Restaurant Jobs Are Up

However, more than half of operators say they’ll lay off employees this year if the economy deteriorates.

January 16, 2023

ALEXANDRIA, Va.—Restaurants have been adding jobs for the past 24 consecutive months, according to the National Restaurant Association. December marked the 24th consecutive month of job growth in the restaurant industry, adding a net 26,300 jobs. Overall, eating and drinking places added nearly 2.2 million jobs over the past two years.

However, restaurants are still below pre-pandemic staffing levels by 450,000 jobs or 3.6%, which is the largest employment deficit among all U.S. industries. Overall, 62% of restaurant operators say their location does not have enough employees to support its existing customer demand, according to a survey by the association. The fast casual, family dining and casual dining segments have been hit the hardest.

Eighty-seven percent of operators say they will likely hire additional employees during the next 6-12 months if there are qualified applicants available, and a solid majority of operators say they will expand payrolls if good resumes come across their desk. At the same time, 57% of operators say they would be likely to lay off employees during the next 6-12 months if business conditions deteriorate and the U.S. economy goes into recession.

The U.S. job market is still tight. The U.S. economy added 223,000 nonfarm jobs during December, and the unemployment rate fell to 3.5%. Leisure and hospitality was one of the industries that benefited from job gains.

“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size,” ADP’s chief economist, Nela Richardson, told CNBC. “Business segments that hired aggressively in the first half of 2022 have slowed hiring and, in some cases, cut jobs in the last month of the year.”

Federal Chairman Jerome Powell recently said that price trends for services, not including housing, reflect inflationary pressures in the broader economy and were important when gauging inflation’s future path.

“Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category,” he said in a recent speech.

There are still about 1.7 job openings for every available worker, according to CNBC, which has led to wage hikes, as companies are paying their workers to stay. Wages for workers who stayed in their roles were up 5.5% in November year over year, according to the Federal Reserve Bank of Atlanta, up from 3.7% in January 2022 and the highest increase in 25 years.

Job seekers in retail and leisure and hospitality can easily find jobs that offer more pay, making it enticing to switch, Layla O’Kane, senior economist at Lightcast, told the Wall Street Journal.

Companies are also incentivizing employees to stay for their first 90 days on the job, which executives and human resource specialists say is key to long-term retention. Other companies believe innovative scheduling is the key. One Chick-fil-A in Miami has been using a three-day workweek to recruit and retain employees, and it’s working. Fast-casual restaurant chain Dig is testing a four-day workweek with its full-time staff.

The U.S. convenience store industry employs an estimated 2.38 million people, and convenience store jobs score high marks, according to former employees and customers. Nearly three in four consumers (72%) say they have a favorable opinion of convenience store jobs, while 79% of current and former c-store workers say their job experience was valuable, and 66% said they would recommend that type of work to others, particularly as a first job.

NACS has partnered with The Good Jobs Institute on how c-store operators can provide “good jobs,” which meet people’s basic needs and offer conditions for engagement and motivation. The Good Jobs Calculator, designed exclusively for NACS members and the convenience industry, allows retailers to use their own data and customized assumptions about the amount of improvement or uplift achievable, enabling executives to run scenarios on the bottom-line impact of a Good Jobs system.