Two years ago, every restaurant owner in Australia was talking about the labour shortage. Staff had left the industry during COVID and weren’t coming back. International students and backpackers, who had been propping up hospitality staffing for decades, were slow to return.

We were told it would improve. International borders reopened. Visa processing sped up. But has it actually gotten better? The answer is complicated.

The numbers

According to the latest data from the Restaurant and Catering Industry Association, the vacancy rate in Australian hospitality dropped from its peak of about 17 percent in mid-2023 to around 11 percent by late 2025. That’s an improvement, but it’s still well above the pre-pandemic average of 6-7 percent.

The picture varies enormously by geography. Metro Sydney and Melbourne are closer to normal. Regional areas — particularly tourist-heavy regions like the Gold Coast hinterland, Barossa Valley, and Far North Queensland — are still desperately short.

And the composition of the workforce has shifted. There are more temporary visa holders and fewer Australian-born workers than before the pandemic. That has implications for training, consistency, and the long-term health of the profession.

What restaurants are actually doing

The interesting story isn’t the shortage itself. It’s how restaurants are adapting. Some of these changes are likely permanent.

Smaller menus. Many restaurants have cut their menus by 30-40 percent. Fewer dishes means fewer specialist stations, which means you can run a kitchen with fewer people. This isn’t a bad thing. Some of the best restaurants in the world have tiny menus. The forced simplification has made a lot of Australian restaurants better.

Changed service models. Counter service, QR code ordering, and reduced table service are now standard in places that would have considered them unacceptable three years ago. Customers have largely adjusted.

Better pay (finally). The award wage increases and industry pressure have pushed pay up. Head chefs in Sydney can now command $85-100k, up from $65-80k pre-pandemic. It’s still not great for the hours, but it’s movement.

Technology. This is the big one. Restaurants are adopting kitchen display systems, automated inventory management, and AI-driven rostering tools at a rate nobody predicted. The technology doesn’t replace people, but it makes each person more productive.

Some restaurant groups are working with AI consultants in Melbourne to implement these systems properly — handling everything from demand forecasting to staff scheduling optimisation. The ROI is genuine when it’s done well.

The wage theft elephant

We can’t discuss hospitality labour without mentioning wage theft. The Fair Work Ombudsman recovered over $500 million in unpaid wages from the hospitality sector between 2020 and 2025. While enforcement has improved and high-profile cases have created some deterrence, the problem hasn’t gone away.

Workers know this. It’s one of the reasons experienced hospitality staff left the industry and haven’t returned. Why work gruelling hours in a kitchen when the employer might not be paying you correctly?

The businesses that have recovered best from the labour shortage are, by and large, the ones that pay properly, roster fairly, and treat their staff like professionals. That shouldn’t be a competitive advantage, but right now it is.

What’s different in 2025

Three things stand out compared to where we were two years ago:

First, the industry has accepted that the old model — relying on cheap, disposable labour from visa holders and young Australians passing through — isn’t coming back. The smart operators have moved on.

Second, technology adoption has accelerated dramatically. Point-of-sale systems, kitchen management software, and even robotic kitchen assistants are no longer fringe. They’re operational necessities.

Third, there’s a genuine conversation happening about making hospitality a viable career, not just a stopgap. Apprenticeship programs are growing. Some TAFEs have redesigned their hospitality courses to include business management and technology skills alongside cooking.

Where this goes

The labour shortage won’t fully resolve until hospitality is genuinely competitive with other industries for talent. That means better pay, reasonable hours, proper training pathways, and workplaces that don’t burn people out.

We’re moving in the right direction, but slowly. In the meantime, be patient with your local restaurant. They’re probably running the same quality with fewer people than before. That’s harder than it looks.