More Hiring Challenges In 2012

The People Report Workforce Index, which measures market pressures on restaurant employment, rose in the first quarter of 2012, an indication that operators will continue to face challenges regarding recruitment and retention.

The Workforce Index, based on surveys of restaurant human resources departments and recruiters, stood at 62.6, about three points higher than in the previous quarter. It was the Workforce Index' highest mark since 2007.

Michael Harms, senior business analyst at the Dallas-based People Report, said the first-quarter Index reading continued momentum seen in 2011.

"The ease of hiring and the ease of finding candidates is going away and going away quickly," Harms said.

The Workforce Index measures from a baseline value of 50, with results over that level indicating increased pressures on the five components: employment levels, recruiting difficulty, vacancies, employment expectations and turnover.

"The industry is continuing to add jobs," Harms said. "Turnover is slowly increasing as we are seeing unemployment across the economy fall. We're hearing it from our member companies that they are finding it harder and harder to find some of those qualified employees that were so easy to find just a year or two ago."

Harms said readings were strong in all four industry segments monitored by People Report, especially in quick service.

"We're starting to see a pickup in the fine-dining, upscale-casual segment, which really took a beating during the recessionary period," he added.

Workforce Index readings higher than 60 indicate especially stiff pressures, and by segment the first quarter readings were:

Quick Service: 66.6, off by 0.8 points
Fast Casual/Family Dining: 61.3, up 11.8 points
Casual Dining: 61.5, up 3.4 points
Upscale Casual/Fine Dining: 66.0, up 3.9 points.

Among the components of the index, the Employment Levels indicator increased 4 points to 65.2 during the quarter, as companies in the industry continued to add to their payrolls. People Report said 46 percent of participating companies added hourly workers, up from 39 percent the previous quarter. About 40 percent reported holding staffing levels steady and 15 percent were making reductions.

For employment pressures on the horizon, the index' Employment Expectations component registered 69.7, which the report said indicated strong job growth in the first quarter.

About 43 percent of companies plan to add staff at the hourly level in first quarter, up slightly from the 42 percent who indicated that in the fourth quarter report.

At the management level, 51 percent of companies plan to add staff, up from 39 percent in fourth quarter, while 44 percent of companies reported holding staffing levels steady and 4 percent planning reductions.

"There are still some trouble spots for the economy, and they could pose a problem in the future," Harms said. "But it looks like 2012 is poised to be a fairly solid year for the industry, and that's going to be reflected in employment growth and employment pressures."

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