinational professional services network PwC said they would walk away from a brand they love after just one bad experience.

“Customer experience is the tipping point, and without a strong plan to create and maintain a positive experience, businesses will lose out,” Medallia consultant Rachel Lane said when that firm released its survey results.

Now, less than a year later, the labor squeeze has forced restaurants to make the long-overdue connection between content employees and customer satisfaction, Lane said. “Churn has been a massive thing in that industry for years.”

Employees are getting the one thing they want most — salary increases — but also scholarships and career advancement opportunities, Lane said. Tamm has seen restaurants doling out discounts, free meals and parking reimbursements.

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Fogelsong and his father, Perry Fogelsong, who run eight Indy-area restaurants as part of the Clancy’s Inc. restaurant group, furnish health insurance to full-timers, but they’re also considering benefits for part-time workers. Equally important, Blake Fogelsong said, is that both men are at their restaurants daily to show employees that they care.

Oakley agreed. Good employees are available, but managers must provide good training and help workers nurture their passion.

"It’s a little bit more attention to detail with the people you currently have and seeing how can you make it better for them," he said.

Lane thinks such moves have helped elevate full-service restaurants’ consumer happiness scores, up 3.8 percent to 81 on a 100-point scale in 2018, according to the American Customer Satisfaction Index. Friendliness, food quality, food-order accuracy, speed of food delivery and cleanliness numbers all jumped.

People must feel like they matter

That doesn’t surprise Patachou Inc. restaurant group founder Martha Hoover. Hailed nationally as a leader in running quality workplaces, Hoover delivers more than typical benefits at her company’s 14 restaurants including Public Greens, Cafe Patachou and Napolese pizzeria.

As a result, “We have people who have worked for us since the early 90s,” Hoover said, “and the average server stays six to seven years.”

Patachou Inc. gears continuing education and career advancement to employees’ goals. The company also schedules financial literacy workshops and backs an employee-administered emergency fund that helps workers cover unexpected expenses. Around-the-clock legal and psychological counseling is available to staff and their families.

“One of the things that really draws people...in the first place is that from day one we have had, and have fostered, a culture of respect, which is huge especially now,” Hoover said.

“In 2019, it’s what people want in a workplace.”

With Indianapolis “at effectively full employment today,” as Tamm put it, and famous restaurant leaders including Mario Batali and John Besh toppled by workplace sexual harassment scandals in the past year, restaurant industry employees realize their clout. Even small-business operators must listen.

A strike at single-unit Tinker Street restaurant last spring locked the top Indianapolis restaurant's doors for two weeks and forced out one of its owners after workers alleged that a waitress was wrongly fired.

The restaurant had a lot invested in those employees, Tinker Street co-owner Thomas Main said.

Tinker Street gives guests one of the city’s best experiences thanks to intense server training that includes up to 40 hours of classroom time and testing on top of mock and chaperoned services. Candidates also work various jobs at the restaurant.

Successfully waiting on Tinker Street’s owners is the final step to becoming a server. Fewer than 50 percent of applicants make it, Main said.

Listening to strikers and agreeing to terms that would provide what they considered a safe workplace led to Tinker Street resuming smooth operations after the dramatic episode.

“People involved need to feel like they matter,” Main said.

Nearly every team member returned to his or her post after the walkout and has stuck around, putting Tinker Street owners in an enviable position among restaurateurs.

“I have a group right now that doesn’t want to do anything but raise the bar. They want to be better. They want more,” Main said. “It’s pretty great.”