Restaurant employment is starting to rebound from the historic losses

COVID-19 , Industry News ,

Source: National Restaurant Association

The coronavirus pandemic is having a devasting impact on the restaurant industry and its employees. Eating and drinking places* lost more than 6 million jobs in March and April, according to preliminary data from the Bureau of Labor Statistics (BLS).

[Note that these statistics only extended through the payroll period that included April 12, and likely didn’t measure the full extent of the job losses that continued in the weeks that followed. Based on two national surveys conducted by the National Restaurant Association in April and May, restaurant operators laid off or furloughed an estimated 8 million employees.]

As reported by BLS, there were 6.3 million employees on payroll at eating and drinking places in April. This represented the industry’s lowest employment level since May 1988. Overall, restaurants lost nearly three times more jobs than any other industry in March and April.

Today’s BLS employment report illustrates the resiliency of the restaurant industry. As restaurants started to reopen in communities large and small, employees were being rehired. Eating and drinking places added nearly 1.4 million jobs in May, according to BLS. That’s nearly three times more job gains than the next closest industry (construction firms added a net 464,000 jobs in May).

This job growth is consistent with a recent National Restaurant Association survey of restaurant operators. In a nationwide survey conducted in mid-May, 62 percent of restaurant operators who laid off or furloughed staff said they rehired some of these employees in recent days or weeks. On average, these operators rehired 48 percent of the employees that were laid off or furloughed.

Moreover, 61 percent of restaurant operators said they anticipate adding more employees to payroll within the next 30 days.

As a result, the expectation is that the industry’s unprecedented employment decline is over, barring a major second wave. However, don’t look for restaurant staffing levels to return to normal anytime soon. When asked in the Association’s May tracking survey, two-thirds of restaurant operators said they don’t expect their employee headcount to return to pre-coronavirus levels before the end of 2020. 

Job losses varied significantly by segment

While the coronavirus-related job losses were widespread across the restaurant industry, some segments were impacted more than others. The cafeterias/grill buffets/buffets segment cut 87 percent of its workforce between February and April, according to BLS. Staffing levels at bars and taverns plunged 80 percent during the two-month period.

Employment in the fullservice segment fell by two-thirds between February and April, while payrolls at snack and nonalcoholic beverage bars shrunk 53 percent. 

The quickservice and fast casual segments fared comparatively better, as most of these operations were already well-equipped to handle off-premises traffic – the only option available for several weeks. Staffing levels at quickservice and fast casual establishments fell 22 percent between February and April – the smallest decline out of the major industry segments. 

*Eating and drinking places are the primary component of the total restaurant and foodservice industry, which prior the coronavirus outbreak employed 12 million out of the total restaurant and foodservice workforce of 15.6 million.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.