After months of staffing reductions, there are indications that
the tide may be turning for the restaurant industry. The
People Report Workforce Index (WFI), a quarterly barometer of
market pressures on employment measures, has been trending upwards
in recent quarters and in Q1 10 registered its highest reading
since the 4th Quarter of 2008. With the exception
of Vacancies, which remained relatively flat, Employment Levels,
Recruiting Difficulty, and Employment Expectations all experienced
increases from their Q4 levels.
Among the key findings:
- Since bottoming out in Q1 09, Employment Expectations have
slowly risen for all industry segments and are now at levels not
seen the economic meltdown of 2008.
- Employment Levels have dropped significantly since Q3 08, but
staffing cuts appear to have abated and most companies are
maintaining their current staffing levels or cautiously adding
- Recruiting Difficulty is trending upwards for the first time
since Q3 08.
- Vacancies have been gradually increasing since hitting bottom
in Q2 09.
- Turnover pressures remain extremely low as unemployment
continues to rise.
Having shed jobs in each of the final six months of the year,
the foodservice industry ended 2009 having lost 54,000 jobs, 36,000
of which were lost in Q4. While these losses are significant,
the decline in payrolls for the quarter and for the year were just
over half of what they were one year ago when the industry lost
104,000 jobs. The majority of companies remain in a holding
pattern in regards to hiring in Q4, with just 25% of companies
reporting adding employees at both the hourly and management level
and the bulk of companies reporting no staffing changes.
Unemployment ended the year at 10% having been over 9% since
May. This extended bout of extremely high unemployment has
pushed industry turnover rates to record lows. These rates
have begun to level out and are not expected to fall much lower as
the economy regains its footing. In addition, the Recruiting
Difficulty component rose five points to its highest level since
the end of 2008---a sign which may foretell a subtle shift in the
While most operators would like to forget about 2009, it is
important to note that industry comp sales, while still negative,
were trending upwards towards the end of the year, with the top
quartile reporting positive sales according to industry analysis by
People Report's sister company, Black Box Intelligence.
Generating traffic and sales remains a challenge while news of
economic gloom lingers, but it appears as though the seeds of a
slow, impending recovery have begun to take root.
Consumer confidence in December, as measured by the Conference
Board's Consumer Confidence Index, registered a value of 52.9
during December, up from the 50.6 reported in November. By
comparison, the index was 38.6 in December of 2008 and the averaged
29.7 during the first quarter of 2009.
The Employment Expectations component of the People Report
Workforce Index registered a value of 61.9, with all segments
expecting an increase in payrolls during the first three months of
2010. This the highest level for this component since before
the economic collapse in the fall of 2008.
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