Washington Restaurant Magazine August 2015

Washington Restaurant Association 510 Plum Street SE, Suite 200 Olympia, WA 98501-1587

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Inside

www.warestaurant.org

Features

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Riding the churn

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Restaurant industry 2015: Workforce trends

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Profile of Washington’s workforce by position

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Food trucks: More than just a trend

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The big three: What keeps Washington state’s HR managers up at night.

Other stories 6

WRA President and CEO: Restaurants provide pathway to the American Dream

7

News Briefs

9

Lex on Tech: Mobile apps simplifying restaurant and bar staff duties

10

Government Affairs Report: Session ends, local issues heat up

24

Resources to initiate successful employment

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Ask the Expert: Develop and retain your staff

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On the cover Workforce trends are always on restaurant operators’ minds as they plan for the future. From attracting employees, in a tight labor market, to managing employee turnover, you need to know the latest developments and how to deal with them.

Washington Restaurant Magazine’s Workforce Mega Trends issue provides you with an essential window into these important issues that directly affect your bottom line.

August 2015 | 5

WRA President and CEO EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Managing Editor, Paul Schlienz Contributing Editor, Andy Cook Contributing Editor, David Faro Contributing Editor, Stephanie Davenport Contributing Editor, Marianne Scholl Research Editor, Sheryl Jackson Art Director, Lisa Ellefson WRA EXECUTIVE COMMITTEE Chair, Phil Costello Stop n’ Go Family Drive In Vice Chair, Chad Mackay El Gaucho Hospitality Secretary/Treasurer, Mark Chriest Oki Developments, Inc. Immediate Past Chair, Jim Rowe Consolidated Restaurants WRAEF President, Gary Sutter Northern Quest Resort & Casino WRA EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Petrina Director of Business Development, Ken Wells Director of Communications & Technology, Lex Nepomuceno Director of Education, Lyle Hildahl Director of Government Affairs, Bruce Beckett Director of Internal Operations, Bekah Cardwell 510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org

Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification.

Reproduction of articles appearing in Washington Restaurant Magazine are authorized for personal use only, with credit given to Washington Restaurant Magazine and/or the Washington Restaurant Association.

Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, its Board of Directors, staff or members.

Products and services advertised in Washington Restaurant Magazine are not necessarily endorsed by the WRA, and do not necessarily reflect the opinions of the WRA, its Board of Directors, staff or members.

ADVERTISING INQUIRIES MAY BE DIRECTED TO: Scott Randall Allied Relations Manager 206.790.5922 scottr@warestaurant.org Washington Restaurant Magazine is published monthly for Association members. We welcome your comments and suggestions. email: news@warestaurant.org, phone: 800.225.7166. Circulation: 6,310.

6 | |warestaurant.org warestaurant.org

Restaurants provide pathway to the American Dream

By Anthony Anton, president and CEO I love my job because I firmly believe that our industry continues to provide the American Dream. Some really good news about our industry has just come through that supports this idea. The WRA’s Education Foundation application for federal Resources to Initiate Successful Employment (RISE) grant was accepted.

This grant is a win-win-win in so many ways. It will help provide employers with needed, trained workers. It will establish portable training services for the industry and our employees. It will provide those on assistance an opportunity to establish their career. It will provide relief to government by decreasing assistance needs. And it can help the industry remind the public of how restaurants are cornerstone employers in our communities and state.

This idea was generated when the WRA was preparing for the Seattle minimum wage debate; we held focus groups with industry leaders about what was important to preserve in the pending negotiations. We learned that restaurateurs wanted to show how employees in our industry start at minimum wage and climb a career ladder to become professionals.

At that time, Seattle voters were collectively convinced that while there was a career ladder when they got their first minimum wage job, it no longer existed.

They believed that people were stuck on the first rung and were not growing professionally as first jobs allowed people to do in the past.

Meanwhile, we were meeting with quick service restaurateurs who were clearly very proud of their role as a starting point for Seattle’s workforce. Each owner told recent stories of employees who started working for them at minimum wage and moved on to more success, either in their company, in school or with another employer. These stories weren’t spin. You could feel the passion they felt as providers of the first rung in a career ladder towards a living income.

On the other end of the spectrum, the higher-priced full service restaurants were adamant that they were not an industry of starting jobs, but rather that they were career employers. Their kitchen leads were earning in excess of $50,000 annually and their bartenders and servers were pulling down $80,000 year in tips and wages combined. They are offering great jobs.

The public has been seeing careers in our industry through a static snapshot and not understanding the true dynamic interplay of 15,000 restaurants statewide that provide 220,000 jobs. With this grant we can make our industry career ladder visible again.

We can take classrooms of 30 people at a time, and job by job, provide training, opportunity and guidance and move them from minimum wage to a family supporting income of $50,000 in five years – IF they supply the hard work, passion, effort and hospitality.

Roll-out of the grant starts in Pierce County. If you are interested in helping with this project, we would love the help. Join great employers, like Farrelli’s Pizza, Hop Jack’s and Jack-in-the-Box, in showing the public the great industry that we are. Learn more about the RISE grant and how to get involved on page 24. 

Primary Source of Information | News Briefs FDA menu labeling regulation pushed back one year The Food and Drug Administration pushed the effective date for the federal menu-labeling regulation for chain restaurants and similar foodservice establishments to Dec. 1, 2016. The FDA had originally set Dec. 1, 2015, as the compliance date, but said it is extending the compliance date in response to requests and to further clarify the rule’s requirements.

consent at any time through any reasonable means, including verbally.

Previously, revocation of consent had to be written. For more information, visit wra.cc/0815a. 

The National Restaurant Association has long supported a nationwide, uniform menu-labeling standard for chain restaurants that provides flexibility for restaurants and preempts a patchwork of state and local laws. As the FDA prepares additional guidance on the law, we continue to work with it to address issues of concern to restaurants and ensure a smooth transition for businesses and consumers alike.  U.S. Rep. Kilmer helps launch Hospitality Caucus in Congress U.S. Reps. Derek Kilmer, D-Wash., and Sean Duffy, R-Wisc., launched the Hospitality Caucus. The goal of the caucus is to provide a better understanding of the challenges faced by our hospitality industry on a national level. Additionally, the caucus will increase recognition for the steps our industry has taken to promote responsible consumption. The caucus will also focus on the positive impact of the American hospitality industry on the United States economy. “Every day entrepreneurs are developing new recipes and creating jobs in our region,” said Kilmer. “This caucus will highlight how the hospitality industry brings people together and keeps our economy moving.”  Restaurants need clarity on telephone communication regulations Complying with the Federal Communication Commission’s (FCC) telephone communication regulations is about to get much more difficult.

