Labor — by a long shot — continues to be the most pressing issue facing today’s retail bakery owners, according to our new 2017 Retail Bakery Operations Study.
When asked what is their top business-related challenge, 61 percent of bakery owners indicated that labor costs were either challenging or very challenging. And the No. 2 concern is finding skilled labor, cited by 58 percent as either challenging or very challenging.
“Baking continues to be perceived as a low pay, low status, limited career option by many potential employees,” says one full-line retail bakery owner in the Midwest. “Even when you have young enthusiastic employees, family members discourage them from pursuing a baking career. I speak as the owner of an attractive, popular bakery that offers competitive wages and benefits (medical, dental, 401k), flexible hours, and no night shift work,”
Another bakery owner expressed similar concerns. With local minimum wage increases in his area of the country increasing to $13 per hour by 2021, the bakery owner noted that paying unskilled store help and raising wages of skilled labor will require his bakery to raise prices by at least 15 percent over the next four years.
“Each time we raise prices we lose customers, particularly those who are older and on a fixed-income who grew up making frequent trips to their local bakery,” the bakery owner says. “As we lose customers, we will adjust by producing less variety in few numbers. As production numbers decline, we will likely reduce staff. When a high school kid gets $13 per hour, a decorator loses their job.”
Results from increasing labor costs, he adds, may include the following:
- Closing earlier each day
- Closing one extra day per week
- Using online ordering and/or ordering kiosks in the store
- More pre-packaged items
- Using more mixes to replace some scratch production
- Buying frozen or commercially made product like breads or puff pastry
Noted bread baker Evan Andres says it’s too important not to cut corners in production, or risk losing your customer base. Still, the bakery owner says that keeping pace with daily production needs remains the biggest challenge of the job.
“Training bakers is my challenge. It seems like we are always building a team of bakers back together. It’s hard to find skilled bakers and, when you bring someone new in, the experience starts paying off the second year. Then you have to hope they stay,” says Andres, owner of Columbia City Bakery in Seattle.
The recent Workforce Gap report, commissioned by The American Bakers Association and the American Society of Baking, provides details on how wide the gap is for the baking industry, and more importantly, sets forth a framework for solutions and programs to help fill the gap. The report dives into specifics regarding trends among the baking industry, including detailed information on the current and expected gap, along with specific information on challenges and solutions related to recruitment, training and retention. Of note, 84 percent of bakers indicated that machine operators are deficient in needed skills when hired or promoted.
At the same time, bakers indicated that the No. 1 challenge they face in recruiting individuals to enter the industry is a lack of brand identity. “Not only do new hires lack the required knowledge to help fill critical needs within the bakery, qualified individuals are not aware of the benefits of a career in baking, creating extremely barren recruiting grounds for the industry,” says ABA president and CEO Robb MacKie.