The People Report Workforce Index, which measures expected market pressures on restaurant employment, remained flat in the first quarter 2015, nearly matching results from the fourth quarter 2014, after reaching a historic high during the third quarter.
The first-quarter overall index stood at 71.5, nearly the same as the 71.6 recorded in the fourth quarter. In third quarter 2014, the Workforce Index hit 77.8, the highest level since it was established in 2006.
The Workforce Index is produced by Dallas-based People Report and is based on surveys of human resources departments and recruiters in the restaurant industry. The index has a baseline value of 50, with 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 industry is continuing to add jobs from top to bottom, and it’s not getting any easier,” said Michael Harms, executive director of operations for People Report and sister TDn2K companies Black Box Intelligence and White Box Social, in an interview Tuesday. “It might be a dog fight for talent in the next coming quarters.”
People Report noted that the U.S. unemployment rate dropped to 5.6 percent in December, a full percentage point lower than where it began in 2014, marking the nation’s lowest jobless rate since June 2008. The overall economy created nearly 3 million jobs last year, the most in more than a decade.
In the fourth quarter, the foodservice industry added 118,400 jobs, compared with 68,000 in the same period a year before. The 360,000 foodservice jobs created in 2014 represented the foodservice industry’s largest annual job creation in 25 years, People Report noted.
“We’ve seen some really significant job growth over this last year, and it has maintained quarter after quarter,” Harms said. “It was a really strong Q4 to round out the year. Some of that pressure we’ve seen in recent quarters has continued to build.”
The Workforce Index employment levels component registered a value of 75.8, as “very strong job growth continued at both the hourly and management levels,” People Report’s first-quarter index noted.
Recruiting difficulty was 83.2, the highest level recorded since the Index was created. “Recruiting difficulty is at an all-time high, and our index goes back to 2006,” Harms said. “In quick service and fast casual, where there has been a lot of traction, you think those jobs would be easy to fill. But they are reporting some of the highest recruiting difficulty, both at the management and the hourly level.”
The first-quarter Workforce Index reported “modest increases” in vacancies, at 58.9, and turnover, at 52.1, from the fourth quarter 2014.
“Vacancies were already at a really high level, so we didn’t see much of an increase,” Harms said. “Turnover rates maintained their high levels. We’ve seen turnover rates, especially for quick service and fast casual, well in excess of 100 percent in recent quarters. That’s really been climbing.”
Overall Workforce Index rankings by industry category for the first quarter were nearly flat or slipped in all four segments, compared with the fourth quarter:
• Quick service dipped to 68.9, from 70.8.
• Limited service/fast casual/family dining fell to 77.5, from 84.7.
• Casual dining slipped to 66.6, from 67.4.
• Fine dining/high volume rose to 70.7, from 67.5.
Restaurant companies are reporting effects from the employment pressures, Harms noted.
“You’re hearing more about wage growth,” he said. “Employees are going to be in high demand in 2015.”
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