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Since 2007, Black Box Intelligence (formerly TDn2K)’s (Transforming Data into Knowledge) Workforce Intelligence (formerly People Report) has produced the Workforce Index, a barometer of leading employment measures for the coming quarter. Key labor indicators for this most recent index include:
— 79 percent of companies reported an increase in hourly recruiting difficulty in Q3, with no companies reporting a decrease
— In Q3, vacancies at the hourly level increased for 60 percent of companies, up from 45 percent in Q2
— Turnover rates at the hourly level rose for 50 percent of all companies
— 31 percent of companies reported increasing management turnover rates
The Workforce Intelligence (formerly People Report) Workforce Index is comprised of five components: employment levels, recruiting difficulty, job vacancies, employment expectations and turnover. Each of these components are ranked with their own indices, which primarily measure acceleration. A score over 50 indicates an increase from the previous period and increasing difficulty for operators.
The message from the Q4 index is clear: the labor market continues to tighten. Recruiting remains one of the biggest problems facing the industry today. For Q4, the recruitment index experienced the biggest jump ever measured at 88.9, which is a whopping 10.3 point increase over Q3. Additionally, the job vacancies index also experienced a substantial increase to 76.2, up 5.1 points from Q3. These recruitment difficulties paired with the increasing number of job vacancies portends a painful cycle for the industry.
Research from the U.S. Bureau of Labor Statistics shows that during the past decade, the labor participation rate for young people has declined significantly (as shown in the chart above). From 2000 to 2010, the labor participation rate for youth aged 16 to 19 years dropped roughly 15 percent. Because the food service industry has relied heavily on this age demographic for labor, restaurant operators are currently faced with a smaller pool of teens, while still in need of increasing staff to meet consumer demands. Therefore, the number of job vacancies is higher than ever.
Looking forward, operators must focus on tackling these recruitment and staffing challenges with an employee value proposition that includes flexible scheduling, best in class training and development platforms, competitive compensation and benefits packages, and real, open communication with managers and the company. In the face of political and grassroots efforts to raise minimum wage and seek union representation, employers need to understand exactly what potential employees are looking for. Previous Black Box Intelligence (formerly TDn2K) research has also shown that company culture is now more important than ever. Purpose matters to millennials.
— Joni Thomas Doolin (@luckypenny) September 10, 2015