DALLAS Restaurant companies are not ready to return to their pre-recession practice of hiring for the holiday season, but most plan to maintain current payrolls through the fourth quarter, the latest People Report Workforce Index found.
The survey of about 70 restaurant companies conducted by Dallas-based People Report shows that about 23,000 jobs were shed in the third quarter, which included three straight months of losses after three months of growth.
The report found that the industry added 29,000 jobs in the second quarter, but job cuts in the first and third quarters have resulted in an overall loss of 16,000 jobs year to date.
"The industry's workforce is normally very fluid, but what we've seen over the past year is a period of low growth and high unemployment, which has caused massive reductions in turnover and really served to alleviate the staffing concerns that so often plague the industry," said Michael Harms, human capital analyst for People Report.
Of those surveyed for the fourth-quarter outlook, 66 percent plan to maintain their level of hourly workers through the end of the year, while 26 percent said they would add workers. Only 8 percent planned to cut jobs, the report found.
At the management level, 72 percent said they would maintain current staffing, with 23 percent planning to add new hires and only 5 percent saying jobs would be cut.
Traditionally in the fourth quarter, restaurant companies add staff to deal with increased holiday traffic and sales, though that was not true last year after the economy took a turn for the worse in October. This year, Harms said, restaurant companies appear to be taking a "wait-and-see" approach.
"The industry is in a bit of a holding pattern right now," he said. "Businesses just absorbed another minimum-wage hike. There's still some unease about the current state of the economy, as well as a lot of lingering public-policy concerns. As a result, there is some trepidation when it comes to expanding payrolls."
However, "the worst appears to be behind us," Harms added, "and there is some cautious optimism heading into the final three months of the year."
The index measures operators' personnel expectations in employment levels, recruiting difficulty, job vacancies, turnover and employment expectations. A rating of 50 or more indicates strong growth or pressure to fill vacancies, recruit and increase staff. A reading of 50 or below denotes a slowing down of growth. The data are grouped into four segments: fine dining and upscale casual; casual dining; fast casual/family; and quick service.
All segments posted readings of more than 50 in the last report, denoting expected job growth during the fourth quarter.
Fine dining, however, posted the most modest staffing expectations with a rating of 54.7, with just 19 percent of companies expecting job growth at hourly and managerial levels. Other segments had expectations of 60 or above.
Only quick service added jobs in the third quarter, the report found. Most surveyed quick-service brands kept staffing levels steady during the quarter, but 31 percent said they added hourly employees, and 25 percent added managers.
"QSR has probably been the most stable in the last couple months, and I would expect them to lead us out of this," Harms said. "Fine dining will probably be the last to recover."
Contact Lisa Jennings at [email protected].