Pandemic conundrum: Sonoma County hospitality sector struggles with staffing crunch

Jacob Gamba, general manager of Risibisi, did something recently that was unheard of in his 15 years working at the upscale Italian restaurant on the Petaluma waterfront: he posted a help wanted sign on the restaurant’s window for experienced servers.

Percy Brandon, general manager of Vintners Resort in Santa Rosa, has 100 openings for a variety of lodging and food service jobs at the luxury Russian River Valley property.

Will Seppi, owner of Costeaux French Bakery in Healdsburg, is looking for up to 15 more workers to essentially double the staff there, so he can eventually go back to opening seven days a week instead of only five.

These three hospitality operators are emblematic of the vexing challenge facing many Sonoma County restaurants, hotels and cafes — securing enough workers to meet the pent-up demand of residents and visitors mainly stuck indoors during much of the coronavirus pandemic.

With almost 60% of county residents 16 or older fully vaccinated and the highly contagious virus finally fading after a painful year, companies have been steadily able to expand operations and people are starting to safely gather in public. Most of the hospitality industry is allowed to serve food and drinks indoors at 50% customer capacity and many continue with outdoor service, takeout and delivery to bolster revenue.

While the county eagerly awaits June 15 when California can fully reopen, many area restaurants and hotels remain mired in a severe staffing slump. It’s going to limit their ability to extend daily operating hours and immediately take part in the grand reopening. What’s more, cutthroat competition for new hires has forced hospitality establishments to pay higher wages to entice people, after they lost a pile of money the past 14 months.

“The biggest challenge is finding skilled employees and having enough of them to keep up with demand,” said Tareq Alrehani, a partner in Fandee’s Restaurant in Sebastopol, who has been trying to add 10 more people to his payroll.

Because of the labor shortage, Fandee’s will continue with a slimmed down menu of its homestyle American fare. And Alrehani is paying overtime to employees to work longer hours since a monthslong search has not yielded a sufficient number of additional chefs and servers.

With more hospitality businesses trying to ramp up, “it’s become a rat race among all of us to bring more people on board,” Brandon said, noting that “never in my career have I seen this.”

Given the hiring contest, many restaurant and hotel operators are “just throwing more money at people,” said the hotelier striving to double his 100-person payroll to be able to fully reopen all of the property’s amenities. Therefore, Vintners Resort boosted wages, too, and as a result raised its prices for customers.

What’s caused this late pandemic staffing conundrum, even though thousands of people across the county remain unemployed? In interviews with almost two dozen restaurateurs, hoteliers and labor market experts, they gave myriad reasons, including:

*Many workers left the hospitality industry for new careers, after suffering through months of no work, getting recalled to their jobs, then in many cases being furloughed again.

*Schools and child care centers closed for months, causing parents to stay home with young children to help them with their online schoolwork.

*No longer able to afford to live in pricey Sonoma County, some people left the area or the state entirely for cheaper locales.

*A portion of older workers opted to retire, in some situations earlier than they expected.

State financial aid

Thanks to a surprising $75 billion California budget surplus in the wake of a pandemic-induced recession, state financial aid is coming to boost tourism, travel and thereby the hospitality sector. The hope is visitors return and spend money staying at hotels and eating at restaurants.

Gov. Gavin Newsom and state lawmakers are jockeying in Sacramento to decide how to spend part of the windfall to help residents and businesses get back on sound financial footing. They need to resolve their recovery spending plans as part of negotiating a final 2021-2022 state budget by midnight June 15.

Newsom supports a proposal for the state to invest $95 million in Visit California to launch a marketing and advertising program called “Calling all Californians.” The initial goal will be to encourage travel within the state where visitors spent $145 billion in 2019. Tourism spending cratered in the pandemic, dropping by $79 billion last year when 1.2 million of the state’s hospitality workers lost their jobs.

Also, state Sen. Mike McGuire, D-Healdsburg, said legislators are discussing spending $1.5 billion in the new budget to add a third round of small business grants up to $25,000 apiece that struggling enterprises, including in the hospitality sector, could use to boost payrolls among other things.