Earlier in 2015, the National Restaurant Association joined with the US Chamber and other groups calling for the FCC to provide clarity on how the Telephone Consumer Protection Act (TCPA) treats the kind of non-telemarketing communications that restaurants and other businesses use to provide information to customers. Unfortunately, in a public meeting on June 18, the FCC instead adopted a proposal that will make it harder for companies to comply with TCPA and easier for your company to be sued when using text messaging or informational phone calls.

With regard to the scope of an automatic telephone dialing system, the FCC declined to provide a bright-line definition of “autodialer” except to clarify that rotary phones are not autodialers and that equipment used to send Internetto-phone texts are autodialers. According to the FCC. consumers may revoke

Attorney general issues guideline on service charges Nearly every week, the WRA covers in detail an aspect of implementation of the Seattle minimum wage. Service charges and how they are applied is one of the most confusing elements of the ordinance. This stems from the fact that there are laws at each level of government: federal, state and local. The Washington State Attorney General’s Office (AG) has examined how the local ordinance interfaces with the state requirements and released a set of guidelines. According to the AG, “The guidelines make clear that, in general, businesses can legally add such surcharges as a way to cover their costs, but must do so in a way that is not unfair or deceptive.”

Thus far, it seems as if the state law and the city ordinance do not conflict.

Restaurants should make sure to read all of the information provided by both the WRA and the AG to ensure compliance. If you have any questions about applying service charges to meet the minimum wage standards in Seattle, please contact the WRA at 800.986.7279, or obtain legal advice.

The WRA can also recommend a lawyer for you.  August 2015 | 7

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Lex on Tech

Mobile apps simplifying restaurant and bar staff duties

By Lex Nepomuceno, executive editor

Placing food and bar orders though suppliers has traditionally been a manual process that involved going though old paperwork and placing orders over the phone or through a sales representative. Although not particularly efficient or cost effective, the “old way” has been an essential step in restaurant operations since the beginning.

However, more and more companies are beginning to employ new strategies for food and bar ordering that aim to make life easier for restaurateurs.

We will be taking a look at two mobile applications that specifically focus on making food and beverage ordering easy and convenient. The first application is TapWiser from Anheuser-Busch InBev (AB InBev), which allows bar managers and owners to place AB InBev beverage orders on the fly without a need for their sales rep. The second application is Star Solutions Mobile from Food Services of America, which allows restaurateurs to do a number of important tasks related to managing their regular food orders through the company.

Available on both iOS and Android platforms, the TapWiser app is AB InBev’s wholesale business-to-business (B2B) portal for on premise retailers (bars, restaurants, hotels, concert venues, etc.). The app makes placing orders faster and easier. And with innovative features beyond ordering, TapWiser empowers managers to simplify and automate a typically mundane process.

TapWiser compliments existing relationships with sales reps, wholesaler and AB InBev, bringing beer ordering into the mobile age–all through existing wholesaler accounts.

Features include: Browse and search for all AB InBev beers Order history for fast restocking Same great pricing and discounts Use of existing wholesaler account for login and payment “Regulars” section knows what you order most

Local sales trends Order analytics Videos Beer cocktail recipes Special promotions Specifically, TapWiser 3.0 currently allows users in Seattle and New York City to download the app and register themselves. No need to wait for your sales rep visit.

Everything can also be accessed through the Web-based TapWiser Portal, which allows access all the TapWiser App features, and allows establishments to pay for your outstanding invoices online.

Available on iOS, Android and Windows Phone, FSA Star Solutions Mobile brings the power of mobile order management conveniently and vibrantly into the hands of restaurateurs and distributors.

Star Solutions Mobile by Food Services of America is a simple, yet powerful app which gives restaurants the freedom to do their own online product ordering from their mobile device. Anytime. Anywhere.

Managers and owners can place orders on the go, as well as create orders on the fly. Users can also update orders, check orders history and access to critical account information.

Other key features: Instant access to key item information Items can be filtered by brands Category, classes, new items and previous orders Access nutritional information Smartphone app to scan the bar code on an item in your inventory to place in your order No big client downloads onto the computer No firewall issues TapWiser and Star Solutions are just two examples of companies on the cutting edge. More and more vendors are utilizing the mobile platform to better serve their restaurant members. Stay tuned!  August 2015 | 9

Government Affairs Report: Session ends, local issues heat up

By Stephanie Davenport, contributing editor, and Paul Schlienz, managing editor

The Washington State Legislature finally adjourned on Friday, July 10, after what was officially the longest session in our state’s history at 176 straight days. There were surprising last minute maneuvers that extended the session.

the hard work of your Government Affairs team:

Despite the passage of the 2015-17 operating budget several days earlier, the Legislature did not Sine Die due to an unexpected vote by Senate Democrats early on the morning of July 1, which put the operating budget in jeopardy.

Please look forward to a full Legislative Review edition of Washington Restaurant Magazine to arrive in your mailboxes in September. In this edition, the WRA Government Affairs team will cover, in detail, the highs and lows of the session and important legislation that passed and failed. If you have any questions about the 2015 Legislative Session, please email the WRA’s Government Affairs Director Bruce Beckett at BruceB@warestaurant.org.

Senate Democrats, despite an agreement, withheld votes on legislation that would have suspended I-1351, a class-size reduction initiative. The bill that prolonged everything, had already passed the House with bipartisan support.

Thirty-three votes were needed to pass it out of the Senate, which required some Senate Democrats to vote for it. The practical effect of this measure not passing was that it put the state on a course where the operating budget would eventually be out of balance by $2 billion. The Legislature is unable to adjourn without a balanced budget.

A budget restaurants can support Fortunately, Senate Democrats and Republicans were ultimately able to resolve their differences. Despite this large speed bump, lawmakers finished and passed the bills necessary to implement the budget with no additional surprises and minimal tax measures.

This budget of more than $38 billion represents the largest increase in spending in our state’s history, including $200.5 million worth of tax preferences that ended, resulting in modest tax increases for some industries. However, there is much to like in the budget that finally passed. Because of 10 | warestaurant.org

$1.5 billion in proposed new taxes were defeated; A proposed capital gains tax was defeated; A proposed 20 percent increase in service B&O rates was defeated; and

A proposed street utility tax was defeated, among other positive features of this budget.

