As unemployment has risen over the past couple of years, we've
seen turnover fall to record lows. This really should come as
no surprise-it's basic economics: the supply of workers
increases as the demand for workers goes down. And when the
demand for workers is low and there is little competition among
employers for workers, wage growth is stagnant.
This, in a nutshell, is what we've just experienced. These
were a few of the effects of "The Great Recession." But guess
what---the recession's over. And while money may not be
falling from the sky, it's important that we recognize that the tide has turned, and to quote an underappreciated British band, " It's gettin' better, man!"
Just as shifts in the economy brought about declining sales,
rising unemployment, and falling turnover, as the overall economic
outlook improves we are going to start seeing shifts in the other
direction. Comp sales and guest counts are moving into
positive territory after many months of negative sales. And
since employment changes are generally a lagging economic
indicator, it means workplace changes are on the horizon.
According to the recent People Report Economic Conditions
Survey, 48% of restaurant companies reduced staff at the corporate
level in 2009. Just 3% plan to make additional cuts in
2010. Restaurants posted positive job growth for the first
three months in 2010, adding over 42,000 jobs. This was the
first string of three consecutive months of job growth since the
end of 2007 when the recession began.
And what's the outlook for the second quarter? More job
growth ahead according to the People Report Workforce Index.
Nearly all companies surveyed planned to maintain their current
staffing levels or increase staff in the months ahead.
Changes to compensation may be on the horizon as well.
After many companies froze salaries in 2009, the percentage of
companies who have lifted this freeze has dropped considerably in
2010. Check out the graphs below:
Just as we went through a period of considerable change in 2008
and 2009, we are going through a period of flux right now.
It's called a recovery. If you think workplaces issues aren't
a concern right now, consider this your warning. The issues
you shelved for the last two years are on their way back, slowly
but surely, and with an added dose of government intervention,
addressing them will be even more challenging.