Published on 16 Sep 2022

Making Service great again

SOS signals have shot up from the F&B sector over severe staff shortages.

Though painful in the short term, automation and a clear career path to the top might just be what the industry must swallow to put away this manpower pickle for good.

IF THE coffee you're drinking while reading this costs more than it did last year, it's not just record inflation.

It's also because no one wanted to serve it to you.

The recent F&B service staff exodus, salary hikes and tighter foreign labour supply have coalesced into a manpower black hole that threatens to swallow up hundreds of Singapore eateries, and severely curb the expansion plans of hundreds more.

"Over the 16 years I have been in this business, the manpower shortage has never been as challenging as it is now – not even close," says Martin Bem, founding managing director of Ponte Group. "It affects our ability just to run our existing businesses properly, to say nothing of scaling up." In the over 16 years that he has been in the business, the manpower shortage has never been as challenging as it is now, says Martin Bem, founder of Ponte Group. 

Outlets are so understaffed, Bem has taken up shifts himself at concepts LeVeL33 and ERWIN'S Gastrobar to keep things running.

But while the well-worn whys behind Singaporeans' aversion to food service jobs – low pay, long hours, better options – have been thoroughly scrutinised, less talk has emerged around long-term solutions the labour-scarce republic can adopt to permanently banish its staffing headaches.

Yet, there is no better time than now. Supply and price shocks have catapulted labour to front and centre of business priorities. F&B players are now faced with a choice: either overhaul their approach to human resources, or hold fast and let market forces dictate survival of the fittest.

"This year, I expect more closings than openings," says Song Seng Wun, an economist at CIMB Private Banking. "This is the only way a healthy market equilibrium will be reached in the new normal, where we are very firm on foreign worker policy."

According to Acra, the number of F&B openings shot up amid the pandemic by almost 1,300 in 2020 and about 1,500 in 2021 – the largest increases recorded in 30 years.

"On the whole, this is not sustainable," says a Ministry of Manpower (MOM) spokesperson. "The sector will continue to face challenges as its expansion has outpaced growth in demand."

Any debate around staffing in the F&B scene is likely to summon clarion calls to revise foreign worker quotas so jobs can be filled by keen applicants from neighbouring countries.

But the government's directive is clear: Eateries must transform into manpower-lean versions of themselves, in order to cut reliance on foreign labour and future-proof their business.

"To stay ahead of the curve in the long term, we urge F&B companies to stay the course to improve productivity and operational efficiencies," says the MOM spokesperson.

At least some entrepreneurs have taken this call extremely seriously.

"We started off as a cafe, and I was constantly struggling with labour. That's how the concept of an unmanned business began," says Keith Tan, founder of Crown Digital, a Heliconia-funded startup whose coffee kiosks house a robot arm that takes orders, makes artisanal brews, and processes payments.

The company has sold over half a million cuppas since launching its kiosks in 2020: there is one in Plaza Singapura and another at Raffles XChange.

"We are bombarded every day with inquiries from around the world," adds Tan, who in December 2021 installed 2 kiosks in Japan's Tokyo and Yokohama stations. The reception has been warm, he adds – unsurprising, from the nation that birthed conveyor belt sushi, ticket-machine ramen ordering, and other such automated dining tricks.

Another Singapore startup, Hit Refresh, plans to launch robot-run outlets selling salads, poke and grain bowls in the fourth quarter this year. Co-founder Joseph Ryan says his team designed the solution specifically to avoid "crippling industry issues".

Though the pandemic saw most players adopt simple digital solutions like online ordering, reservations and payments, Ryan sees total automation as the ultimate answer to the "dramatic lack of interest in humans to work in F&B service".

"Robots do not need constant motivation, and will not fall to Covid," he quips.

But barriers stand in the way of mass adoption of robots, including scale, concerns about tech fallibility, and the price tag.

Grants that help small businesses afford new technology still require owners to fork out cash upfront, adds Wong Lin Lin, co-owner of Boxfan, a 20-seater eatery in Yishun.

"You're talking S$20,000-S$50,000 for a commercial automatic dishwasher," she says. "Even if the government covers some of it, you have to pay first. They pay you back later, but it's gonna take some time. That money could have kept the business afloat for a few months."

Automation requires resolve and an appetite for risk, says Crown Digital's Tan, citing the 3 years spent developing his coffee robot while struggling to fund it.

But despite the integration issues, failures, and investor scepticism, he persevered "because it's a no-brainer". "Once you digitise the process," he says, "the unit economics and scalability are crazy".

To be fair, Singapore is the furthest it has been down the automation road. Spurred by Covid, eateries, restaurants and hotels have begun roping in robots to ferry plates to and fro, freeing staff to hone the art of human connection.

And as bots do more grunt work, hiring may increasingly skew towards passionate service professionals – talent whose presence on the floor improves the bottom line.

This means the industry needs to identify individuals whose dispositions are suited for service, and invest in spurring them to the heights of their careers.

That could help combat entrenched beliefs that F&B careers have no long-term prospects.

"Candidates need to see employers actively creating career pathways, offering upskilling, and fielding good leaders who can provide staff with both job-related and emotional support as they navigate the stressful work," says Trevor Yu, associate professor at Nanyang Business School's Division of Leadership, Management & Organisation.

Some of these measures are only feasible for larger employers or restaurant groups, Yu adds. Thus, industry bodies such as the Restaurant Association of Singapore can step in with support – and by extension, improve the sector's image and employer branding.

