HR for Restaurants: Guide for Small Businesses

If you’re the owner or operator of a growing restaurant, you’re probably no stranger to working with tight budgets and narrow profit margins. 

And, amidst fluctuating food costs and customer demand, you might have to prioritize your food, beverage, and staffing needs and put upgrading your restaurant HR at the bottom of your list, even if you don’t want to. 

So where does HR for restaurants fit into it all, and should it be a higher priority?

Restaurants need HR to help them manage everything from restaurant staffing, scheduling, compensation, payroll, and compliance. So, with our busy restaurateurs in mind, we’re going to explain what you need to know before you get started with restaurant HR.

What is human resources?

What is human resources?

The Human resources department is responsible for — or set of tasks around — recruiting, hiring, onboarding, training, administering benefits, retaining talent, keeping up to date with compliance issues and other employee relations.

Human resources professionals can also advise business owners on employee-related matters like hiring and firing decisions and disciplinary concerns, and they can educate employers and employees about company policies and local, state, and federal business and employment laws.

What makes restaurant HR different from other industries?

Because of how restaurants ‌operate, and because of how they’re legally required to operate, restaurant HR has unique challenges that HR in the hospitality industry or retail industry may not.

  • Staffing challenges: In its 2022 State of the Industry report, the National Restaurant Association found that 78% of restaurants don’t have enough labor to meet their demand, and it’s no secret that turnover is a constant source of frustration for restaurant owners. 
  • Unpredictable scheduling: Because they’re not like regular, predictable 9-5 businesses, restaurant HR means having to adapt to constantly changing employee part-time and full-time availability and schedules.
  • Interpersonal concerns: Busy restaurants also tend to be fast-paced, high-pressure environments where managers have to solve interpersonal issues between employees and make sure they stay ahead of things like harassment, sexual harassment, bullying, and discrimination.
  • Food safety and worker safety: Restaurant owners have a responsibility to train their workers on food safety and handling so customers don’t fall victim to food-borne illnesses. But restaurant work can also pose health and safety hazards for kitchen staff and servers.

Do restaurants need HR?

Yes, restaurant owners need HR services so they can maintain safe work environments for their employees, create safe and satisfying experiences for their customers, and continue to expand the way they want to.

Benefits of HR in the restaurant industry

While it may not be typical for restaurants to outsource to an HR department, restaurants still have needs that benefit from HR support. HR services can

  • Help restaurants stay updated and compliant with the minimum wage laws, tipping laws, overtime laws, workplace safety laws, the FLSA (Fair Labor Standards Act), the FMLA (Family and Medical Leave Act).
  • Educate restaurant owners about regulatory agencies like OSHA (Occupational Safety and Health Administration) and their own state food and safety agencies. 
  • Train restaurant operators to handle their own HR issues like hiring, onboarding, firing, record keeping, and payroll.

4 Steps to get started with HR in your restaurant

Whether you’re new to restaurant operations or new to HR processes in your restaurant, we recommend taking these steps before implementing your restaurant’s HR services.

Step 1. Determine how you want to manage your payroll system. You’ll want to include a system for calculating and syncing worker hours to your timesheets, calculating overtime, giving PTO, and withholding taxes. 

Step 2. Figure out how you’ll organize employee information. Where will you store your employee tax forms, emergency contacts, certifications, and specific payroll details? Will it be a digital or paper-based system?

Step 3. Create a system for onboarding and training new hires on your policies, food safety and food handling, worker safety, and anti-discrimination. Creating an employee handbook with everything in one place can help you streamline that process.

Step 4. Create a system for ongoing training and feedback for your restaurant staff. Continuous training and feedback helps create a positive work environment and builds trust amongst your team members. 

After you’ve gotten a better understanding of your restaurant’s HR needs, we suggest using HR management software with the dedicated features you need to take the manual work of HR off your plate. 

For example, if you have an efficient system for running payroll, you may find you only need a tool that automatically updates your timesheets when employees clock in and out. There are tools for that! (And it’s one reason Homebase customers love our time clock tool.)

What features to look for in an HR service

There’s an array of software offering HR services out there, and you may find that some of them make more sense for your restaurant operations than others. Here are some of the major features to look out for:

  • Recruitment features should let you easily create and distribute job postings, track, communicate with, and hire applicants.
  • Onboarding features should help you streamline your onboarding process by letting you distribute tax forms, direct deposit forms, employee handbooks, and employee welcome packets, and you should be able to store them in the same place.
  • Time tracking features help you stay ahead of overtime and labor costs by letting you track employee hours as they’re updated, and they should let you sync your employee hours with time cards for payroll.
  • Payroll management features let you convert timecards into wages and hours for payday and automate your tax withholding and filing procedures.