Paid leave as a precursor to minimum wage increases WRA members are impacted by new wage and labor laws that are being introduced at the local level in a rolling, city-by-city basis. Looking at the trend, local paid leave ordinances can be considered precursors to minimum wage ordinances or increase proposals.

Seattle, and recently, Tacoma, have now followed this movement as you can read below. Concerns have arisen in Spokane, as the city has recently concluded work by a taskforce on paid leave. The first rumblings of introducing paid leave options have begun in Bellingham. As a result, WRA continues to advocate for our members on the local level in greater and greater ways.

Tacoma In July, the Tacoma City Council accepted an initiative on minimum wage introduced by Mayor Marilyn Strickland. This comes after the mayor received recommendations from the stakeholder process she convened in May to develop an

alternate option to the $15 per hour initiative that will appear on Tacoma’s November ballot.

During the stakeholder process, the WRA worked closely with Tacoma area members, and the Tacoma-Pierce County Chamber, to find options that supported restaurants as much as possible. The final hearing was lengthy and went well into the night. Most were surprised that there was more testimony from local businesses than by $15 Now campaigners or union promoters. In the end, the Council voted down two amendments and opted to support the mayor’s proposal without any changes. Ultimately, the mayor’s proposal would:

Require employers to pay a minimum hourly wage

to employees aged 16 and older performing work in Tacoma of not less than $10.35 per hour, beginning in February 2016; Increase the minimum wage to $11.15, beginning in January 2017; Increase the minimum wage again to $12, beginning in January 2018; and Thereafter be adjusted annually based on the Consumer Price Index.

The WRA Government Affairs team and local Tacoma restaurateurs have worked tirelessly through this process and succeeded in getting a true alternative. However, the next step in this process includes a very complicated ballot title. Both $15 Now’s proposal and this alternative will be options in November. The WRA is now focusing on education opportunities in the city in order to help voters understand what the ballot initiative will mean to them.

Spokane Recently the Spokane City Council received the report from the Earned Sick and Safe Leave Task Force (on which the WRA served). While nothing has been finalized, the report does outline the general concepts that are likely to be adopted for the city.

The WRA provided extensive comments to the Council. We are happy that the Council appears to have incorporated many of our ideas. The WRA’s goal on the task force was to provide businesses with a number of options to meet the requirements for providing paid sick leave. It appears the Council is responding. The recommendations in their framework document include:

Allow paid-time off policies; Allow shift swapping; Let accrual at one hour per 40 hours worked (up from

Allow up to 40 hours to be carried over, but the annual cap would only allow you to use 40 hours in a calendar year, so rollover hours do not impact the cap.

Nevertheless, the framework does not include information on funding, enforcement or private rights of action, which is of key concern to all businesses in Spokane. The WRA is continuing to closely follow the drafting of this ordinance and is providing input along the way.

Bellingham In July, we learned that Bellingham City Councilmember Roxanne Murphy asked the Council to consider paid leave for businesses within the city limits. Although Councilmember Murphy said that this was simply an introduction, we know from experience in the past that local paid leave ordinances tend to pick up traction fast. In response, the WRA sent a letter to Bellingham Mayor Kelli Linville, requesting that she consider creating an opportunity for stakeholder input. Tacoma and Spokane both conducted very different processes for adoption than Seattle when considering new requirements. The resulting ordinances were very different also. Seattle’s ordinance mandates 8.67 paid sick days per year with a max of 13.5 days allowed to be carried over to the next year. Tacoma’s ordinance mandates three paid sick days per year with a max of 40 hours allowed to be carried over to the next year.

Although it’s unclear what will happen in Bellingham, we are monitoring this closely and will be offering our help to city leaders to find solutions and options.

Keep up to date Nearly everything that happens on the local level happens quickly. If you would like to keep up to the minute with what is happening, you can look for our Washington Restaurant Weekly to arrive in your email inbox every Thursday.

If you aren’t getting copies of the Weekly and are a WRA member, you can contact News@warestaurant.org. Additionally, if you have any questions about local government affairs you can contact Stephanie Davenport at StephanieD@warestaurant. org. Our mission is to make you a success! 

one hour per 30);

Allow an annual cap of 40 hours to be taken; and August 2015 | 11

f cE Riding the churn

By David Faro and Marianne Scholl, contributing editors

The lure of greener pastures is simply a fact of life for hiring managers in the hospitality industry.

It’s a typical scene. A manager sits across the table from a witty kid with a lot of great serving experience, in six cities, stretching from Boston to San Diego. The executive chef looks over the resumé of a sharp line cook. She has experience points from across the country. She has worked in some of the finest resort towns, surf breaks, ski-hills and kitchens in America. She likes to move.

Hospitality work has always appealed to a roaming crowd.

If you are looking for a nomadic tribe within American culture that transcends race, gender and creed, look no further than your nearest restaurant. High turnover, AKA the “churn,” is nothing new. It’s always been a powerful variable in the hospitality equation. Ask that executive chef.

He’ll tell you that as he listens to the entertaining young woman, he tries to get a read. The manager sees a person who has not worked at the same restaurant for longer than 14 months. The kid has chops, but she doesn’t stay long.

Now it’s a crapshoot. She may be gone in three months. Or she is telling the truth and really is settling down. Either way, in Washington’s increasingly tight labor market he might just have to take a chance on her. Candidates for entry-level positions are hard to foster, and even harder to retain.

Blair Taylor, who heads Starbucks’ corporate-responsibility efforts, said that by helping high-school students enter the job market, and they number about 7 million kids, companies are helping themselves.

“They are needed as part of our labor pool,” Taylor said in an interview with The Seattle Times. “We won’t be able to fill the jobs we have unless we have them properly engaged.”

As the economy has improved, the churn has returned in full force. Way back in 2010, when Washington state’s unemployment rate was 8.5 percent, and the country as a whole was just shy of 10 percent unemployment, even would-be adventurers were staying put, happy to just have a job. Now that the state is at 5.3 percent unemployment as of May this year, and the Seattle area is down to a remarkable 12 | warestaurant.org

3.7 percent, employees are back on the move.

Hospitality businesses are clamoring for skilled labor, and in this improving economy, Millennials, who now make up one third of the American workforce, have turned the churn into a whole new beast.

Demographers peg Millennials as anyone ages 18 to 34, and cultural observers will tell you that they are digital natives who march to the beat of a different drum than their Boomer or Gen X parents. HR professionals find they have a different relationship to authority, a strong commitment to putting life before work and a low tolerance for boredom.

Millennials may not be characterized as globetrotters, but a recent study by the consulting firm Millennial Branding found that 58 percent expected to stay in their current jobs less than three years. In that same study, 53 percent of managers said it was difficult to find and retain reliable Millennial staff.

Churn may be a part of doing business, but savvy employers do their best to slow it down. For Janyce Volodkevich, regional director of people and culture for Kimpton Hotels and Restaurants, that means focusing on successfully onboarding new staff in the first 30 days, and making them feel welcome and engaged so they’ll stick around.

She’s also brought in coaches to train her management staff on working with a multi-generational workforce.

“One of the takeaways has been that Millennials get bored very easily and have to be inspired and motivated in a different way than other generations in the workforce,” she says.

Then there is Generation Z, the most common term for the newest workers to enter the labor pool: today’s teens.

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Hospitality businesses are clamoring for skilled labor, and in this improving economy, Millennials, who now make up one third of the American workforce, have turned the churn into a whole new beast.

They’re still too young to have many pundits writing about them, and quick service managers just may be the experts on their entry into the workforce. These managers are often the people who give kids their first real chance at being gainfully employed. Of course, their reliance on young workers brings all the inherent risks commonly associated with teenagers. The quality of work and retention rates can bounce around unpredictably.

Quick service understands the churn close up and personal. It sees the whites of its eyes.

So how do you shift from trying to defeat the churn, to dancing with it? How do you surf with it, harness it and make it work in your favor? What are you doing to keep workers and staff-up at the right times while leaving enough room for the drifting prodigy to come in and grace your presence when the time is right for her.

There is a kitchen, in Chicago, which used to leave two positions open for travelers. There was a feeder youth hostel about four blocks away. They advertised for the positions only in Europe. They never had a shortage of labor. Their model included the churn as a participatory factor. It also made their kitchen a really interesting place.

You don’t have to go that far to incorporate the churn into your model. The first step, however, is accepting it. The second step is doing something about it.

If skilled entry-level labor is an issue for you, contact the WRA Education Foundation, and connect with a ProStart school. Focused students considering careers in Hospitality are looking for a place in your kitchen. They have a two-year

certificate of achievement, and at www.wraef.org, you can see the level of expertise that a ProStart graduate brings to the table.

ProStart is not just for cooks.

Its management development curriculum trains students in many key aspects of FOH operations. ProStart students www.wraef.org are ready to get started moving up the hospitality career ladder.

Consolidar is also another great source for hospitality labor.

A nonprofit organization cofounded by Edgar Martinez, Consolidar focuses on helping employers recruit from the Hispanic community, and on helping job seekers acquire the cultural, language and job-related skills they need to succeed.

The churn is never going to stop. It’s simply an aspect of the industry. The trick is connecting managers with programs like these so that entry-level positions are filled with workers who have already established their interest in a hospitality career.

And as you try to get a handle on Millenials and postMillenials, know that culinary celebrities are front and center in their cultural life. Anthony Bourdain is a rockstar.

He is also a traveler. He is also a chef. He is a role model to the newest wave of workers. The kids coming into your kitchen these days? Many want to be him. He rides the churn like a bucking bronco.

So you must learn to do that, too.

For more information on the WRA Education Foundation’s career development and training opportunities, please visit www.wraef.org or call WRA at 360.956.7279.

August 2015 | 13

f cE Restaurant Industry 2015:

Workforce Trends 2014 marked the third consecutive year in which 2014 marked eating-andthe third drinking-place job growth consecutive topped 3 year in which percent, the eating-andfirst such drinking-place occurrence job growth since the 199395 period. topped 3 percent, the first such occurrence since the 1993 to 1995 period.

RESTAURANT JOB GROWTH WILL CONTINUE, WHILE THE COMPOSITION OF THE WORKFORCE EVOLVES The restaurant industry continues to be a driving force behind the nation’s recovery from the Great Recession, as industry job growth outstripped the overall economy for the 15th consecutive year in 2014. Eating and drinking places, the primary component of the restaurant industry accounting for three-fourths of the total restaurant and foodservice workforce, added jobs at a solid 3.5 percent rate in 2014, more than a full percentage point above the 1.9 percent gain in total U.S. employment.

Restaurant Industry 2015:

Workforce Trends

The 2014 gain marked the third consecutive year in which eating-and-drinking-place job growth topped 3 percent, the first such occurrence since the 1993-95 period. By outpacing the overall economy in each of the last 15 years, the eating-and-drinking-place sector saw its employment level JOB jump GROWTH by more thanWILL 34 percent.

In contrast, the total number of jobs in RESTAURANT CONTINUE, WHILE THE the economy rose by justTHE 8 percent during the last 15 years.

COMPOSITION OF WORKFORCE EVOLVES The restaurant industry continues to be a driving force behind the nation’s recovery from the

Job growth was as generally across segments 2014, with the15th snack-andGreat Recession, industry broad-based job growth outstripped the overallineconomy for the consecutive nonalcoholic-beverage-bar segment the component strongest gainers.

This segment year in 2014. Eating and drinking places, among the primary of the restaurant industry— which includes like coffee, and ice shops — posted job jobs growth accountingconcepts for three-fourths of thedoughnut total restaurant andcream foodservice workforce, added at a of more than 5 percent for the thirdmore consecutive in 2014. solid 3.5 percent rate in 2014, than a fullyear percentage point above the 1.9 percent gain in total U.S. employment.

TheThe quickservice segment job growth more than 3.5 percent for the 2014 gain marked the registered third consecutive year in of which eating-and-drinking-place job third consecutive while the thefirst tableservice segment also theperiod. overall growth toppedyear, 3 percent, such occurrence since theoutpaced 1993 to 1995 Byeconomy outpacing in 2014. the overall economy in each of the last 15 years, the eating-and-drinking-place sector saw its

Looking forward, theby NRA expects drinkingtheplaces to add of jobs atina the 3.4 percent employment level jump more than 34eating percent.and In contrast, total number jobs rate in 2015, more a full percentage point economy rose by just than 8 percent during the last 15 years.above the projected 2.3 percent gain in total U.S.Job employment.

The projected 2015 increase will in represent the consecutive year growth was generally broad-based across segments 2014, with thefourth snack-and-nonalcoin which the restaurant registered growth at least—3which percent, a streak that last holic-beverage-bar segmentindustry among the strongest job gainers.

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Meanwhile, the overall economy hasn’t posted jobfor growth concepts likeincoffee, doughnut and ice cream shops — posted job growth above 5 percent the of 3 percent since 1994. third consecutive year in 2014.

