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Restaurant hiring pressure increases in 2Q

The People Report Workforce Index rose nearly five points for the quarter
Thinkstock

The People Report Workforce Index, which measures expected market pressures on restaurant employment, rose nearly five points in the second quarter, with hiring pressures increasing across all segments.

The quarterly index registered 66.0, up from 61.1 in the first quarter, and indicated restaurant operators will continue to face recruitment and retention challenges for the next three months.

The Workforce Index is produced by 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.


“It’s kind of a continuance of what we’ve seen in the last few indexes that we’ve published in that there’s nothing spectacular that’s happening,” said Michael Harms, executive director of operations for the People Report and Black Box Intelligence. “It’s very representative of what we’re seeing in the economy at large, where it’s stable and slowly and consistently improving from quarter to quarter.”

The index noted increased restaurant hiring in the first quarter and the expectation of more hiring in second quarter, with the strongest pressures in the quick-service and fast-casual/family-dining segments.

“Obviously the lower price point continues to be a big selling point for these two segments,” Harms said. “Your typical fast-casual and [quick-service] employee may have more options when it comes to those job openings, so the job market is more fluid there.”



The index found “employment expectations” very strong, ranking 78.8, “with the majority of companies looking to add staff at both the hourly and management levels,” the report said.

“When we stop and look at it from a two- or three-year perspective, the trend lines are pretty consistent in their direction and their scope,” Harms said. “It’s a slow and gradual increase, which reinforces that we are seeing positive momentum. It’s not earth-shattering, but it’s slow and consistent.”

The U.S. economy added 504,000 jobs during the first three months of 2013, a dip from the 626,000 added in the fourth quarter. The foodservice industry added 51,200 jobs in the first quarter compared to 94,900 in the same quarter of last year.

After modest readings in first quarter, restaurant companies reported a marked increase in both vacancies (62.1) and recruiting difficulty (60.8) in their second-quarter outlooks.

“It’s gotten a little harder in each quarter for these employers to find the people they want for these positions,” Harms said. “As the industry creates more jobs and positions, it will be interesting to see how much of a challenge operators are going face.”

Casual dining was the only one of the four industry segments measured in the second-quarter index to show a dip in the “overall” number from the first quarter:

• Quick service rose to 70.8 from 63.8,
• Fast casual/family dining increased to 70.1 from 57.8
• Casual dining fell to 62.9 from 65.2
• Fine dining/high volume rose to 64.7 from 58.7

On the horizon, Harms said he’s watching the turnover numbers closely.

“The big question for me is, ‘When do we hit that tipping point?’” Harms said. “We’ve seen a lot of these index components slowing rise. The one that has been the most stagnant is ‘turnover.’ We know turnover is a chronic challenge for the restaurant industry and usually a lagging indicator. When it hits, it can catch people off guard.”

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless

Restaurant hiring pressure increases in 2Q

The People Report Workforce Index rose nearly five points for the quarter
Thinkstock

The People Report Workforce Index, which measures expected market pressures on restaurant employment, rose nearly five points in the second quarter, with hiring pressures increasing across all segments.

The quarterly index registered 66.0, up from 61.1 in the first quarter, and indicated restaurant operators will continue to face recruitment and retention challenges for the next three months.

The Workforce Index is produced by 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.


“It’s kind of a continuance of what we’ve seen in the last few indexes that we’ve published in that there’s nothing spectacular that’s happening,” said Michael Harms, executive director of operations for the People Report and Black Box Intelligence. “It’s very representative of what we’re seeing in the economy at large, where it’s stable and slowly and consistently improving from quarter to quarter.”

The index noted increased restaurant hiring in the first quarter and the expectation of more hiring in second quarter, with the strongest pressures in the quick-service and fast-casual/family-dining segments.

“Obviously the lower price point continues to be a big selling point for these two segments,” Harms said. “Your typical fast-casual and [quick-service] employee may have more options when it comes to those job openings, so the job market is more fluid there.”



The index found “employment expectations” very strong, ranking 78.8, “with the majority of companies looking to add staff at both the hourly and management levels,” the report said.

“When we stop and look at it from a two- or three-year perspective, the trend lines are pretty consistent in their direction and their scope,” Harms said. “It’s a slow and gradual increase, which reinforces that we are seeing positive momentum. It’s not earth-shattering, but it’s slow and consistent.”

The U.S. economy added 504,000 jobs during the first three months of 2013, a dip from the 626,000 added in the fourth quarter. The foodservice industry added 51,200 jobs in the first quarter compared to 94,900 in the same quarter of last year.

After modest readings in first quarter, restaurant companies reported a marked increase in both vacancies (62.1) and recruiting difficulty (60.8) in their second-quarter outlooks.

“It’s gotten a little harder in each quarter for these employers to find the people they want for these positions,” Harms said. “As the industry creates more jobs and positions, it will be interesting to see how much of a challenge operators are going face.”

Casual dining was the only one of the four industry segments measured in the second-quarter index to show a dip in the “overall” number from the first quarter:

• Quick service rose to 70.8 from 63.8,
• Fast casual/family dining increased to 70.1 from 57.8
• Casual dining fell to 62.9 from 65.2
• Fine dining/high volume rose to 64.7 from 58.7

On the horizon, Harms said he’s watching the turnover numbers closely.

“The big question for me is, ‘When do we hit that tipping point?’” Harms said. “We’ve seen a lot of these index components slowing rise. The one that has been the most stagnant is ‘turnover.’ We know turnover is a chronic challenge for the restaurant industry and usually a lagging indicator. When it hits, it can catch people off guard.”

Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless