Sunday 22 February 2015

F&B sector has growing hunger for workers

Bosses cite manpower as biggest challenge, with many S'poreans shunning industry
By Jessica Lim, Consumer Correspondent, The Straits Times, 19 Feb 2015

SINGAPORE may be a food oasis, but ask any eatery owner here and they will tell you that the food and beverage (F&B) industry is starved of workers.

Ask Ms Victoria Li who owns Chinese restaurant Old Hong Kong Kitchen, Mr Adrien Desbaillets of self-service chain Salad Stop!, or even Mr Mohamed Ali who sells prata at a MacPherson hawker stall, and the answer is the same: Rental and food costs may be high, but what is most pressing is the lack of manpower.

"Without manpower, you cannot run your business and this hits profit margins which affect everything else," said Mr Andrew Tjioe, president of the Restaurant Association of Singapore.

Despite a 5.6 per cent growth in wages in 2013 for the rank-and-file workers in the accommodation and food services sector, statistics show that Singaporeans are still, by and large, shunning jobs in the sector.

Job vacancies in the accommodation and food services sector rose from 5,010 as at Sept 30, 2011, to 7,740 as at Sept 30 last year. Of these, 1,800 waiters, 850 food service counter assistants and 840 cooks were needed. Most of these vacancies had been open for at least six months, with employers saying these jobs were hard to fill with locals.

This is a problem because since July 2012, the service industry's Dependency Ratio Ceiling, a quota setting the maximum number of foreign workers a firm can hire for every full-time local worker it employs, has been reduced to 40 per cent - down from 50 per cent. This is low compared with other industries, like manufacturing, for instance, which has a 60 per cent quota.

Employers told The Straits Times that with so many challenges - high rents, stiff competition, thin margins and, now, the labour crunch - it is hard to even think about productivity.

"Our profit margins are so thin already, and now, we even have to turn customers away as we don't have enough people to serve them," said Mr Wei Chan, who owns eateries Next Door Deli and Baguette. "I want to increase productivity, but I can't even spare anyone for training."

He admits his firm does not give staff benefits apart from meals because it is small and he has a tight budget. His servers are paid $1,200 to $1,500 per month.

The crunch has meant the demand on the existing pool of local workers is higher, creating what industry players call an "employee's market", he said.

Such a market is particularly tough for Mr Wee Liang Lian of chicken rice chain Wee Nam Kee.

"The work is not glamourous. Few want to put on an apron and serve chicken," he said. He now has three people running the floor, down from eight previously. "Singaporeans who decide to give it a go leave after a few months."

One 26-year-old quit in record time: half an hour. "It was a Saturday, and there were lots of customers. She got the fright of her life," said Mr Wee.

Faced with such odds, less nimble eateries have folded.

Accounting and Corporate Regulatory Authority data shows 511 restaurants closed last year, up from 469 in 2013. Big names that shut include zi char restaurant Zhen Zhou Dao and 16-year-old French restaurant Au Jardin. Both cited labour woes as the main reason.

"A paradigm shift is needed," said Mr Steven Hansen, director of F&B consultancy Steven Hansen & Associates. "Youth will be proud to work in the hospitality industry only when the stigma of it being an occupation of last resort has been erased."

He said higher wages and higher productivity could be effective in tweaking the industry's image in the long term.

But eateries The Straits Times spoke to said they are barely getting by each day. Sending staff for training, or restructuring, seems impossible despite government incentives being available.

The French Stall in Serangoon Road runs on a lean team of four full-timers - two kitchen staff and two servers. The 15-year-old business pays full-time servers $1,500 to $2,000 a month, up from $1,000 to $1,300 a decade ago. Chefs earn $1,700 to $3,500 per month, depending on experience.

Owner Joanna Le Henaff is still trying to replace two full-time chefs she lost in August. The hardest staff to recruit and keep, she said, are experienced Singaporeans - those who have three or more years under their belt.

She has stopped serving mashed potatoes as they take too long to sort, peel and cook. She recently raised the pay for part-timers and plans to move to a smaller place when the lease is up.