McGuire, a key player in securing the governor’s support for the tourism stimulus, expressed confidence the $95 million would “stir significant economic activity across California.” He and other state state officials claim it would lead to tens of billions of dollars in visitor spending and additional state and local tax revenues.

Cost of living hurts

Sonoma County needs “some of that cash to kick-start the travel and hospitality sector,” said Peter Rumble, chief executive of the Santa Rosa Metro Chamber.

The local hospitality industry has been been slowly adding jobs the past few months as the community gradually reopened. But the workforce remains 30% smaller than it was the spring before the pandemic when the county’s economy was vibrant. The sector employed 25,600 people in April 2019, compared with 17,900 workers last month. On the bright side, that’s 900 more people working at restaurants and hotels than the previous month of March.

Also, there’s 6,200 more people on local hospitality payrolls than in April 2020 when the public health crisis propelled the Sonoma County unemployment rate to an 80-year high of 15.4%. In that single month after the onset of the pandemic, 48,000 county residents were laid off, including 14,400 who worked in hospitality jobs, according to state employment data.

Friday’s release of the county’s unemployment rate, which matched a pandemic low of 5.7% of the workforce, provided solid evidence a local economic recovery is underway.

With 13,700 people in Sonoma County’s civilian labor force still with no jobs, certain restaurateurs point to the exorbitant cost to live here as a key reason their staffing situation remains dire. Many hospitality workers earn minimum wage or a little more, so the area’s escalating housing costs take a big bite out of their paychecks.

“I think as a community we need to focus on building more affordable housing for these very important positions that we need,” said Bhupinder "Sonu" Singh Chandi, president of Chandi Hospitality Group, owner or operator of 14 Mountain Mike Pizza stores and Beer Baron restaurant in downtown Santa Rosa.

Chandi recently hired a new general manager for Beer Baron, only after he increased the salary by almost 20% to attract the best candidate.

“It took an extensive amount of effort. We interviewed a lot of individuals because we are committed to the long run,” he said. “The labor market is challenging.”

The average monthly rent this spring for a one-bedroom apartment in Sonoma County is $1,803, according to Meridian Commercial real estate advisory services. And the median price to buy an existing single-family home soared to a record $767,000 in March, according to data from Rick Laws, a regional vice president at Compass real estate brokerage in Santa Rosa. That put homeownership further out of reach for many residents, no matter their occupations.

Cutthroat recruiting

Natalie Cilurzo, co-owner of Russian River Brewing Co., was excited on Wednesday after she finally hired four more people to work in the kitchen. The positions pay between $17 to $22 an hour.

Before the pandemic, the brewery employed 204 people at its Windsor and Santa Rosa brewpubs. There are now about 130 workers and Cilurzo would like to hire two dozen more employees.

“We are keeping Windsor closed two days a week and are unable to host events for the foreseeable future,” she said, indicating that will not change in June when the state lifts remaining business restrictions.

The same scenario is playing out at Bear Republic Brewing Co., which produces most of its beer in Cloverdale and operates a Rohnert Park brewpub with an outdoor patio. To save on labor costs, it’s converted to a fast-casual setting in which customers place orders at the bar and a server brings the food to them.

“I think you are going to see more restaurants go that way,” said owner and CEO Richard G. Norgrove, who only has enough staff to open five days a week.

The rivalry for employees has been so intense that restaurant owners have on two occasions cold-called his Rohnert Park brewpub and asked to speak to an assistant manager, then asked if she was happy at her job or would consider working for them instead, Norgrove said.

Child care dilemma

At Costeaux’s bakery, child care obligations and disruptive school schedules, which have many students in the county splitting time between taking classes at home online and in classrooms, have hindered recruitment and worker retention, Seppi said. Since 1981, his family has owned the business that also includes three other local retail sites, plus a 60-person wholesale bread division that he wants to add up to 20 workers.

