The War for Talent Rears its Head Again
By Bob Gershberg, CEO/Managing Partner, Wray Executive Search
As the country gets vaccinated and the light at the end of the tunnel shines brightly for the economy and the restaurant industry, a challenge we have become all too familiar with has returned with a bang. Strengthened by the additional fiscal stimulus, the economy is projected to expand at a steady pace in 2021. Real GDP will grow at annualized rates of at least 5-6% during each quarter of 2021 – the first such occurrence during a calendar year since 1983.
Prior to the coronavirus pandemic, the U.S. economy was experiencing its longest expansion on record. More than 22.8 million jobs were added during the 10-year period ending February 2020, and the unemployment rate hovered near half century lows, according to data from the Bureau of Labor Statistics. The war for talent was raging. When the economy shed nearly 22.4 million jobs in March and April, it wiped out most of the gains of the previous 10 years. Although 12.3 million jobs were added back to payrolls during the final 8 months of 2020, the economy still finished the year more than 10 million jobs below pre-pandemic levels.
When the pandemic hit, 7.7 million jobs were lost in the hospitality industry, according to April estimates—a staggering and inconceivable number. Since that time, the Bureau of Labor Statistics has indicated an incremental increase in job creation adding back 4.5 million over the last 5 months. However, employment is still down 3.6 million (58%) below where it was in February according to restaurant.org. With nearly half of the jobs still lost, additional studies suggest that only 28.4% of restaurant operators are employing 80-100% of their pre-COVID employees. Simply put, the restaurant industry is uniquely affected by these unemployment statistics, as well as other compelling dynamics.
The influences that made staffing challenging pre-COVID-19, as defined by the war for talent or talent crisis, have not disappeared just because there are more workers to choose from. In fact, it is more challenging than ever. The Bureau of Labor Statistics projects 14% growth for “food and beverage serving and related workers,” and the restaurant industry is poised for a 6% growth over the next decade. While these numbers are high, the turnover rate is at a staggering 75%. According to The Bureau of Labor Statistics, the restaurant industry will need somewhere around 150,000 more cooks by 2026 than we have in today’s market.
In the past, a manager had the teen workforce at their disposal, but the number of teens in the labor force is predicted to drop by 660,000 over the next decade. Thanks to internet culture, teens are focused on entrepreneurial efforts and are eying volunteer opportunities and community service gigs that look good on college resumes.
Another challenge to the hiring pipeline is the slowdown of immigration entry. It is no secret that a huge percentage of restaurant workers are foreign-born, and the cap on the number of HB-2 visas approved equates to longer lines.
A few ways to enhance retention at the staff level:
- Hire the right people. The “warm body” syndrome never works
- Be competitive with compensation
- Prioritize training and remember it is a constant
- Cultivate relationships with your people. Take time to get to know them, and encourage your managers to do the same
- Foster their well-being; physical, financial, and emotional health
- Align your people around a shared vision and values.
Be well! Stay safe!
All the best,
Bob Gershberg |CEO|Managing Partner|
(888) 875-9993 ext. 102
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