The quickservice segment registered job growth above 3.5 percent for the third consecutive

Restaurant Industry to Outpace Total U.S. Job Growth for 16th Consecutive Yeartotal U.S. job growth for 16th consecutive year Restaurant industry to outpace Annual Eating andand drinking places versus totaltotal U.S. U.S. employment Annualjob jobgrowth: growth: Eating drinking places versus employment 3.9% 3.5%

3.5%

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1.9%

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2010

2011

Total U.S. employment

14 | warestaurant.org

2012

2013

2014

Eating-and-drinking-place employment

Source: Bureau of Labor Statistics, National Restaurant Association projections

*Projected

2015*

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Teens Represent Shrinking Proportion Composition of the U.S. labor force Composition of the U.S. labor force restaurant workforce participation rates of the Restaurant restaurant Workforce workforce participation rates

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Age group 2007 2013 2007 Trends in key labor 2013 Age group 2007indicators: 20132007 to 2007

2013 2013

Number of people in the Number of people in the U.S. labor force (millions) U.S. labor force (millions) 2007 2013 2007 2013

16 to 19 20.9% 16.5% 16 to 19 20.9% 16.5% Composition of the 20 to 24 21.4% 24.4% restaurant workforce 20 to 24 21.4% 24.4% 25 to 34 23.1% 24.5% 25 to 34 23.1% 24.5% Age group 2007 2013 35 to 44 16.1% 14.7% 35 to 44 16.1% 14.7% 45 to 54 11.5% 11.5% 16 to 20.9% 16.5% 45 to 19 54 11.5% 11.5% 55 to 64 5.2% 6.5% 20to to64 24 21.4% 24.4% 55 5.2% 6.5% 65 or older 1.9% 1.9% 25 or to older 34 23.1% 24.5% 65 1.9% 1.9% 35 to 44 16.1% 14.7% Source: Bureau of Labor Statistics

41.3% 34.5% 41.3% 34.5% U.S. labor force 74.4% 70.7% participation70.7% rates 74.4% 83.3% 81.2% 83.3% 81.2% 2007 2013 83.8% 82.2% 83.8% 82.2% 82.0% 79.7% 41.3% 34.5% 82.0% 79.7% 63.8% 64.4% 74.4% 70.7% 63.8% 64.4% 16.0% 18.7% 83.3% 81.2% 16.0% 18.7% 83.8% 82.2%

Source: Bureau of Labor Statistics

45 to 54

11.5%

11.5%

82.0%

79.7%

35.7

34.5

55 to 64

5.2%

6.5%

63.8%

64.4%

20.8

25.1

SHIFTING 65 or older

7.0 5.8 7.0 of people 5.8 Number in the 15.2 15.6 U.S. labor force (millions) 15.2 15.6 33.1 33.7 33.1 33.7 2007 2013 35.5 32.6 35.5 32.6 35.7 34.5 7.0 5.8 35.7 34.5 20.8 25.1 15.2 15.6 20.8 25.1 5.8 8.1 33.1 33.7 5.8 8.1 35.5 32.6

The degree to which recruiting and The degreeto towhich whichrecruiting recruiting and The degree and retaining employees is a challenge to retaining employees is a challenge retaining employees challenge toto The Challenge ofa Finding restaurant operatorsis restaurant operators restaurant operators Little

Little The degree to which recruitingor and Significant Moderate no Moderate or noto retaining Significant employees is a challenge challenge challenge challenge challenge challenge challenge restaurant operators Family dining 16% 31% 53% Family dining 16% 31% 53% Casual dining 23% 36% 40% Little Casual dining 23% 36% 40% Moderate or no Fine diningSignificant 11% 40% 46% Fine dining challenge 11% 40% 46% challenge challenge Quickservice 21% 38% 40% Quickservice 21% 38% 40% Fast casual 37% 39% Family dining 22% 16% 31% 53% Fast casual 22% 37% 39% CasualNational diningRestaurant 23% Association, 36% Restaurant 40% Source: Source: National Restaurant Association, Restaurant Trends Survey, Fine dining2014 11% 40% 46% Trends Survey, 2014

Quickservice 21%

38%

40%

Fastrestaurant casual 22% the workforce37% declined, 39% a

To be sure, the restaurant LABOR DEMOGRAPHICS 1.9% 1.9% 16.0% 18.7% 5.8 industry is8.1 majority of new restaurant jobs Source: National Restaurant Association, Restaurant still the economy’s largest employer The Great Recession and its aftermath workforce.

Bythe 2013, these teens made up went only tion rate plunging from 41.3 percent in 2007 to year, while the tableservice segment also Source: Bureau of Labor Statistics Trends Survey, 2014 workforce.

By 2013, these teens made only tion rate plunging from 41.3 percent in 2007 to year, while the tableservice segment also to Millennials in recent years.

The of teenagers, providing jobs for 1.5 had a significant impact on the U.S. 16.5 percent of restaurant employees. upshare just 34.5 percent in 2013. outpaced the overall economy in 2014.

16.5 percent of restaurant employees. just 34.5 percent in 2013. outpaced the overall economy in 2014. of restaurant jobs held by individuals million individuals between the ages of labor force.

The labor force participation To be sure, the restaurant industry is still the The net effect was a decline of 1.2 million Looking forward, the NRA expects eating To be sure, theemployer restaurant is still the was aforce decline ofone-third 1.22007 million Looking the NRA expects 20-24 rose from 21.4 percent in 2007 16The andnet 19.

Putlabor another way, rate fell toforward, aplaces 35-year low, with economy’s largest ofindustry teenagers, teenagers ineffect the between and and drinking to add jobs at amany 3.4eating percent economy’s largest employer of teenagers, teenagers in the labor force between 2007 and and drinking places to add jobs at a 3.4 percent to 24.4 percent in 2013, while 25 to of all working teenagers in the U.S. are people who lost jobs deciding not to providing jobs for 1.5 million individuals 34 2013, a development that was reflected in the rate in 2015, more than a full percentage point workforce.jobs By 2013, these teens made tion rate plunging from 41.3 percent inin 2007 to year,inwhile the tableservice segment alsopoint providing for million individuals 2013, a development that was reflected the rate 2015, more than a full percentage year-olds also took larger roleupinonly the employed in a restaurant.

However, return to the workforce.

Contributing to between the ages of1.5 16on anda 19.

Put another way, restaurant workforce. In 2007, 16- to 19-yearabove the projected 2.3 percent gain in total U.S. 16.5 percent of restaurant employees. just 34.5 percent in 2013. outpaced the overall economy in 2014. between the ages of 16 and 19.

Put another restaurant workforce.