Suppliers asked her recently if she wanted to buy a tiramisu pre-mix - no sponge fingers needed. "I said, 'No, thank you.' Hopefully, I won't have to go back on my word."

Image of dead-end job still common
By Aw Cheng Wei, The Straits Times, 19 Feb 2015

WAITERS can rise to become assistant restaurant managers in less than a year but it is still a job that few Singaporeans are willing to take on.

According to the latest job vacancies report by the Manpower Ministry, waitering was among the five occupations with the most vacancies - at 2,200 - last year. The proportion of wait staff vacancies unfilled for at least six months was 65.2 per cent.

There is the general perception that waiting on tables is a dead-end job because, "even when you are promoted, you are still serving customers", said Mr Frankie Lim, who has been working at a restaurant serving Western food in Tanjong Katong for the past two years.

His job involves serving, taking orders, setting and clearing the tables, and sweeping the floor.

Waiters who have been in the industry for about two years told The Straits Times that the hardest part of the job is that there is very little to look forward to.

Mr K.C. Tan, a waiter at a Chinese restaurant at Turf Club, said: "You have to be humble and put up with all kinds of requests with a smile, whether you are dealing with customers or colleagues. Not everybody can do the job even though it is considered low- skilled."

While the Restaurant Association of Singapore has seen graduates move quickly up the ranks due to outstanding work performance, the sentiment among wait staff, in general, is not that positive. The view is that structured career progression usually happens in big companies. Small outfits may not be able to offer that.

"It's like choosing to work at a (multinational company) or a small-medium enterprise," said Mr Lim.

"There are only so many places you can get to when it's a small outfit, and you probably have to do everything because it is so short of manpower," said the 31-year-old former administrative assistant.

"It's a lot of work but I don't mind because I am thinking of opening my own place," the degree-holder said.

While wait staff complain about the lack of career prospects, sometimes they themselves are to blame. As waitress Choi Hui Min, 29, put it, they do not stay long enough to "give the job a proper shot".

She has worked for two years at a cafe in Holland Village.

She said: "I've seen people quit after two days, complaining that their feet ache after one shift. How do we promote these people? Your feet will ache because you are not used to it. Give it a month or so and anyone will get used to it."

Turning to tech, self-service
By Jessica Lim and Rachael Boon, The Straits Times, 19 Feb 2015

EATERIES are trimming menus, buying robots that stir-fry, going self-service, and even turning away customers to deal with the manpower crunch.

After Chinese New Year, 24 cashiers will be freed up at casual eatery Han's to become "multi-taskers", who perform jobs like making coffee or preparing food.

Seventy self-order kiosks - up to three per outlet - will let customers key in orders, which are automatically conveyed to the kitchen, and pay on the spot. By the year end, stock orders will be made automatically by computer.

"Our outlet managers said that they have no time to place orders. We had to think out of the box," said Han's deputy general manager Gan Yee Chin, 42. The firm also has new policies: Staff get $50 to $300 - depending on position - for each month of full attendance with no medical leave.

Yee Cheong Yuen Noodle Restaurant, which opened in the 1970s, will become a self-service eatery after Chinese New Year. Its 60-dish menu will be cut down to 40 and a stir-frying machine will arrive next month.

Buzzers, to alert customers when food is ready, are being tested out at Ya Kun Kaya Toast's Tangs Market outlet. They will be used at other outlets if successful. Its executive chairman, Mr Adrin Loi, hopes this will help ease its 15 per cent manpower shortage.

Mr Andrew Tjioe, executive chairman of TungLok Group, which is 20 per cent short of staff, has also cut the menus of each of his 30 outlets - across brands like Lao Beijing and Shin Yeh Bistro - down by 40 per cent so fewer chefs are needed. Machines help them cook up to 12 dishes. One worker operates three machines at one go to churn out dishes that would otherwise need six chefs to whip up.

Ms Lim Rui Shan, executive director of the Restaurant Association of Singapore (RAS), said there has been a trend of businesses investing in technology in the last three years. But implementation and adoption of more technology will take time. Mr Tjioe, who is also RAS' president, said automation is still a costly option.

