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Restaurant Chains Paying Less to Fewer Workers

People Report, a Dallas-based human-resources benchmarking firm, surveyed chain restaurant companies to learn how the downturn is affecting their people practices.

By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 5/1/2009

Restaurant worker
Slow, flat and even negative company growth means fewer employees on payroll receiving lower pay.

People Report, a Dallas-based human-resources benchmarking firm, surveyed chain restaurant companies to learn how the downturn is affecting their people practices. Of the 111 respondents, each from a different chain, 88 percent have reduced or expect to reduce their number of units or new openings, staffing levels, or salary raises and bonuses.

By the Numbers:
  • 41 percent of companies have closed or are planning to close units by the end of the year.
  • 77 percent of respondents say they have reduced the number of planned unit openings for 2009.
  • Upscale-casual and fine-dining chains are slowing growth the most: 80 percent are closing units, eliminating new unit openings or reducing the number of planned openings.
  • The same segment is expecting the greatest reduction in staffing levels: 80 percent are reducing their staffing levels, either by reducing the number of managers or hourly employees per restaurant or by reducing their number of hours. That figure is 69 percent for all segments.
  • 51 percent of respondents say they are reducing or planning to reduce the number of managers per unit, and 34 percent are reducing the number of hourly employees.
  • 42 percent have reduced or plan to reduce the hours worked by unit employees.
  • 43 percent of chains are freezing unit-level base salaries or eliminating bonus payouts.
  • At the same time, 54 percent of respondents are cutting corporate-staffing levels; 46 percent have a hiring freeze for corporate positions; 54 percent have frozen base salaries; and 29 percent eliminated bonuses for corporate employees.
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