California does well as workforce growth slows

2016-10-18 15:49    

The People Report Workforce Index for fourth quarter predicts continued staffing and retention difficulties for the industry.

The best performing region in the third quarter was California. It was the only region with positive sales in each quarter of 2016. California also had the largest absolute gain in year-over-year personal income for the second quarter, which likely translated into positive restaurant spending in recent months. The weakest region in the third quarter was again the Southwest, a distinction it has held for the last four quarters. Income growth seems to be a factor here as well. Of the four states included in this region, three (New Mexico, Louisiana and Oklahoma) are among the 10 states with lowest personal income year-over-year growth rate during the second quarter.

Restaurant workforce growth slows

After growing at an average 3.7 percent year-over-year during the first seven months of the year, the creation of new chain restaurant jobs has slowed down since July. The growth rate for August was a modest 0.7 percent, according to TDn2K’s People Report. Even if this may alleviate some of the staffing pressures for restaurants, turnover rates for both hourly employees and restaurant management positions increased again during August. The industry has been experiencing an upward trend in its turnover rates for the last five years. Restaurant management turnover is now higher than it was before the recession for all industry segments and employee retention has been cited by most restaurant operators as one of their most critical challenges for 2016.

The People Report Workforce Index for fourth quarter predicts continued staffing and retention difficulties for the industry. Combined with the declining sales growth for many brands and segments of the industry, significant challenges are expected through the end of the year.

TDn2K (Transforming Data into Knowledge) is the parent company of People Report, Black Box Intelligence and White Box Social Intelligence. People Report provides service-sector human capital and workforce analytics for its members on a monthly basis. Black Box Intelligence provides weekly financial and market level data for the restaurant industry. White Box Social Intelligence delivers unparalleled consumer insights and reveals online brand health. Together they report on over 36,000 restaurant units, over 1.5 million employees and $61 billion in sales. They are also the producers of two leading restaurant industry conferences: Summer Brand Camp and the Global Best Practices Conference each held annually in Dallas.