Best HR software for restaurants

HR software can run the gamut from platforms with all-in-one services to those with one or two features designed specifically for restaurants. Here’s our short list of the best HR software for restaurants.

All-in-one software for small businesses with hourly workers 

Homebase was created for small businesses with hourly workers, and our platform lets you hire, onboard, schedule, time track, communicate with your team, run payroll for your restaurant, and sync everything together in one place. You can even get access to a certified HR advisor to answer your questions and give you HR guidance.

Best HR software for restaurants

Recruitment software

Fountain is a recruitment software that specializes in high-volume hiring for the food and beverage, logistics, retail, manufacturing, hospitality, and medical industries, and they provide specific hiring tools that let food and delivery companies source their candidates.

Onboarding software

If onboarding is your priority, we recommend Workstream for restaurant owners looking for a text-based, digital solution to hire and onboard new employees.

Time-tracking software

7shifts is a restaurant scheduling software that works with independent restaurants, national chains, and fast-food franchises to help them manage their team’s schedules, timesheets, tasks, tips, and communication.

Payroll management

If payroll is your only need, Gusto and Paychex offer payroll management services that are great for small businesses that are ready to invest in payroll software.

Best practices for managing HR at a restaurant

In the food service industry — where staffing fluctuates and work conditions are highly regulated for safety — successful restaurant managers should prioritize these best practices for HR.

Be honest with restaurant employees

Honesty is key to creating effective HR policies, and a lack of it can make or break a restaurant culture. But what does honesty between management and employees actually look like?

Putting transparency first in the hiring, onboarding, and training of restaurant employees means being upfront about how your wages and payroll system work, especially if you know you want to upgrade your payroll system.

It also means being truthful about the reality that workplace conflicts and harassment can happen in a restaurant and that you have a procedure in place to address them.

Continue training beyond onboarding

If you think of training as something that ends after onboarding, you might be doing it wrong. 

The restaurant business experiences constant changes, from updates to wage laws, safety laws, and food regulations to increasing customer demand. You can tackle those issues by building in scheduled, ongoing monthly training and by letting employees know that you may have to include occasional impromptu training to address unexpected situations.

Understand local restaurant laws

US-based restaurants are generally subject to the same federal laws around compensation, worker safety, and anti-discrimination. But it’s important to learn and stay updated on laws around things like minimum wage, overtime, and alcohol, which can vary at state and even county level.

For example, the FLSA requires non-tipped employees to be paid a minimum wage of $7.25, and tipped employees have to be paid a minimum of $2.13 across the country. But Alaska requires employers to pay workers the minimum state wage of $10.34, and in California minimum wage for workers can be $14.00 or $15.00 depending on the number of employees.

Offer good benefits to employees

If recruitment and retention matter to your restaurant, you should make excellent benefits a part of your offering to new employees. A competitive health insurance plan is a great place to start, but here are some other ways to get creative with employee benefits:

  • Paid time off
  • Health reimbursement arrangements
  • Tuition reimbursement
  • Childcare reimbursement
  • Holidays off
  • Free meals at work
  • A channel for performance recognition

Upgrade your restaurant HR with Homebase

You don’t have to outsource your needs to a human resource manager to get a better handle on your restaurant’s HR.

Homebase HR Pro gives you access to a full HR resources library that includes templates, guides, and training to get your HR needs in order. You can also talk to an actual human HR-certified advisor who can review your policies and answer your questions so you don’t have to stay in the dark about what restaurant HR concerns you should address first.

HR for restaurants FAQs

homebase customer photo homebase customer photo

Why is HR important in a restaurant?

HR is important in a restaurant because a restaurant has the same people management challenges other businesses do, as well as a few unique ones. HR duties include hiring staff, running payroll, maintaining employee records and licenses, and staying legally compliant, and these are all things that restaurants are required to do. Restaurant owners also need HR support to stay on top of food safety and worker safety regulations.

Do restaurants need HR?

Yes, restaurants need HR. Even if a restaurant owner doesn’t hire an HR manager, a restaurant owner or manager will have to take on HR responsibilities like hiring, onboarding, tracking timesheets, running payroll, and storing and maintaining employee information. Restaurant operators and staff also have to adhere to compliance laws and requirements regulating hours, wages, food safety, worker safety, and anti-discrimination.

Can Homebase help with restaurant HR?

Yes, Homebase can help with restaurant HR, and Homebase even gives you access to expert HR guidance, templates, and tools so that every small business owner can be their own head of HR. 

Homebase automates the entire HR process from end to end so whether you’re hiring and onboarding new workers, managing team information and paperwork, or setting up time-off and overtime policies, you can keep everything organized in one place. We even give Homebase users access to HR experts who can guide you through your compliance issues.

Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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