"Help! Help Wanted"
The Wall Street Journal
By: Caralee J. Adams

The news hits Ellen and Todd Gray when they are dinning out on a Sunday night- the one day of the week their new Washington, D.C., restaurant, Equinox, is closed. Someone in the kitchen makes a pitch to come work for them. He's heard through the grapevine there is an opening for a sous-chef, the No. 2 job. The Gray's fears come true: Todd's right-hand man is looking for work elsewhere.

The next day, Todd confronts sous-chef who admits the rumor is true. The day after that Todd asks him to leave within two weeks. He promotes another employee to the position. "I was a little rash in the decision," he admits, but says he is worried word will get out that his people are leaving.

As new entrepreneurs, the Grays, both 35, are not alone in their struggle to attract and keep employees in this tight labor market. Last year, the national unemployment rate was 4.2 percent - the lowest in 30 years, according to the U.S. Bureau of Labor Statistics. In the metropolitan D.C. area, the unadjusted seasonal unemployment rate was 2.2 percent in December.

The Grays started with 18 employees. As their enterprise grew increasingly successful, they've had to expand their staff to 35. They are on the third manager. In total, six employees have left in nine months.

In the beginning, they make two big "mistakes": hiring an inexperienced manager and bartender, both of who they let go within a month. "We realized these kids don't know what the hell they are doing," Ellen says. "It got us in the weeds in terms of our paperwork."

The Grays believe they have to be firm to get employees to perform. Yet, they devote much of their energy trying to impress applicants and keep the staff happy.

"It's not like you take somebody and rattle their chains and say, 'Shape up or ship out.' If they ship out it's not like we have a dozen people waiting," says Todd. "It's really frightening to think how fragile your personnel and staffing are in this economy."

They are wiser now in questioning applicants. But sometimes they get desperate, Ellen says. "It's almost as if they don't have three heads, you go with them," she says. Ellen expects less turnover in the kitchen - where many are on track to be career chefs - than among the wait staff. "People know they can get jobs whenever they want," she says.

The Grays attract a young crew: Average age of the staff is about 26. Trying to create a homey, friendly atmosphere, they buy a drink for everyone at the end of the night. They want a laid-back atmosphere, but find employees need more direction.

"We've gone the kind route. We've gone the route of giving them the benefit of the doubt," says Todd. "You don't want to be a Marine sergeant." But employees leaving prompt changes: more discipline, structure and training.

In January, they begin to hold daily meetings at 11:20 a.m. and 5:20 p.m. for the wait staff. Soon, they'll start a session for the kitchen staff. "People wanted to know what was in our heads and we weren't giving it to them," Todd says. The Grays expect the staff to be more knowledgeable, for example, to know what a syrah grape is, but instead they find they have to educate.

When word leaks out that the sous-chef is leaving and others are being promoted, lack of communication from the Grays deflates morale in the kitchen. Todd is in New York for three days observing the hot French restaurant, Daniel, when the kitchen crew learns of the changes. Ellen phones Todd. Todd jumps on the next flight home and calls a staff meeting to explain the situation.

Then another cook, who was passed over for promotion, resigns, leaving the restaurant two short in the kitchen. That night, Todd pounds out a new type of schedule in the kitchen, working people fewer hours, rotating them through the kitchen, giving them more dishes. He says he detects a "transformation of spirits" in just a few days.

With the new managers up to speed, Todd lets them close most nights. Getting home earlier, he can kiss his seven-month-old son, Harrison, goodnight.

The restaurant isn't the only front where the Grays have labor challenges. They quickly go through two nannies in Harrison's first three months. Then, for a month, a handful of waitresses rotate watching the baby in the restaurant. Finally, they hire one of the cooks to be Harrison's nanny about 50 hours a week. In a creative move to keep Harrison nearby, they rent office space upstairs - part office (desk, phone and computer) and part nursery (crib, swing and toys). They dub it the "officery."