The restaurant is always full

How PEOs can help the restaurant and hospitality industries overcome challenges from the pandemic. 

Across the map, businesses of all sizes and industries have been hit hard by the pandemic. However, very few have suffered a more devastating blow than those in the hospitality, food & beverage service, and restaurant industry. Even as we close out 2021, the hospitality and restaurant industry are still fighting to overcome the adversity the pandemic has created. In this blog we will discuss the current economic climate the pandemic has created, the challenges owners face in the future, and the solutions available to help your business survive in the face of adversity.

On a micro level we have all noticed the pandemic’s impact on businesses in our community –That the small bed and breakfast around the corner has gone out of business, or the extra-long wait time for food at a favorite restaurant due to staffing shortages – or the for-sale signs in the windows of pubs & bakeries that once sat full in a bustling shopping plaza. When you zoom out and look at the numbers on a macro level, the numbers are startling.

According to a recent study by the American Hotel and Lodging Association, Covid-19 has set the hotel industry back 10 whole years, yes: 10 years. The report also noted that nearly four million hospitality jobs were lost in 2020 with only a small fraction added back in 2021. It’s not expected to improve anytime soon either – in fact, experts don’t predict the industry will make a full recovery until the year 2024.

The numbers for the restaurant industry aren’t much better based on data from the National Restaurant Association. Their research shows as many as 110,000+ restaurants have been shuttered since the pandemic began. Foodservice sales are falling more than $250 billion year over year, not to forget the rising cost of food that owners are experiencing. Additionally, restaurant staffing levels were reduced by 2 million jobs. If you have gone out to eat lately, it has probably been noticed that things just aren’t the same as they were prior to the pandemic. The stress is obvious on the employee’s faces that they are overworked and stressed out dealing with disgruntled patrons that just don’t understand the adversity they are facing every single day.

Based on these grim statistics, it’s safe to say that the restaurant and hospitality industries face an uphill battle for years to come. Owners in this space – who were already stretched thin by working in such a demanding field and environment – have more on their plates than ever before with more pressure on generating revenue. However, some of them are using this time to reconsider their processes and find more efficient ways to run their businesses, drive revenue and take better care of their employees while improving the overall employee experience.

“There’s no question that being in the restaurant and hospitality industry is really challenging right now,” said Patrick Moraites, partner, and VP of Tampa-based AXIS Group. “But it’s also an opportunity for owners who want to think outside the box, and that’s when hiring a PEO can help.”

Restaurants & Hospitality owners are turning to innovative employee management solutions to improve their employment related processes and upgrading to a more robust technology stack through PEOs, also known as Professional Employer Organizations. PEO’s are single-source providers of integrated business services that allow business owners to cost-effectively outsource many of their human resources, administrative and employee management-related tasks.

“The functions of the PEO really align well with the needs of the restaurant and hospitality industries,” Moraites said. “They’re doing everything they can to survive and by allowing the PEO to do the heavy lifting on the back end, business owners can focus on the tasks that will help them stay afloat.”

Here are just a few of the services a PEO can provide to business owners in the hospitality and restaurant space:

  • Payroll: Putting paychecks in the hands of employees has always been important and it’s even more so these days. Unfortunately, processing payroll is very time-consuming and can eat into hours that could be spent on revenue-producing activities. Working with a PEO can eliminate that burden by taking care of tasks relating to tax compliance, new hire onboarding and departure, time reporting, labor laws, state and federal regulations and payroll-related tax filings and withholdings.
  • Workers’ compensation insurance: Workers’ compensation coverage is required when you’re running a business but it’s not cheap, especially if your company is small. By leveraging economies of scale, PEOs can obtain workers’ compensation insurance at more competitive rates and when businesses hire a PEO, those savings will be passed along to them and can be structured in a “pay as you go” policy that can even out cash flow. Plus, the PEO will be responsible for the administrative tasks related to workers’ compensation and risk management such as developing and executing safety plans and writing up incident reports.
  • Human resources: Human resources is complicated and if you’re running a small operation, you probably don’t have the funds to hire a professional which can leave you vulnerable to legal liability. Under the guidance of certified HR professionals, PEOs can provide a variety of critical services ranging from creating an employee handbook to onboarding and training new team members to handle harassment and discrimination claims, both of which are not uncommon in the hospitality industry. By knowing they have a solid HR team behind them, employees will likely feel more supported and valued, potentially reducing the high turnover rate often associated with hotel and restaurant work.
  • Benefits: Before the pandemic, many owners in the hospitality and restaurant space didn’t offer benefits to their employees. Now that employers are faced with the challenge of hiring new workers – and retaining their existing ones – more of them are using benefits such as health insurance and 401(k)s as a carrot. Again, thanks to their ability to leverage the economies of scale, PEOs can help small businesses gain access to top-notch benefits packages at prices that won’t break the bank.
  • Technology – PEO’s utilize some of the latest and greatest technology in terms of employee management that benefit the employer and employee. Timekeeping, pay stubs, benefits, PTO requests, performance management, and other HR/employee-related information can be accessed on the go – online or mobile depending on the vendor. The days of having to manually track these tasks are over. HRIS technology can be a huge advantage in terms of keeping things productive and efficient.

For these reasons and more, hiring a PEO is a practical solution for many business owners in the restaurant and hospitality industries. However, Moraites said, “It’s not a perfect fit for everyone. Our team is committed to helping each person to determine what makes the most sense for the future of their companies. Even if that means staying with their current situation.”


Whenever you deal with Axis Group, have peace of mind knowing they want to help your business succeed. “We never pressure anyone into hiring a PEO, especially if it’s not in their best interests because that’s not the way we do business here, it’s always the right time to do the right thing,” he said. “But if you do decide to go the PEO route, we’ll work with you to find one that will help get you where you want to be.”


Ready to talk about whether a PEO is right for you? Contact us now to set up a consultation.


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Interested in learning more about PEOs and how they can help support your small business? Contact the experts at AXIS Group via phone or email by clicking here.