The People Report Workforce Index, which measures expected market pressures on restaurant employment, rose slightly in the second quarter, continuing to indicate staffing pressures in the industry.
The second-quarter overall index rose to 72.6, from 71.5 in the first quarter and 71.6 in the fourth quarter of 2014. All three quarters declined from the third quarter of 2014, when the Workforce Index hit 77.8, the highest level since the measure was established in 2006.
The Workforce Index is produced by Dallas-based People Report, and is based on surveys of human resources departments and recruiters in the restaurant industry. The index has a baseline value of 50, with 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 underway.
“Staffing pressures across the industry are among the highest we’ve recorded since the inception of this index in 2006,” said Michael Harms, executive director of operations for Dallas-based TDn2K, parent company to People Report, as well as Black Box Intelligence and White Box Social.
“We’ve seen that slowly build in recent quarters, and it’s really taking a foothold now,” Harms said.
While turnover rose in recent quarters, has flattened a bit over the past few months, Harms said.
“Turnover and unemployment are very closely tied,” he explained, noting that the nation’s unemployment rate remained between 5.5 percent and 5.6 percent from December through May. Turnover is generally a lagging indicator for economic activity, he said.
The U.S. economy added 591,000 jobs in the first quarter, falling from 973,000 in the fourth quarter of 2014, but increasing from the 579,000 jobs created in the same period a year ago. The foodservice industry added 99,400 jobs during first quarter, compared with 85,600 jobs in the prior-year period. Over the past year, the industry has added an average of 103,800 jobs per quarter.
Same-store sales across all restaurants tracked by Black Box Intelligence were at 2.8 percent.
“Even while the economy was cooling off and the weather wasn’t very kind, sales for the industry were pretty good,” Harms said.
Same-store traffic was slightly negative, falling 0.6 percent in the first quarter, Black Box found, and average check increased 3.3 percent in the quarter.
The vacancies and recruiting difficulties components of the Workforce Index were noticeably higher for the second quarter, Harms said. Vacancies reached a high of 73.8 in the first three months of the year, and recruiting difficulty, at 81.7, remained near record levels for the second consecutive quarter.
“Those two components were at some of the highest levels we’ve ever recorded,” he said. “Operators are really struggling to find those employees and fill those openings.”
Overall Workforce Index rankings by industry category for the second-quarter report were mixed when compared with the first quarter:
• Quick service rose to 74.7, from 68.9.
• Limited service/fast casual/family dining fell to 69.7, from 77.5.
• Casual dining rose to 76.8, from to 66.6.
• Fine dining/high volume declined to 65.6, from 70.7.
The continuing pressures are making human resources executives’ jobs more challenging, Harms noted.
“It’s like boiling a frog, where you turn the water up a little bit at the time,” he said. “It gets harder every quarter.”
Contact Ron Ruggless at [email protected].
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