At Raffles Hotel Singapore, specific job functions and management traineeships fast-track promotions and pay bumps for staff in its 10 F&B concepts. Everyone receives tailored skills upgrading plans yearly to help them reach their desired goals, adds the hotel's managing director, Christian Westbeld.

"The hospitality professional is a highly-skilled individual that takes a long time to be trained," he says. "It is a craft and a true profession."

Thanks to its structured progression, Raffles – considered an employer of choice in the industry – enjoys a "very comfortable" manpower situation, counting it among the exceptions in a cutthroat market. Salary hikes alone have seen mixed success at attracting candidates, says Callam Pickering, senior economist for Asia-Pacific at recruitment firm Indeed.

According to the firm, average monthly pay for entry-level jobs as servers in Singapore is S$2,180.

"Businesses will need to be aggressive to attract the best," Pickering adds. "Jobseekers, even the young and inexperienced, are positioned to bargain for higher wages or better conditions."

Unable to compete on pay and prestige, millennial owners of less swanky outfits are getting creative, dangling environments sympathetic to the younger generation.

"I tell staff to make themselves comfortable: pull up a chair, eat your lunch, use your phone – just put it away when customers come. Small things like these make them feel at home," says Jason Lee, 26, co-owner of gelato chain No Horse Run and dessert and cocktail bar Pilcrow.

He adds: "The last thing I want is to walk in and everyone gets uptight. I want a chill environment where we all respect one another."

Wong, the Yishun eatery owner, is allowing staff to do "whatever they want" outside the lunch and dinner peak: "They can watch a movie, read books, or take online courses." The 27-year-old is also throwing in a 5-day week, flexible hours, free meals, and team bonding activities.Wong Lin Lin, co-owner of Boxfan, a 20-seater eatery in Yishun, allows staff to do "whatever they want" outside the lunch and dinner peak. Other perks include a 5-day week, flexible hours, free meals, and team-bonding activities.

It's working. Wong and Lee, who both opened their stores during Covid, have full rosters. But beyond more nurturing environments, Westbeld can name 2 draws of a high-flying F&B service career that could entice youth: a job that's not chained to an office desk, and the chance to work around the world.

"It's made me a cosmopolitan individual with a global view," says the German, who began as an F&B management trainee and has clocked stints in China, Dubai, the Philippines and Thailand.

"It's a vibrant job," says polytechnic graduate Nurus Sa'eedah, 26, in recounting her transformation from shy KFC part-timer to sophisticated food and wine expert at establishments such as Grand Hyatt Singapore and Michelin-starred Tippling Club.

"I get to connect with people from all walks of life, and build great relationships," she adds. "Regulars remember me, and we keep in touch when I travel." "It's a vibrant job," says Nurus Sa'eedah, who's become a food and wine expert at establishments such as Grand Hyatt Singapore and Michelin-starred Tippling Club. "I get to connect with people from all walks of life, and build great relationships."

Societal change famously takes time, and for an issue as longstanding as F&B staff shortages, it's possible that the scale, cost, and resolve required for long-term fixes may simply be too much to bear for businesses.

What happens then? For one, food quality will take a hit, as the continuous lack of manpower will lead to a "downgrading" of Singapore's vibrant F&B scene, says Ponte Group's Bem.

Meanwhile, prices will keep rising to cover soaring costs. In a nation so reliant on dining out, the market is starting to see a "long overdue reset" of staff salaries to reflect the true value of F&B service to consumers, says Song, the economist.

He adds: "They are finally getting the recognition and the pay that have been lacking for so long."

Chua Ee Chien, a VC scout and owner of 3 gastrobars, says higher salaries could tip the profit scale, as there are limits to how much automation customers can accept in mid-market and fine dining restaurants – affecting which concepts investors will back.

"Manpower spend will become a key metric," he says. "It used to be a healthy 30 per cent, but now is up to 45 per cent and rising. At the end of the day, people are looking at returns, and manpower gnaws away at that."

Chua admits he didn't consider the staffing aspect when he took over popular watering hole Jekyll & Hyde in 2018. "People think F&B is going to be super fun," he says. "They just think the manpower will be there."

It's a common confession among smaller outfits. "The staff shortage didn't occur to us because at first, we covered operations ourselves," says Boxfan's Wong, who co-owns the business with her husband and 2 friends. Her advice to would-be entrepreneurs now: "Don't step into F&B, honestly."

But food, so close to Singaporeans' hearts, remains by far the easiest and most popular route to entrepreneurship, with a constant slew of new dining concepts infusing excitement and variety to the city.

So perhaps where we find ourselves is in transition. Covid pressures have forced the manpower issue to a head, and disoriented businesses are wading through uncharted waters seeking out paths to profitability.

A new F&B model could emerge: one where service staff are so pricey and scarce, fast-casual concepts have all but chosen to automate completely, while passionate, highly-trained pros offer top-notch service in upscale restaurants and bars at a significant premium.

Is it dystopian if, eventually, only rich customers can afford to be served by actual people? Maybe. But it's only realistic for Singapore.

"As we become wealthier and can't solve the labour issue, you'll have to pay a lot more if you want the human experience," says Crown Digital's Tan.

Yet the charms of a little cafe are hard to resist, even for him.

His company has submitted a tender for a unit in "an iconic building" where he plans to resurrect his former coffee shop, using it to trial new technologies and keep a pulse on the market.

"Yes, we pivoted into tech and moved into a nice big office," Tan says. "But this is sentimental to me."

Source: The Business Times