In 2007, 16to 19-yearabove the projected 2.3 percent gain in total U.S. restaurant workforce. the shrinking teen labor pool has led this decline was the retirement of baby one-third of all working teenagers in the U.S.way, olds represented 20.9 percent of the restaurant employment. The projected 2015 increase will To be sure, restaurant industry is still The net effect20.9 waspercent a decline of 1.2 million Looking forward, the NRA expects eating one-third of all the working teenagers in the U.S. the olds represented of the restaurant employment.

The projected 2015 increase will many restaurant operators to look boomers, as well as a growing proportion represent the fourth consecutive year in which economy’s largest employer of teenagers, teenagers in the labor force between 2007 and and drinking places to add jobs at a 3.4 percent represent the fourth consecutive year which Although older adults still make up to alternative age cohorts to fill their of teenagers choosing to remain on the the restaurant industry registered jobingrowth of jobs for 1.5 million individuals 2013, a development that was reflected in the raterestaurant in 2015, more thanregistered a full percentage point the industry job growth of aproviding relatively small proportion of the staffing needs. sidelines. at least 3 percent, a streak that last happened in Restaurant Labor Productivity Remains Flat between the ages of 16 and 19.were Put another restaurant workforce.

In 2007, 16to 19-yearabove the projected 2.3 percent gain in total U.S. atthe least 3 percent, a streak that last happened in restaurant workforce, they the way, Restaurant Labor Productivity Remains Flat mid-1980s. Meanwhile, the overall economy one-third of all working teenagers in the U.S. olds represented 20.9 percent of the restaurant employment.

The projected 2015 increase will the Meanwhile, overall economy fastest in growing demographic group Although teen representation in strong job growth Asmid-1980s. theposted nation’s second largest private hasn’t job growth ofthe 3 percent since 1994. he restaurant industry registered recent years, despite the fact that the represent the fourth consecutive year in which hasn’t posted job growth 3 percent since 1994. sector employer, theofrestaurant industry he restaurant industry registered strongmodest. job growth in recent years, thelack fact of that the sales environment remained relatively A primary reason hasdespite been the the restaurant industry registered job growth of was directly impacted sales environment remained relatively modest.

A primary reason has been the lack of SHIFTING LABOR by these shifting growth in labor productivity in the restaurant industry. at least 3 percent, a streak that last happened in Restaurant LaborinProductivity Remains Flat SHIFTING LABOR DEMOGRAPHICS labor demographics in recent years. growth in labor productivity the restaurant industry.

The restaurant industry’s labor productivity — defined as output per labor hour — was the mid-1980s. Meanwhile, the overall economy DEMOGRAPHICS The Great Recession aftermath had a Of significant noteand foritsthe restaurant The restaurant industry’s productivity as the output per labor hour — was essentially flat during the lastlabor decade, according— to defined data from Bureau of Labor Statistics. hasn’t posted job growth of 3aftermath percent since 1994. he restaurant industry registered strong jobto growth in recent years, despite theStatistics. fact that the The Great Recession and had a significant impact theitsU.S. labor in force. industry was theon sharp decline theThe essentially flat during the last decade, according data from the Bureau of Labor Between 2003 and 2013, labor productivity in the eating-and-drinking-place sector declined at sales2003 environment remained relatively modest.

A primary reason has been the lack of at significant on the U.S. The labor forceimpact participation rate labor fell toforce. a 35-year teenage labor pool.

Between and 2013, labor productivity in the eating-and-drinking-place sector declined an average annual rate of 0.1 percent. In contrast, labor productivity in the total nonfarm SHIFTING LABOR growth in labor productivity in the restaurant industry. labor participation rate lost fell to a 35-year low, force with many people who jobs deciding an average annual rate of 0.1 percent.

In contrast, labor productivity in the total nonfarm business sector rose at an average annual rate of 1.7 percent during the 10-year period.

DEMOGRAPHICS The restaurant industry’s labor productivity — output per hour — Labor was low, manyin who1970s, lost jobs deciding not to return topeople the workforce.

Contributing At with its peak the late roughly 58to business sector rose at an average annual rate of the 1.7defined percentasduring the 10-year period.

Productivity trends varied somewhat within restaurant industry inlabor recent years.

The Recession and its aftermath had a essentially flat during the last decade, according to data from the Bureau of Labor Statistics. not toGreat return to the Contributing this decline the retirement of baby percent ofwas 16toworkforce.

19-year-olds were in to Productivity trends varied somewhat within the restaurant industry in recent years.

Labor productivity at limited-service eating places, which include quickservice restaurants, snack and significant impact on U.S. labor force. The Between 2003 and 2013, labor productivity in the eating-and-drinking-place sector declined at this theas retirement of baby boomers, well a the growing proportion of thedecline laboraswas force.

This participation rate productivity at limited-service eating places, which include quickservice restaurants, snack nonalcoholic beverage bars, and cafeterias/buffets/grill buffets, rose at an average annual rateand of labor forceaschoosing participation rate fell a 35-year an average annual rate of 0.1 percent.

In contrast, labor productivity in the total nonfarm boomers, well as a50 growing proportion of teenagers to remain onto the sidelines. remained above percent until 2001, nonalcoholic beverage bars, and cafeterias/buffets/grill buffets, rose at an average annual rate of 0.3 percent between 2003 and 2013. During the same 10-year period, labor productivity at low, As with choosing many people wholargest lost deciding business sector rose at an average annual rate of 1.7 percent during the 10-year period. teenagers to remain onjobs the sidelines. nation’s second private sector whenthe it started trending downward.

0.3 percent between 2003 and 2013.

During the same 10-year period, labor productivity at fullservice restaurants declined at an average annual rate of 0.3 percent. not to the return the workforce.

Contributing to Productivity trendsdeclined varied somewhat within the restaurant As nation’s second largest private sector employer, theto restaurant industry was directly The Great Recession exacerbated fullservice restaurants at an average annual rate of 0.3 industry percent. in recent years. Labor this decline the retirement ofdemographics babydirectly Labor Productivity ineating Restaurants Flat restaurants, in Recentsnack Years productivity at limited-service places, whichRemained include quickservice and impacted bywas these labor employer, the restaurant was this decline, withshifting theindustry teen labor force boomers, as wellOf asshifting a growing proportion of Labor inchange Restaurants Flat in Recent nonalcoholic beverage bars, and cafeterias/buffets/grill at an average annualYears rate of in recentby years. significant note for the impacted these labor demographics AverageProductivity annual percent in outputRemained perbuffets, labor rose hour: 2003 to 2013 participation rate plunging from 41.3 teenagers choosing towas remain on the sidelines.

