The lingering days of summer have flared another labor challenge for restaurants. The industry shed 41,500 jobs in August—the first negative month since January. From the start of 2021 to that turn, food and drink places added 1.03 million jobs, bringing the overall figure to 11.3 million. Despite gains, restaurants remained a million jobs short of pre-COVID-19 levels.
Why this trend changed course could be traced to a few factors, including Delta concerns, and the fact the U.S. quit rate returned to all-time highs. Many workers in the private sector left and moved on, a reality happening at a pace not seen in two decades.
Adam Ozimek, Upwork's chief economist, recently told Yahoo Finance the quit-rate phenomenon, mainly in the lower-skilled labor market, was a result of expanded unemployment insurance, child-care needs, and general discomfort with returning to work. Plus, accumulated savings from stimulus checks and UI, which gave people the luxury to wait and measure options.
But could relief be in order? “I do think what we are going to see is those pressures are going to ease somewhat in coming months,” he said. “Expanded unemployment has ended. Schools are back in session. You know, the pandemic will be increasingly fading. So I do think that we're going to see a lot more people coming back looking for work, and we should see some of those pressures easing.”
More than 45 percent of restaurant operators, according to a Black Box Intelligence poll in early September, still believe higher pay in other industries is the main culprit for employees fleeing. Other reasons include better working hours, company culture, and a lack of development opportunities.
A full 100 percent of companies in Black Box’s 2021 Total Rewards Survey Report said they were understaffed at the hourly level. Eighty-one percent noted a shortage of managers and 50 percent lacked GMs.
Without much debate, COVID and the current dynamic disrupted recruiting. Nearly 90 percent of companies told Black Box they’re now offering referral bonuses for hourly employees. Compared to 2019, it’s up some 20 percentage points.
Additionally, versus 2019, the average number of sick days offered as paid time off leapt 2.5 times for hourly workers.
Don’t forget about corporate employees, either. Per Black Box, 46 percent of office staff are expected to work in-person at least three days a week in the coming months. Only 28 percent of 300-plus operators called working at the home office “completely voluntary”
In an Upwork study, 34 percent of currently remote workers said they were not excited about returning to the office.
So there’s still a lot on the table, to put it lightly.
While these are all familiar themes to restaurant operators, the coming seasonal shift has surfaced newfound uncertainty. Was part of the August downturn related to demographics? Did a cyclical trend run its course?
One positive after-shock of an industry-wide lift in wages, it appeared, was a surge of teenagers back into the workforce. In May, 33.2 percent of Americans aged 16–19 had jobs, according to the DOL. That was the largest count since 2008.
Seventy-five percent of the restaurant workforce in 2020 was Gen Z or millennials. Of the 6.55 million workers employed in food preparation or service at the end of the year, 39.4 percent were Gen Z, 35.6 millennials, 11.6 percent Gen X, and 13.4 percent Boomers.
Specifically, of 655,000 quick-service workers, 65 percent were under the age of 25 (Gen Z). Only 7 percent were Baby Boomers.
Naturally then, the shift offered a bit of a safety valve during a chaotic stretch. Yet is it going to last with school back, and younger groups returning to in-person learning?
One sign of things to come, potentially, could be a McDonald’s in Oregon that recently gained national buzz when it posted a sign reading, “Now Hiring 14 and 15-year-olds.” The move brought in 25 new applications in two weeks.
All of that in mind, restaurants are approaching the edge of another annual headliner in the calendar: the holiday season. It feels safe to say this year will be nothing like 2020, and probably far different than 2019 as well.
Snagajob released a report on the subject, which explores what might just be a robust opportunity for operators to get staffing help amid inflationary challenges and the ongoing struggle to satisfy pent-up demand.
There are currently about 70 percent more job vacancies than pre-pandemic levels and 10 percent fewer people looking for work—the greatest gap in recorded history. There are 1.5 jobs openings for every hire made, the highest ratio ever tracked.
Per Snagajob, 58 percent of employers are hiring for holiday roles and 42 percent of hourly workers are looking for seasonal work, down from 87 percent last year.
