Skip navigation
Stock chefs

Survey: Restaurants should expect hiring, retention pressures

People Report Workforce Index cites continued challenges, but increased optimism for holiday season

The People Report Workforce Index, which measures expected market pressures on restaurant employment, rose again for the fourth quarter, indicating operators would continue to face recruitment and retention challenges through the end of the year.

The Workforce Index is produced quarterly by the Dallas-based People Report and is based on surveys of restaurant human resources departments and recruiters. It measures from a baseline value of 50, with any results over that level indicating increased pressures on five components: employment levels, recruiting difficulty, vacancies, employment expectations and turnover. Results are based on expectations for the quarter underway.

The fourth-quarter overall Workforce Index stood at 67, two points higher than in the previous quarter. The index slipped in the third quarter after reaching 69 in the second quarter, the highest reading since the first quarter of 2007, before the recession began.

“From a perspective of trying to staff a restaurant and obtain the highest tier of talent, it is getting harder,” said Michael Harms, a senior business analyst with the People Report. “If there was any lingering doubt, this shows the situation from three years ago is gone.”

People Report bar chart

The U.S. economy as a whole added 437,000 jobs in the third quarter, up from 200,000 in the second quarter and 677,000 in the first, the Labor Department reported. The People Report said the foodservice industry added 70,800 jobs in the third quarter, compared to 52,600 jobs in the same quarter last year.

November and December are showing signs of more hiring. “The thing that we’ve seen fueling the rise is the expectation of hiring going into the holiday season,” Harms said. “That’s where we saw some of the largest increases. About 60 percent of companies expect to significantly increase their staff in the final three months of the year.”

Management staffing is starting to see some anecdotal pressure, said Joni Doolin, founder of the People Report. Hiring experts have started to express some concern about difficulty in that area, she said.

The Index’ plateau has been flat for several periods, Harms added.

“We’re in something of a holding pattern,” he said. “So many indicators have been flat. GDP [Gross Domestic Product] has been flat for an extended period of time. Unemployment, with the exception of the most recent month, has been flat for a couple of years. Sales for the industry have been flat. Traffic for the industry is relatively flat.

“We’re kind of sitting here waiting for the tide to either rise or fall,” he said, “and we’re seeing that reflected in these numbers.”

Workforce Index readings higher than 60 indicate especially stiff pressures. All four industry segments showed fourth-quarter index readings higher than in the third quarter:

• Quick Service: 72.8, up from 66.8
• Fast Casual/Family Dining: 69.6, up from 63.5
• Casual Dining: 65.8, up from 64.7
• Fine Dining/High Volume: 66.5, up from 64.3

The People Report fourth-quarter index report added that sister company Black Box Intelligence found “after posting positive growth in the first half of the year, comparable sales figures for the restaurant industry have been flat in recent months with negative guest traffic continuing to be an issue.”

Operator expectations are rising, however, the report noted, as hopes of a holiday spending surge in the wake of the U.S. presidential election may come to fruition.

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish