Restaurant Industry Employs Fewer, Pays Less
--Chain Leader,03/26/2009
PRESS RELEASE: People Report recently conducted a special online survey to learn how restaurant chains are adapting to the current economic downturn, currently and in the near term. The survey, published this week was completed by hundreds of executives, representing 111 distinct chain restaurant companies from all industry segments.
We focused on those measures that are directly related to the human capital element of our businesses and classified them into three categories: 1. those that affect the total number of restaurants operated, 2. those that affect the labor-hours required within each of these restaurants, and 3. those that affect the cash compensation of the industry's unit level managers and employees.
Foodservice companies have clearly been forced to take some measures to face the current situation; 88% of the companies that participated in the survey have either already reduced or expect to reduce their number of units or number of new unit openings, their restaurant staffing levels, or their base salary increases and bonus payouts for restaurant employees. However, as is explained in detail below, the response has relied more on reducing the restaurant chains' expansion plans and cutting the staffing levels than on modifying the compensation practices.
1. Number of restaurants operated: 71% of companies reported they were closing units or reducing the number of planned unit openings (see Figure 1). A very considerable 41% of all participants reported they have or are planning to close units by the end of the year. On a positive note, most of the unit closings seem to be already in the past, which means we should see job losses in the industry starting to slow down. What about new jobs being created? Not on a significant scale, apparently, given that 77% of the companies said they have either eliminated or reduced the number of planned unit openings for 2009.
Figure 1
Percentage of Companies Adjusting Their Number of Units1
1 Includes closing units, eliminating new unit openings, or reducing the number of planned openings.
2. Labor hours required per unit: 69% of the companies reported reducing their staffing levels, either by reducing the number of managers or hourly employees per restaurant or by reducing their number of hours (see Figure 2). Consistently across all industry segments, more companies reduced their number of managers than the number of hourly employees per unit. Fifty-one percent of all companies reported reducing or planning to reduce the number of managers per unit, while only 34% of the companies reported reducing the number of hourly employees. As was the case with the number of restaurants being closed, it seems that most of the adjustments to the staffing levels have already been implemented. Another way that companies have adjusted their practices is through the reduction of hours for their workforce; 42% of the companies have reduced or plan to reduce the hours worked by their restaurant employees.
Figure 2
Percentage of Companies Adjusting Their Restaurant Staffing Levels1
1 Includes reducing number of managers per unit, number of hourly employees per unit, or number of hours.
3. Cash Compensation: Only 43% of the restaurant chains surveyed opted for adjusting their compensation practices, either by freezing their unit level base salaries or by eliminating bonus payouts (see Figure 3). The industry's response has been centered more on freezing salaries (43% of participating companies) than on eliminating bonuses (14% of companies).
Figure 3
Percentage of Companies Adjusting Their Restaurant Compensation Practices1
1 Includes freezing base salaries or eliminating bonus payouts.
Corporate Employees Feel the Pinch... Even More
The reaction to the crisis has been much more aggressive inside the walls of the corporate office, with 54% of all companies cutting staffing levels and 46% introducing a hiring freeze for all corporate positions. The response in terms of compensation tactics has also been more significant for corporate employees than for their unit level counterparts: 54% of the participating companies said they have frozen base salaries and 29% reported eliminated bonuses for corporate employees.
People Report currently serves over 120 chain restaurant operations that represent over 160 concepts, over half a million management and millions of hourly employee records. The company provides industry leading, benchmarked research for key human capital metrics, best employment practices, total rewards and compensation for chain operators, franchisees and independent restaurants.
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| Submitted by: | Hossam aboueissa (Hossam_aboueissa@yahoo.com) 3/28/2009 8:00:28 PM PT |
| Location: | alex/egypt |
| Occupation: | previous resaturant supervisor/resaturants diploma |
interested article,interested research,kindly note about my appreciation while i visit website of (people report),as modern standards of HR system.HR operation,high level of distinctive training program ,and consulting for food service industry and restaurants industry ,thus i send the article of (people report) to editor in chief of book of the day in Egypt, i wrote an article bout my admire of your association(people report) as professional corporation in supporting and improving training of managerial skills, restaurants service operation skills,and other qualification to working in hospitality career i send this article , kindly note that there is a statement in my article when i mentioned about research on (new castle university/England) the research by British researcher (Kristine Douglas)about more kindly manner with cow means more milk production as research of monthly production,or as yearly milk production it was particular analysis research, which i take it as example for more kindly manner with human means more creation and more innovation and more civilizes,more progress ,more people comfortable which is my private philosophy in the purpose of professional hospitality industry, it is a appropriate answer of question(why people need hospitality industry)and i think that British researcher was agree in the same conception,although the research as a target for farmer in the other wise as a suitable target for people whom involving in working at a any branch of hospitality operation because friendly manner and kindly behavior is improve people life ,both employee whom working in hospitality industry must be polite or other wise people whom looking for beauty threw delegated hospitality operation they become also polite personality it means hospitality industry improve both employee character whom working in the field, or customer or client character whom need successful hospitality operation because the effective of kind behavior of crew member will be positive effect on customer behavior,and customer character
kind regards
hossam
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