An economic turnaround is still out of reach as restaurant chains continue to cut pay and staffing levels, according to a recent survey of Chain Restaurant Compensation Association, a group of more than 100 member companies.
"This is a tough time for many organizations as they make difficult decisions in order to keep their businesses profitable," said Wendy Harkness, president of the CRCA and vice president of Checkers Drive-Thru Restaurants, a more than 490-unit quick-service chain based in Tampa, Fla.
Nearly 50 percent of surveyed CRCA members reported they are either freezing salaries or decreasing their salary budgets for 2009, while 45 percent were not making any salary changes this year. In other cost-saving measures 27 percent are planning to decrease overtime hours and 13 percent are planning layoffs.
Seventeen CRCA members were among the 1,991 companies across industries in 88 countries that participated in the survey conducted this spring by the Hay Group, a human resources and management consulting firm. The Hay Group culled out data specific to CRCA members and released a report earlier this month.
Nearly two-thirds of CRCA members were extremely concerned with retaining top talent, half were extremely concerned with maintaining or being able to afford competitive pay, and almost 80 percent were extremely concerned about maintaining employee engagement and motivation.
More than 80 percent of CRCA members said their employees were somewhat to extremely concerned about layoffs, salary and lack of bonuses. Ninety-three percent said their employees were somewhat to extremely concerned about cost of living and inflation.
Employees also were somewhat to extremely concerned about company revenues and customer traffic, according to 86 percent of CRCA members.
Having worried employees underscores the need for clear and constant communication during a recession, Harkness said.
"When employees don't know what is going on, they tend to invent, and often their inventions are far worse than the true story," she said. "Be open and transparent. That pushes down the fear factor."
The survey did show that most CRCA members were preserving their employee training budgets. Almost half reported no change, and while 13 percent reported decreasing training budgets, 13 percent reported increases to training budgets. Another 13 percent were considering a change.
"While revenue and customer counts may be down right now, it is crucial to make sure the customers you do have are getting great service and great food," said Tom McMullen, vice president and head of the Hay Group's U.S. Reward Practice in Chicago.