1.7% 0.3 percentannual betweenpercent 2003 and change 2013. During the sameper 10-year period, productivity at restaurant industry the34.5 sharp decline in recent years.

Of significant note for the in Average in output labor hour:labor 2003 to 2013 percent in 2007 to just percent inthe As the nation’s second largest private sector 1.7% fullservice restaurants declined at an average annual rate of 0.3 percent. teenage pool.was the sharp decline in the restaurant industry 2013. labor

T T

T

employer, thepool. restaurant was directly At its peak in the lateindustry 1970s, roughly 58 teenage labor 0.3% Labor Productivity in Restaurants Remained Flat in Recent Years impacted by these shifting labor demographics percent ofeffect 16-intothe 19-year-olds the At its peak late 1970s,were roughly 58 labor The net was a decline of in 1.2 0.3% in recent years.

Of significant note for the Average annual percent change in output per labor hour: 2003 to 2013 force.

This participation rate labor remained -0.1% percent of teenagers 16to 19-year-olds were inforce theabove labor50 million in the -0.3% 1.7% restaurant industry was the sharp decline in the percent 2001, when it started trending force.

Thisuntil participation rate remained above 50 -0.1%drinking Eating and Fullservice Limited-service Total nonfarm between 2007 and 2013, a development -0.3% places restaurants eating places businesses teenage labor pool. downward.

The exacerbated percent until 2001,Great when it started trending Eating and drinking Fullservice Limited-service Total nonfarm that was reflected inRecession the restaurant Atdecline, its peak in the 1970s, roughly 58 places eating places businesses Source: Bureau of Labor Statistics restaurants this with thelate teen force downward.

The Recession 0.3% workforce.

InGreat 2007, 16labor to 19exacerbated year-participapercent of 16to 19-year-olds were in the labor Source: Bureau of Labor Statistics this decline, with the teen forceof participaolds represented 20.9labor percent the force. This participation rate remained above 50 -0.1% -0.3% restaurant workforce. By 2013, these percent until 2001, when it started trending Eating and drinking Fullservice Limited-service Total nonfarm teens made up only 16.5 percent of 20 National Restaurant Association | Restaurant.org/Forecast places restaurants eating places businesses downward. The Great Recession exacerbated restaurant employees.

20 National Restaurant Association | Restaurant.org/Forecast Source: Bureau of Labor Statistics this decline, with the teen labor force participa-

August 2015 | 15 20

National Restaurant Association | Restaurant.org/Forecast

f cE in recent years. In fact, the number Increased focus on recruiting to retain Increased Focus on Recruiting Train Train to Retain areadults employed in aolder restaurant.

However, of 55 or working in thethe and retaining employees Restaurant operators Increased Focus on Recruiting Train to Retain planning to devote are employed in labor a restaurant. the Restaurant operators planning to and Retaining Employees shrinking teen pool hasHowever, led32many restaurant industry jumped percent Restaurant operators’ plans for more or less of their resources toto Restaurant operators planning and Retaining Employees devote more or less of their resources shrinking teen labor pool has to led many restaurant operators look Restaurant operators’ for between 2007 andto 2013, analternative increase age employee recruiting and plans retaining training in 2015 devote moreinor2015 less of their resources to training restaurant to look to alternative age Restaurant plans for cohorts tooperators fillindividuals. their staffing needs. employeeinoperators’ recruiting and retaining of 180,000 This trend resources 2015 to training in 2015 cohorts to fill their staffing needs. in the employee resourcesrecruiting in 2015 and retaining37% 39% Although teen representation is expected to continue in the years 36% 35% 34% resources in 2015 39% Althoughworkforce teen representation in the 37% restaurant declined, a majority of the 31% 36% ahead – as older adults make up a 35% 34% 27% 27% restaurant workforce declined, a majorityin of the 26% 31% new restaurant millennials larger share ofjobs thewent U.S.tolabor force.

27% 27% 26% new restaurant jobsshare wentoftorestaurant millennials in held recent years. The jobs recent years. The20-24 shareand of restaurant jobs held by individuals rose from 21.4 percent LABOR CHALLENGES RETURNING byinindividuals 20-24 and in rose from 21.425percent 2007 to 24.4 percent 2013, while With the economy steadily improvingto in34-year-olds 2007 to 24.4also percent while tookin on2013, a larger role25in to the and the jobless rate trending 34-year-olds also took on a larger role in the restaurant workforce. downward, restaurant operators are restaurant workforce.

Although still makefor up a relatively finding thatolder the adults competition Although olderof adults still make workforce, up a relatively small proportion the restaurant employees is intensifying. The NRA they small of the restaurant workforce, wereproportion therestaurant fastest growing demographic groupthey in asked operators in October were theyears. fastestIngrowing demographic group55inor recent fact, the number of adults 2014 to rate the degree to which recent In fact, therestaurant number of adults 55 or olderyears. working in the industry jumped recruiting and retaining employees is a older working in the restaurant industry jumped of 32 percent between 2007 and 2013, an increase challenge for their business.

32180,000 percentindividuals. between 2007 2013, an increase Thisand trend is expected to of 180,000 individuals.

This trendasisolder expected tomake continue in the years ahead, adults One in five limited-service operators continue in the years ahead, olderforce. adults make up a larger share ofand the U.S.aslabor said recruiting retaining up a larger share of the U.S. labor force.

employees was a significant challenge LABOR CHALLENGES for their business, while twoRETURNING in five LABOR CHALLENGES RETURNING With the economy steadily improving and the described it as a moderate challenge.

With therate economy steadily improving and the jobless trending downward, restaurant A majority of casual and fine-dining jobless rate are trending downward, restaurant for operators finding the competition operators also said that recruiting and operators areisfinding that the competition employees intensifying.

The NRA askedfor retaining employees was a significant employees isoperators intensifying.

The NRA asked restaurant in October 2014 or moderate challenge for their to rate the restaurant in October to rate the degree to operators which recruiting and 2014 retaining business.

degree to which recruitingfor andtheir retaining employees is a challenge business. employees isfive a challenge for theiroperators business.said One in limited-service As a result, restaurant operators across One in five operators said recruiting andlimited-service retainingtoemployees wason a signifall segments intend focus more recruiting and retaining employees was a two significant challenge for their business, while labor issues in 2015. Nearly four in 10 in icant challenge for their business,challenge. while twoAin five described it as a moderate fast-casual operators say they plan to five described it as a and moderate challenge.

