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Wednesday, January 20, 2010

Younger Workers Face Challenging Market

It's no surprise that young workers play a crucial role in meeting the labor needs of the restaurant industry.  According to our friends at the National Restaurant Association, over one in four adults got their first job experience in a restaurant.  However, the labor force participation rate for younger workers has been experiencing a steady decline over the past decade.  In recent years these individuals have, in large measure, voluntarily opted out of the workforce.  For those individuals who are looking for jobs, more and more are finding themselves on the sidelines as unemployment skyrockets and job creation remains scarce.

A proliferation of young workers is especially vital to Quick Service restaurants.  While this industry segment has fared better than many during the economic slowdown of recent years, younger workers continue to feel the squeeze of a buyer's market when it comes to labor.  Let's take a look at how these workers have fared in the job market in recent years…

According to our research, 60% of hourly workers in Quick Service restaurants are aged 25 or less.  

At the start of 2008, 54% of newly hired entry-level managers at fast food restaurants were under 25.  In the third quarter of 2009, that number had dropped to 46%.  Since the start of 20100120_Under_25_Workers.jpg2008, unemployment rates for workers in this age range have soared and the hourly turnover rate for Quick Service has plummeted nearly 30% in the past twelve months.

As a result, the market is being flooded with experienced and able workers.  We've seen the tenure level of terminated workers for the industry as a whole rise 20% during that time and on the hiring side, the experience level of newly hired assistant managers is 12% higher than it was at the start of 2008.

While young workers are a key component of the foodservice labor force there are currently a) fewer job openings, b) a supply of older, experienced workers, and c) public policy concerns which discourage hiring inexperienced workers (minimum wage hikes and the looming prospect of card check in particular).  You add these up and it is a recipe for high unemployment for young, inexperienced workers.

Michael Harms | Post a Comment | Email Article


1 comment(s) for “Younger Workers Face Challenging Market”

  • Kacy Oden Says:
    Great post! Thanks Michael!