Workforce Outlook: Our Evolving Labor Force

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Concerns regarding the future of the restaurant industry workforce are increasing. As such, it’s necessary to take a deeper look into the findings of the NRA’s 2016 Restaurant Industry Forecast.

While it is true that the jobless rate in the United States is trending lower, the competition for restaurant employees is increasing. When the economy first began to recover the labor pool was deep. Now operators are finding that their job openings are not filling as quickly.

Bureau of Labor Statistics data shows that the restaurants and accommodations sector averaged over 660,000 end-of-month job openings in 2015, the highest monthly average in over 15 years. It’s important to note that the BLS began collecting this data in 2000, and that the previous record in end-of-month job openings was set in 2014. More specifically, the data series reveals that 2015 surpassed 2014 by 70,000 job openings per month. While we will need to see what happens in 2016, the data appears to confirm the concerns of restaurant operators.

The NRA’s forecast also shows that more than a quarter of restaurant operators say they currently have difficult-to-fill job openings. According to data the NRA has collected, the operators finding it most challenging to fill job openings operate in the Fine-Dining and Casual-Dining segments. The positions most difficult to fill across all segments are those in the back of house. Tableservice is most affected by this issue, followed by Casual-Dining, Fine-Dining, and Family-Dining.

Management positions, on the other hand, are more difficult to fill within the Limited-Service segmen than others, according to what the NRA has gathered. Quickservice and Fast-Casual operators report challenges in filling management openings. In contrast, just 26% of Fine-Dining and 20% of Casual-Dining operators have reported difficulties in this area.

Operators should be aware that 2015 saw a 38-year low in labor force participation. Contributing factors are the retirement of Baby Boomers, a large percentage of those who lost jobs during the Great Recession not returning to work, and a large number of teenagers not entering the workforce. The drop in teenagers entering the labor force is significant: the participation rate of teens dropped to 34% in 2014. That number was over 50% from the late 1970s to 2001, and it has trended downward ever since.

This decline has had a direct impact on the restaurant industry. From 2007 to 2014, the net decline was 1.4 million teenagers. That translated to just 20.9% of the restaurant industry being made up of 16 to 19 year olds in 2007. By 2014, that number slipped to just 16.6 percent. Still, one-third of all teens work in restaurants. However, the downward trend has caused operators to look at other demographics to fill their job openings: Millennials, older adults, and those over the age of 55.

As the labor force evolves, restaurant operators should expect those over 55 to be the fastest growing demographic group for the next several years. The BLS expects a drop in 16 to 24 year olds of 2.8 million by 2024. An increase of 1.7 million people belonging to the 55-to-64 demographic and 5.1 million of those aged 65 and older is predicted by the BLS between 2014 and 2024. Restaurant operators will have to evolve and adapt with the changing workforce in order to fill job openings for at least the next 8 years, should the predictions of the BLS prove accurate.

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