Restaurant Employment Pressure Expected Through 2012

The People Report Workforce Index, which measures expected market pressures on restaurant employment, dipped for the third quarter of 2012 from highs in the second quarter that hadn't been seen since 2007.

The readings still indicated restaurant operators would continue to face challenges surrounding recruitment and retention in the second half of the year.

The Workforce Index, based on surveys of restaurant human resources departments and recruiters, 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 currently underway.

The third-quarter Workforce Index stood at 65, about four points lower than in the previous quarter. The second quarter saw the Workforce Index's highest reading since the first quarter of 2007, before the recession began.

Overall: All industry Segments

Michael Harms, senior business analyst for the Dallas-based People Report and Black Box Intelligence, which produce the quarterly reports, said in an interview Thursday that operators reported "a little trepidation" after seeing employment pressures pick up over the past year.

"The first part of the year, the economy seemed to be picking up steam and everybody had high expectations," Harms said. "I think those expectations may be curbing a little bit as a little uncertainty has crept back into the marketplace. ... I think we're seeing a lot of that wariness as we move into the second half of the year on both the unemployment side and staffing as well."

Overall workforce index Q3 2012

The Labor Department on Friday reported that the U.S. economy generated 163,000 jobs in July, above the 100,000 that economists had forecast. The jobless rate, however, inched up to 8.3 percent from 8.2 percent in the prior month as more workers sought employment.

Harms said restaurant operators still saw pressures in hiring levels and recruiting difficulties in the third quarter. "They are at some of the highest levels we've tracked in recent years," he said. "But, at the same time, we're seeing mixed signals. We're seeing unemployment level off or tick up. ... There are so many conflicting indicators going into the second half."

Workforce Index readings higher than 60 indicate especially stiff pressures. All four segments showed third-quarter index readings lower than in the second quarter:

• Quick Service: 66.8, down from 75.2
• Fast Casual/Family Dining: 63.5, down from 69.6
• Casual Dining: 64.7, down from 67.1
• Upscale Casual/Fine Dining: 64.3, down from 68.2

The People Report third-quarter index added that sister company Black Box Intelligence found "comparable sales figures for the restaurant industry have been improving, albeit slowly, all of which is translating to increasing workforce demands and additional staffing."

Contact Ron Ruggless at ronald.ruggless@penton.com.
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