Restaurant Workers in the Drive-Thru Lane

By Michelle Rafter

Apr. 13, 2005

The better the economy, the harder it’s going to be for restaurant chains to hang on to workers.

    That’s one conclusion restaurant industry researchers are reaching as they assess the impact of rising consumer confidence and other positive economic trends on the nation’s $476 billion food service business.

    When times were tough, quick-service–better known as fast food–and other restaurants had an easier time holding on to employees, says Teresa Siriani, president of People Report, a Dallas restaurant industry HR benchmarker. Once the economy picked up and jobs in other industries became available again, restaurant workers started to leave, Siriani says. “We’ve been telling (clients) not to be too fat and happy, not to be complacent because no more people are leaving,” she says. “Now with an election behind us, the economy is doing a nice recovery, and people are feeling bolder and will move.”

    Siriani’s observations are based on People Report’s just-published 2004 Survey of Unit Level Employment Practices, which collects data from the research firm’s 75 companies–members as well as non-members. Collectively, they represent $24 billion in annual sales.

    The findings are similar to those from the National Restaurant Association, which in its 2005 industry forecast sees labor shortages at a sizable portion of restaurant operators. More than half of quick-service restaurants and two out of five table-service restaurants said labor shortages were having a negative impact on business, according to a separate NRA survey released in October.

    According to the NRA’s 2005 forecast, restaurant operators are doing a number of things to hang on to workers longer, including spending more on training, providing English-language training for foreign-born workers and finding ways to bring down the cost of providing health care benefits.

    Restaurants will need to address labor issues if they want to fulfill projected growth in the industry, which currently employs 12.2 million people, or about 9 percent of all U.S. workers. Over the next 10 years, that number is expected to reach 14 million, according to the NRA.

    Chains whose management, from general managers on down, do a good job of treating midlevel and hourly workers as individuals will do the best at keeping people, Siriani says. That could mean regularly asking someone how employees are doing, taking someone’s family or school needs into consideration when scheduling work hours, or providing extra training before and after someone’s hired, Siriani says. She cited Applebee’s andJamba Juice as two chains that already do some of those things exceptionally well. (Also see articles onJack in the Box andSteak n Shake).

    To keep their workforces from walking out the door, restaurants also need to know where their compensation and benefits stand in relation to their competition, Siriani says. But it takes more than money for employees to stay put, he says. Companies with high employee retention rates promote teamwork by encouraging employees to jointly participate in community outreach, whether it’s a service project or chamber of commerce event.

    Leading-edge restaurants regularly survey employees and act on the results, which makes workers feel like they’re being heard, Siriani says. They also spend more time on orientation and classroom training, and have more diverse workforces, both in hourly and management ranks.

Michelle Rafter is a Workforce contributing editor.

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