Mr Takahiko Tsutsui, director of RE&S Enterprises which runs Kuriya Dining, noted the limitations of automation, "especially in a fine dining restaurant like Kuriya Dining, where personalised, quality service levels are a quintessential component".

Others like Lee's Taiwanese are increasing wages. Entry-level servers are now paid $1,600 a month, up from $1,200, said the eatery's owner, Ms Fiona Lee.

Fika Swedish Cafe and Bistro's next outlet will be a self-service one, said owner Tasneem Noor. Diners are turned away once a month at her three outlets as there are not enough servers.

There is no one-size-fits-all solution, said Singapore Polytechnic marketing retail lecturer Amos Tan, who urged businesses to relook the entire business format - down to cost structure, staff welfare, target audience, and whether the space they have is too big.

"The ability to evolve is key. Restaurants can take only reservations so they can manage costs better. Why not be creative and excite your customer? Have chef tables, bring samples out for customers to try," said Mr Tan. "If you just... rely on the quality of your food, you will not survive."

Fresh ingredients needed to fix eatery troubles
Eateries need to look at other ways besides foreign worker flows to create value amid entrenched practices, low profit margins, lack of manpower and low productivity
By Jessica Lim, Consumer Correspondent, The Straits Times, 19 Feb 2015

STEP into the kitchen of most Cantonese restaurants here, and there's a sight past its use-by date. Preparing your meal are a head chef, a second chef, a head chopper, a second chopper, a steamer, a second steamer, one to stir fry, one to deep fry and a general kitchen hand. There is also the person whose role is to pick out a dish's ingredients and place the right amounts on a plate for the chef.

Such a set-up, where each person does a specific task and little else, is a luxury in today's tight labour market: When a worker does not show up, another lacks the skills to take over. There is also redundancy - when no one orders a fried dish, the one who does the deep frying twiddles his thumbs.

Yet, of Singapore's 2,500 restaurants - of all cuisines - many are only just starting to rework their processes.

Restructuring will be difficult for many, after years of liberal foreign worker policies. Kitchens are not physically structured to make it easy for the same worker to move from one task to another, long-time employees resist learning new skills, owners are stuck in old mindsets. As for the chefs who rule these kitchens, many oppose labour-saving innovations such as central kitchens or automatic stir fryers.

Change is also painful because most eateries do not have deep pockets. The restaurant scene is dominated by small players with thin profit margins, ranging from 3 per cent for a fast-food joint to 12 per cent for a casual restaurant, experts told The Straits Times.

In 2013, 73.8 per cent of food and beverage (F&B) establishments here were firms with operating receipts of less than $1 million. These firms accounted for only 21.8 per cent ($647 million) of the industry's total value.

Bigger firms were much fewer in number but contributed a significant 78.2 per cent.

Wanted: 1,800 waiters

A BIG headache for all is manpower. Job vacancies in the accommodation and food services sector rose from 5,010 as at Sept 30, 2011, to 7,740 as at Sept 30 last year. Of these, 1,800 waiters, 850 food-service counter assistants and 840 cooks were needed. Most vacancies had been open for at least six months, with employers saying locals did not want these jobs.

Yet, since July 2012, the service industry's Dependency Ratio Ceiling, a quota setting the maximum number of foreign workers a firm can hire for every full-time local worker it employs, has been reduced from 50 per cent to 40 per cent. This is low compared with other industries, like manufacturing, which has a 60 per cent quota.

The good news is that there is room for growth. Productivity, measured by value-added per worker, is low in the domestically oriented industry. Productivity growth in the sector fell 0.6 per cent a year from 2010 to 2013. In that same time, globally competitive sectors like finance and insurance showed annual productivity growth of 8.1 per cent and 2.2 per cent respectively.

Entrenched practices, low profit margins, a lack of manpower and low productivity have driven stakeholders to call for the Government to relax the foreign worker inflow. But it is not yet time to do so. Here's why.

The productivity drive is only just gaining momentum among early adopters. These include Han's, where self-order kiosks have replaced 24 cashiers, freeing them up to run kitchen errands. By the end of the year, 40 drones will serve customers at Timbre Group's six restaurants and bars.

