Restaurant Expert Outlook on Foodservice Jobs and Independents

There are two recent trends reported by this restaurant expert on growth in both jobs and the lack there of in independent restaurants that are worth reading. In terms of the economy, the recession has helped stabilize some of the turnover amongst hourly employees in the food service business. However, the same economic downturn has caused non-chain, independent food and beverage operations to decline at some of the highest levels since 2007. Turnover Getting Higher! Sometimes a negative can be a positive, at least in the hospitality industry. Typically, hourly employee positions at restaurants, hotels and similar operations are the most difficult to fill because of high turnover. In this recent report: “The Workforce Index showed that over the last 12 months, the restaurant industry has created 185,000 jobs, the highest 12-month total since December 2007. The majority of companies surveyed for the People Report data added hourly workers and maintained management employee levels. Just 2 percent made reductions to hourly workers and 10 percent made reductions to management positions. The index also found that turnover rates were increasing, with 40 percent of companies experiencing rising turnover rates at the hourly level, up from 31 percent in the previous quarter.” Another restaurant expert states “The thing that everyone needs to be aware of — and what a lot of operators worry about — is turnover,” Michael Harms, a senior business analyst for the People Report, said. “Turnover is, of course, costly and painful for most companies. It’s a lagging indicator.” Bye, Bye to Small Independents? According to The NPD Group: “U.S. commercial restaurants closed at a faster rate than new openings, creating a two-year pattern of decline, according to the latest restaurant census released Tuesday.” What equally disturbing in our opinion if you are a non-branded restaurant trying to survive in this economy is that history is not on your side. “The decline in independent units is the steepest we’ve seen since NPD began conducting the ‘Spring ReCount’ census in 2001,” said Greg Starzynski, NPD’s director of product development-foodservice. The census is conducted each spring and fall. A volatile economy, frugal consumers and a lack of financial backing have made it a difficult business environment for independent restaurants, Starzynski added.” Food service management can view this report here. More restaurant consulting help can also be found at our blogs. Are you encountering similar problems either in finding employees or staying afloat? Feel free to post a question for our restaurant expert. Or, if you have another foodservice business issue requiring advice, please request a no-charge initial consultation below.