The National Retail Federation predicted this year’s holiday retail sales will bump 6.5–8.2 percent, pumping more than a $1 trillion into the economy.
And Snagajob believes holiday hiring trends are going to swing upward as well.
The company also anticipates the holiday rush will start 4–6 weeks earlier than usual as consumers get a taste of limited inventory and delayed delivery due to supply chain and labor shortages—prompting many to get in the festive shopping spirit early.
Below is a look at who is searching for hourly holiday work.
- 16–24-year-olds: 31 percent
- 25–40: 26 percent
- 41–56: 27 percent
- 57–66: 13 percent
- 67-plus: 3 percent
Forty-two percent of people reported searching for seasonal work, while 43 percent said they were looking for permanent employment. Notably, 63 percent classified as “first-time holiday job seekers.”
In this pool, 79 percent said they plan to apply by September for holiday jobs. Fifty-three percent want to start working immediately. Of those searching for hourly holiday work, 32 percent were parents.
The motivation? (keys to consider in recruiting marketing materials)
- Supplemental income: 51 percent
- Flexible schedule: 45 percent
- Hoping to turn it into a longer-term employment opportunity: 41 percent
- Need short-term income: 30 percent
What’s interesting there is it goes beyond earning a quick buck, so to speak. Cash will always be king in hiring, but the seasonal effort has multiple layers to it.
Where are they looking?
- Online job boards: 90 percent
- Referrals from friends/word of mouth: 42 percent
- Social media: 39 percent
- Walking into local businesses: 37 percent
How are they searching?
- Location: 72 percent
- Job title: 67 percent
- By industry: 46 percent
- By numbers of hours (full or part time): 44 percent
What’s are the incentives to promote?
- 1. Flexible schedule
- 2. Increased pay rate (to note, 66 percent of employers told Snagajob they did not plan to boost rates just for seasonal workers).
- 3. Paid leave
- 4. Discounts on products/services
- 5. Potential for permanent hire
On the flip side, 56 percent of employers want “availability” in seasonal workers; 11 percent target “flexibility.”
Workers in the study, on the median, said they hope to make $17 per hour this holiday run. Forty-nine percent added how much they interact with the public would be a consideration when applying.
The top things people are looking for in a job description, in order of importance.
- Pay rate: 83 percent
- Hours/shifts needed to be worked: 79 percent
- If flexible scheduling is available: 70 percent
- Benefits offered: 54 percent
Here’s an interesting window into the changing landscape. Cashier was the top role employers said they were hiring for this year, at 76 percent. Customer service (48 percent); delivery driver (25 percent); curbside pickup (21 percent); and cleaning sanitation (19 percent) followed.
Those latter two, in particular, jump out. They might provide a bridge for hourly workers to get through the door and for restaurants to observe, in real-time, whether or not somebody can be cross-trained to do something else (i.e., a 15-year-old). Many chains are hiring based on potential fit over resumes of late. In some cases, truthfully, they’re just hiring whoever is willing to show up.
This goes both ways: Nineteen percent of workers in the study said they were using seasonal work as a way to test out the company. Fifty-one percent of employers listed “potential for permanent hire” as a benefit for seasonal workers.
A potential differentiator for restaurants would be to promote possibilities for long-term employment within job descriptions. Part time or not.
“For some workers, the lasting impact of the pandemic has less to do with mask mandates and sanitization, but rather, has changed their career outlook entirely,” Snagajob said.
People flocking back into the workforce have higher expectations due to COVID, with pay and other factors. For some, it’s about reaching their potential (37 percent of workers said they’re viewing this holiday season as a chance to turn roles they find into something lasting).
Job posts mentioning sign-on bonuses are up 14 percent from the start of the year. Twenty-three percent of employers are providing professional development opportunities; 17 percent bonuses; and 9 percent health insurance.
Another visible way to look at it is that postings for positions that do not require four-year degrees included the term “career advancement” 35 percent more often from March–July than in the same window two years ago.
Where will people look for additional holiday staff?
- Word of mouth: 56 percent
- Via online job boards: 51 percent
- In-store advertising: 46 percent
Referral programs are still vital—referrals have 5X the hire rate of other applicants.