Restaurant employment recovery is in danger of stalling
Source: National Restaurant Association
The restaurant industry suffered far more job losses than any other sector during the coronavirus pandemic, as government-mandated lockdowns led to millions of restaurant and foodservice employees being laid off or furloughed in March and April.
What followed was an unprecedented hiring surge, with nearly 3 million restaurant employees returning to payrolls in May and June. However, that still left staffing levels more than 3 million jobs below its February peak.
Although restaurant employment continued to trend higher in July and August, the gains were only enough to put a modest dent in the staffing shortfall. Eating and drinking places* added a net 133,600 jobs in August on a seasonally-adjusted basis, which followed a net increase of 525,300 jobs in July, according to preliminary data from the Bureau of Labor Statistics (BLS).
As a result of the recent slowdown, eating and drinking place employment remains nearly 2.5 million jobs below its pre-coronavirus peak.
September staffing plans are mixed
Staffing decisions have never been more difficult for restaurant operators, as they have to weigh uneven customer traffic in a challenging economy, a waning outdoor dining season in parts of the country, and the potential for renewed on-premises dining restrictions if COVID-19 case levels begin to rise.
These uncertainties were reflected in restaurant operators’ responses to a survey fielded August 26 - September 1 by the National Restaurant Association. When asked about their staffing plans over the next 30 days, fullservice operators were split: 26% said they plan to add employees and 25% said they plan to lay off or furlough employees.
The staffing outlook was only slightly more optimistic in the three limited-service segments – quickservice, fast casual, and coffee and snack concepts. Thirty-three percent of limited-service operators plan to add employees over the next 30 days, while 14% expect to cut staffing levels.
To be sure, some growth is certainly better than no growth. However, the current trendlines suggest that if business conditions do not improve, the restaurant industry’s employment recovery is in danger of stalling.
[It’s important to note that the BLS monthly employment reports count jobs during the payroll period that includes the 12th of each month. Changes in restaurant staffing levels – both negative and positive – have occurred rapidly during the coronavirus pandemic, as restaurants quickly adjust their operating status in response to evolving regulatory and economic conditions. As a result, significant changes likely occurred during the weeks between each measurement period, and the monthly data may not fully capture the total job losses experienced during the coronavirus lockdowns. Based on surveys of restaurant operators, the National Restaurant Association estimates that more than 8 million eating and drinking place employees were laid off or furloughed during the peak of the lockdowns.]
*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.