Editor’s note: This is the second in a multi-part series that will look into the state of full-service restaurants for the coming year. The first part explored finances. The next part will dive into inventory and menu management.
Let’s turn to labor as we continue unpacking findings from TouchBistro’s survey of 600-plus full-service restaurant operators. The baseline, and an unsurprising one at that: 96 percent of respondents said they spent more on labor costs this year than last.
Before getting into some of the data, it’s worth noting this isn’t going to abate on the top line. Six states (Hawaii, Michigan, Missouri, Nebraska, New York, and Rhode Island) all had minimum wage hikes scheduled for January 1. Another 13 with indexing had uplifts (based on the CPI unless indicated otherwise)—Arizona, California, Colorado, Connecticut, Maine, Minnesota, Montana, New Jersey, Ohio, South Dakota, Vermont, Virginia, and Washington—roll into place. Alaska, Oregon, D.C., and Florida are earmarked for later 2026 raises.
In TouchBistro’s survey, 54 percent of operators who said they saw an increase (essentially everyone) did so of 21–50 percent, up from 47 percent who reported similar spikes in 2024.
Costs were fueled by several factors—rising minimum wages, as noted, competitive pressure for talent, and the reality, TouchBistro explained, today’s workers expect higher compensation. And for many restaurants, particularly those in fine dining and full service, labor represents their largest expense and most important one.
You can see that surface in the following: only 19 percent reduced headcount to counter costs. The majority focused instead on doing more with existing employees, from increasing productivity (35 percent) to cross-training (34 percent) to improving retention (30 percent).
Some also leveraged POS systems to predict scheduling needs (28 percent) and introduced new technology (28 percent).
Along those latter lines, training costs remained on the downward slope, offering some relief. The average cost to train a new employee dropped to $3,034 from a survey high of $3,959 in 2022.
It appears onboarding has become more efficient in recent years as complexity of operations increases.
Top strategies implemented to reduce labor costs
- Increase productivity: 35 percent
- Cross-train/repurpose staff: 34 percent
- Increase staff retention: 30 percent
- Use POS data to predict scheduling: 28 percent
- Introduce new technology: 28 percent
Getting more into the tech conversation, it’s becoming increasingly common to invest in solutions to alleviate labor pain points versus simply tackling staffing numbers. For instance, the most popular solutions tied to order-ahead platforms (36 percent), QR codes for menus and payments (36 and 34 percent, respectively), and AI-powered voice ordering (29 percent).
And what operators are selecting reveals some of their priorities. Twenty-eight percent said they were looking at self-serve kiosks. The same percentage are hoping to implement labor management solutions.
The emphasis, though, TouchBistro said, clearly falls on tools built to speed up service and reduce manual order-taking. Restaurants aren’t trying to replace human interaction entirely.
“This measured approach to technology adoption reflects an important lesson from the pandemic years: diners want efficiency, but they still value the human element of dining out,” the company said. “The sweet spot is technology that empowers staff to be more productive, not technology that replaces them.”
Top tech implemented to alleviate labor concerns
- Order-ahead/pre-schedule online ordering solutions: 36 percent
- QR code menus: 36 percent
- QR code payments: 34 percent
- AI-powered voice ordering solutions: 29 percent
- Self-serve kiosks: 28 percent
- Labor management software: 28 percent
One area that did erode was staffing stability. After two years of gains, challenges showed slight signs of worsening last year. Although 20 percent of operators said they weren’t short any positions (about the same as 2024), the average restaurant is now five members thin, up from 3.8 the year before and matching a 2022 high.
The most in-demand role shifted notably as well. Servers topped the list of unfilled positions, supplanting bartenders and dishwashers. TouchBistro hinted this could mean the return of dine-in traffic has generated demand for front-of-house labor faster than operators could hire.
And what’s leading to turnover? The average rate climbed slightly to 27 from 26 percent. Restaurants credited workers asking for higher wages, competition from other restaurants, and requests for more hours than operators have available. These issues, the company added, aren’t gaps technology can cover—they require competitive compensation, strong culture, and clear advancement opportunities.
One upspin was 12 percent of operators reported no staffing challenges. That was just 6 percent the year before. While still a minority, it does seem more restaurants are settling into recruitment and retention tactics with added tools at hand and COVID further in the rear view.
Top reasons employees leave
- Seeking a higher hourly wage: 44 percent
- Competition from other restaurants: 39 percent
- Employees are seeking more hours than operators can provide: 34 percent
- Competition from other industries: 33 percent
- Employees are burning out: 33 percent
And to close, here were some takeaways from TouchBistro. Operators, the company said, who have managed labor the best have stopped treating it as a problem to be solved and have begun looking at it as a corner of their business ready for optimization.
So, they’ve started investing in technology that increases efficiency and allows employees to focus on hospitality (such as order-ahead platforms).
They’re retaining staff by offering flexible scheduling, competitive wages, and clearer paths to growth. And operators are training smarter, not longer, by leaning into streamlined onboarding processes that get new hires productive faster.