McGuire said getting schools and state-subsidized child care centers that serve 400,000 children reopened are imperative. Beginning with the start of the next school year, it must be mandatory for the state’s public schools from kindergarten through high school to resume all classes on campuses, the senator said.

“Until we get our schools reopened, our economy will not be able to fully recover,’’ McGuire said, noting many low-wage parents still have to make the tough choice of either returning to work or staying home making sure their kids are doing their online schoolwork.

Averting hiring woes

One area restaurateur bucked the woeful staffing trend, by remaking his business model. Another has been buffeted by owning the building housing the restaurant, which helped avert a worst-case scenario in the pandemic.

Dustin Valette, chef and co-owner of Valette, a rustic restaurant in Healdsburg, made a quick pivot at the beginning of the pandemic to takeout service featuring family-style meals. Two weeks ago, he transitioned back to the customary menu of fine dining and wine selections.

His dramatic operating adjustment and leveraging assets enabled Valette to keep 90% of the restaurant’s staff of about 40 employed and to continue sourcing food from local farmers and ranchers.

Still, “we took it on the chin,” losing over $500,000, said Valette, who opened the restaurant with his name on it in 2015. To him, it was well worth taking the financial hit because he retained his employees. And now he has about 30 resumes from people who want a job.

Valette, who started cooking at 13 and has been working in food service for 27 years, said the challenges over the past year were greater than anything he’s ever experienced in his career.

“Everything we knew and planned for went out the window overnight,” he said, of his team contending with the public health crisis. “It was by far the most challenging and tricky thing we’ve ever gone through.”

Don Taylor, longtime owner of Omelette Express, counts himself among the fortunate ones in food service.

His Santa Rosa location in Railroad Square enabled him to set up tables on the street and sidewalk to serve patrons. He also relied on a hungry takeout clientele, when he needed it in the throes of the pandemic.

“The last few weeks it feels like a restaurant again,’’ said Taylor, who owns and runs the breakfast spot his mother Nan Taylor started in 1977 and he took over 10 years later.

He’s back to about 20 workers and looking for another experienced server, if he can find one.

Reflecting on the year of turmoil, he credited his mom for the foresight to buy the Santa Rosa building decades ago. That meant, in the year of upheaval, he avoided the hassle of trying to negotiate lease adjustments with a landlord.

“I think I made it. It was as low as you can go in a long year,” Taylor said. “Somehow I saved the family restaurant, so I’m pretty proud of that.”

Burnout becomes an issue

Meanwhile, at Vintners Resort, employees are working long hours and multiple jobs. Still, parts of the property, such as the River Vine restaurant, the spa, events center and catering business, are either still closed or operating on a limited basis due to the labor shortage.

“The burnout rate is increasing,” said Brandon, the general manager. “Our employees are tired.”

The hotel is fully open thanks to the staff’s hustle. The acclaimed John Ash & Co. restaurant, known for its Wine Country cuisine, is operating daily except Monday.

Some small group events and weddings are planned at the resort this summer. But it’s the big events that are more lucrative and there not yet enough staffing to host them.

“At some point, something has to give or we won’t be able to fully reopen,” Brandon said, noting services will continue resuming and expanding as more people are hired. He intends to persist with the tedious search for additional workers, realizing Vintners won’t get back to a 200-person team this summer.

Harbinger of promise

At Risibisi in Petaluma, Mother’s Day offered a harbinger of promise for the summer. It was the busiest on that special day of any in previous years since the restaurant opened in 2006.

The restaurant staff now numbering 15 is hustling to serve dinner seven days a week and lunch Saturday and Sunday.

The place along the Petaluma River is fortunate to have 17 outdoor tables under a tent, and they’ll stay there through the summer. Also, there are up to 22 more tables inside that can be used — provided there’s enough servers.

General manager Gamba plans to continue trying to land four more servers to be ready for a summer rush. Nobody’s responded yet to his help wanted sign on the restaurant’s window.

“It’s something I never wanted to do,” he said, “but that’s how much we need staff.”