Yee Cheong Yuen Noodle Restaurant in Holland Village started buying pre-marinated meats and pre-chopped vegetables from suppliers last year, and has just bought a stir-frying machine. At The French Stall in Serangoon Road, customers scribble orders on slips of paper; customers at Rokeby in Jalan Riang help themselves to water.

The most daring, like Mr Andrew Tjioe, the executive chairman of TungLok Group, returned to the drawing board when a restaurant concept was failing. Barely a year into business, he converted his floundering multi-cuisine Modern Asian Diner in Turf City, which needed 18 kitchen staff, into Dancing Crab - a no-frills joint serving seafood cooked in a bag and eaten off the table with bare hands. It has seven staff members.

Another sign that change is afoot: Over 680 F&B establishments have applied for productivity grants from Spring Singapore as at September last year. Most applications for the grant, open only to small and medium-sized enterprises, were received in 2013 and last year.

Adding value

THOSE calling for measures to be loosened lament that the worker crunch will lead to the shutdown of eclectic cafes and eateries.

It is true that many have folded: Almost half of the 369 cafes, coffee houses and snack bars that registered in 2011 have closed, as did 511 restaurants last year.

But chances are that it was not just the manpower crisis which did them in. Look around and you see eateries serving the ubiquitous rainbow or red velvet cake, heavily-frosted cupcakes, or truffle fries. Their strategy is plain vanilla, and customers soon stop going back because they can get the same thing everywhere.

Such outlets, said Singapore Polytechnic marketing retail lecturer Amos Tan, do not have what he calls a USP (unique selling point) - a product that makes them stand out. Items are bought from suppliers who supply to everyone else.

"Such owners open up without understanding the competitive landscape and have no institutional knowledge," he said, adding that low barriers to entry means that such eateries are easily set up. "When the wind changes, they die."

Institutional knowledge and the ability to innovate are crucial because there is no single solution to the ongoing crunch.

Increasing productivity is more than just cutting staff, buying a stir-frying machine and a couple of drones. Making such changes may help, but what is more crucial is pushing the envelope to raise revenue, differentiating from the masses, finding a niche.

Salad Stop hired a branding expert to help it stand out from its competitors - over 20 of them. Apart from a physical revamp of its 12 outlets by June, boards have been installed above the salad bar with illustrations and information on nutrition. Its website now shows the number of calories in each menu item. The chain's central kitchen will open in May and it is exploring delivery to offices for bulk orders.

"A lot of customers were disconnected to the brand, they didn't understand what we stood for," said co-owner Adrien Desbaillets, who said that the chain is all about getting people to eat healthily and rethink their food choices. "So much more could be done in terms of customer engagement." Revenue has shot up 20 per cent since the rebranding.

Such innovation can be seen elsewhere.

Mr Christopher Tan, 33, owner of Nara Thai Cuisine, ventured into catering and deliveries last year. He is now exploring marketing his venues as locations for office lunch meetings and other events. "It opens up a whole new market. We work out of our existing kitchens, optimise their use," said Mr Tan.

Staff at his two restaurants are also punching in by scanning their thumbs on a machine installed last year. Payslips are generated automatically, saving his human resource team two days a year.

By the second half of this year, customers at Munch salad bar can use an app to place orders days in advance. Food can then be picked up or delivered on the day itself. Owner Edwin Ng, 36, said: "This will expand our customer base. The office crowd can easily pre-order for meetings, the app also remembers the customer's address, their favourite orders."

Mr Ng changed Munch's concept from a sandwich bar to a salad bar a few years ago. The restructuring seems to have worked - eight new Munch outlets opened last year.

There are also innovative ways to retain workers. At high-end Japanese restaurant Tatsuya, profits are shared with employees in the form of mid-month bonuses, staff go for expenses-paid high tea, and those who do well go on trips to Japan to familiarise themselves with the supply chain.

There is no one-size-fits-all solution, but superficial changes - like turning customers away at the door because you have no workers to serve them, or pushing your staff to breaking point - just aren't going to make the cut.

Not in today's world.

The change has to start with the fundamental ingredients.

So, Cantonese restaurants, it's time to step up to the plate.

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