In this segment, let's focus on how the restaurant industry stands out in today's job market, what workforce changes may be coming, and how best to tackle them.
Restaurants Buoy in a Bad Economy
The National Restaurant Association (NRA) has referred to the restaurant industry as "an engine of job growth for the U.S. economy." For the last 12 years, restaurant job growth has exceeded that of the overall economy. This means that the last time restaurants weren't ahead of the economic curve, the average cost of gas was under $1.50, the Twin Towers still stood and there was no Wikipedia, Facebook, Twitter or iPods.
In 2012, the NRA projects the industry will employ 12.9 million people — essentially 20 percent of the American workforce. Over the next decade restaurants are expected to add another 1.4 million jobs to that total. In an economy where many Americans are still struggling to find a job, foodservice is one of the few industries that have continued hiring. Whether it is due to turnover or growth, the workforce growth of restaurants offers unique opportunities in today's economy.
One of the main opportunities — discussed in Part 1 — is the ability to recruit top talent into foodservice. However, as the economy picks up, there will be challenges.
Challenges on the Horizon
In the past year the economic climate ensured employees put forth their best effort with a renewed focus on company loyalty. Jobs were in high demand and positions easy to fill. People were unlikely to risk leaving their jobs. Turnover hit new lows in many restaurants.
Today, owners and managers are seeing a different reality. Retaining your top talent will grow increasingly difficult as the economy continues to improve and the labor market tightens. The 2012 Restaurant Industry Forecast reports that 56 percent more Fast Causal operators expect labor challenges to ramp up rather than be less of a challenge in the coming year.
One of the most comprehensive reports on service industry HR challenges is the PeopleMatter Institute's '2011 HR Tech' report. The survey results might surprise you. The No. 1 Human Resources challenge faced by restaurants of all sizes is sourcing high-quality applicants. (See the chart below.) However, companies incorporating online sourcing methods saw an increase in weekly applications. Respondents also felt more satisfied with applicant quality.
Other PMI survey results show:
60 percent of companies struggle with rewarding employee success
Career progression is the No. 1 factor in employee retention — even ranking ahead of salary
Incorporating electronic methods to communicate can reduce turnover by one-third
An online talent management system can improve culture satisfaction 7 percent and overall satisfaction by 46 percent
More than half of service-industry companies still conduct the majority of their HR tasks by paper or manual methods, despite the fact that switching to an online talent management system makes it easier to meet goals, increases day-to-day efficiency and can lower turnover by 43 percent. As your restaurant moves forward in this economy, managers will encounter increasing hiring needs and tasks, while facing even less time to focus on administrative duties.
(**To access last the '2011 HR Tech' survey results, click here. In order to participate in the '2012 HR Tech' survey, click on this link before July 1, 2012, and be among the first to receive the report.**)
Engage The Masses
The key to meeting talent management challenges in foodservice will be engaging your employees. Now is the time to ensure you are doing what it takes to hire top quality candidates and implement retention 'best practices.'
The highest-ranking factor in hourly employee retention is career progression —beating out salary and flexible scheduling. As discussed in "Restaurants Serve Up a Path to Success — Part 1," entry-level restaurant positions offer a strong foundation and path for future career growth. Proving to your employees that your restaurant is willing to invest in their future is the best way to earn their loyalty.
Offering training, clearly defined rewards programs and consistent feedback are all ways to organize internal growth and succession planning. PMI's survey found companies that incorporate an online talent management system increase their overall learning program satisfaction. In addition, these same companies increase satisfaction with training efficiency, effectiveness, thoroughness and quality. Implementing such a training system is the type of action necessary for restaurants to remain competitive in the "war for talent."
Changes are looming in the foodservice industry. As the economy continues to improve, owners and managers will apply the lessons learned from a difficult economy to improve their business practices. We have a seen a strengthened commitment to service as consumers demand more for their money. However, challenges in staffing will place a strain on providing the high-quality service necessary for success.
The restaurants that will come out ahead are those that can continue to bring in — and retain — the best employees.
Nate DaPore, PeopleMatter President and Chief Executive Officer
As the spirited leader of PeopleMatter, Nate is passionate about providing team members, including his own, with a rewarding workplace experience that values creativity and innovation.