A majority of casualfine-dining operators devote more resources to recruiting majority ofrecruiting casual- and fine-dining operators also said and retaining employees and retaining employees in 2015, while also recruitingorand retaining employees wassaid a2significant moderate only percent plan to cut challenge back in for was a significant or moderate challenge for their business. this area. Roughly one in four familytheirAs business. a result, restaurantand operators across all dining, casual-dining quickservice As a result, restaurant operators across all segments intend to focus more on labor operators plan to spend more on issues in segments intend to in focus more on labor issuessay in 2015.

Nearly four 10 fast-casual operators finding and keeping employees in 2015.

Nearly four in 10 fast-casual operators say they plan to devote more resources to recruiting 2015. they to devote more resources to recruiting andplan retaining employees in 2015, while only 2 and retaining employees inin2015, whileRoughly only 2 percent plan to cut back this area.

Restaurant operators also are percent cut back in this area. Roughly one in plan four to family-dining, casual-dining bolstering their training budgets inand an one in four family-dining, casual-dining andon quickservice operators plan to spend more effort to develop their employees as quickservice operators plan to spend more on finding keepingthe employees 2015. well as and enhance overall in productivity finding and keeping employees inbolstering 2015. their Restaurant operators also are of their operation. More than three Restaurant operators also are bolstering their training budgets in an effort to develop their in ten operators across all segments training budgets in an effort to develop their employees as well as enhance the overall productivexpect to devote more of their employees well as enhance the overall productivity of theirasoperation.

Moreinthan three in 10 resources to training 2015, while ityoperators of their operation.

More than threeto indevote 10 across all segments expect fewer than 5 percent expect to cut more operators across all to segments to while devotefewer more of theirtraining resources trainingexpect in 2015, their budget. ofthan their5resources to training 2015, while fewer percent expect to cutintheir training budget. than 5 percent expect to cut their training budget.

16 | warestaurant.org

17% 17% 3% 3%

6% 6%

2% 2%

2% 2%

2% 2%

Family Casual Fine QuickFast dining Casual dining Fine dining Quickservice Fast casual Family dining dining dining service casual Devote more resources in 2015 Devote fewer resources in 2015 Devote more resources in 2015 DevoteNational fewer Restaurant resourcesAssociation, in 2015 Restaurant Source: TrendsNational Survey, 2014 Source: Restaurant Association, Restaurant Trends Survey, 2014

2% 2%

4% 4%

3% 3%

2% 2%

1% 1%

Family Casual Fine QuickFast dining Casual dining Fine dining Quickservice Fast casual Family dining dining dining service casual Devote more resources in 2015 Devote fewer resources in 2015 Devote more resources in 2015 DevoteNational fewer Restaurant resourcesAssociation, in 2015 Restaurant Source: TrendsNational Survey, 2014 Source: Restaurant Association, Restaurant Trends Survey, 2014

RISING JOB OPENINGS SIGNAL LABOR RISING JOB OPENINGS SIGNAL LABOR MARKET TIGHTENING MARKET TIGHTENING etween May and October 2014 (most recent Help Wanted etween May andatOctober 2014end-of-month (most recent Help Wanted data available press time), Monthly hires and job openings** in

BB

available at press time), end-of-month jobdata openings in the restaurants-and-accommoMonthly hires and job openings** in the restaurant-and-accommodations job openings in the restaurants-and-accommodations sector* averaged 619,000, according to the restaurant-and-accommodations sector (thousands) dations sector* 619,000, the Bureau of averaged Labor Statistics’ Jobaccording Openingstoand sector (thousands) 800 the Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLTS) program.

This marked 800 700 Labor Turnover (JOLTS) Thisopenings marked an increase of more thanprogram.

160,000 job 700 600 anover increase more than 160,000 jobsame openings what of was reported during the 600 500 over what was reported during the same six-month period in 2013.

500 400 six-month 2013.

At theperiod same in time, the rate of hiring in the 400 300 At the same time, thewas ratetrending of hiringupward. in the hospitality sector also 300 200 hospitality sector was places trending upward.

Restaurants and also lodging filled an 200 100 Restaurants and lodging placeseach filled an average of 722,000 positions month 100 average Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 duringof the722,000 May topositions October each 2014 month period, Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 during May to October 2014 period, whichthe represented the strongest pace of Total hires during the month which thesix strongest hiringrepresented in more than years. pace of Job hires openings at the month end of the month Total during hiring in more six figures years. represent the Job openings the Statistics; end of the month (Note: Thethan “hires” Source: Bureau ofat Labor figures are seasonallyadjusted (Note: The “hires” figures the Source: Bureau of Labor Statistics; figures are seasonallytotal number of additions torepresent the payroll adjusted **Job openings represent vacancies on the last business total number of additions to growth the payroll during the month.

Net job — which day of the month **Job openings represent vacancies on the last business during the month.

Net jobplaces growth —the which for eating and drinking is in day of the month for eating to and drinking places is inathe +30,000 -30,000 range during typical month — is the difference between total hires and +30,000 to -30,000during range during a typical month — is the difference between total hires and total separations the month.) total Overall, separations bothduring hiring the andmonth.) job openings trended upward during the last few years, as would be Overall,during both hiring and job recovery. openingsHowever, trended upward the last few years, as would expected an economic growthduring in the number of hospitality job be expected an economic growth theout number of with hospitality jobof hiring. openingsduring accelerated sharplyrecovery. in 2014, aHowever, development thatinwas of sync the pace openings accelerated in 2014, a development thatwas wasmuch out ofsmaller sync with pace ofinhiring.

The gap betweensharply monthly hires and job openings thanthe normal 2014. between monthly hires and jobperiod, openings much than in 2014. was InThe fact,gap during the May to October 2014 the was average gapsmaller between thenormal two indicators Inthe fact, duringthat the itMay October period, theseries average gap in between smallest hasto been since 2014 the JOLTS data began 2000. the two indicators was the smallest that trends it has been the JOLTS datathat series in 2000.

While these don’tsince necessarily indicate thebegan industry is careening toward a full-blown While these trends don’t necessarily indicate that the industry is careening a full-blown labor shortage, the underlying fundamentals suggest that the labor market is toward likely tightening. labor shortage, the underlying fundamentals suggest that the labor market is likely tightening.

*Note that the figures presented are for the broadly defined restaurants-and-accommodations sector, because the Bureau Labor Statistics doesare notfor report data fordefined restaurants alone. *Note thatofthe figures presented the broadly restaurants-and-accommodations sector, because the Bureau of Labor Statistics does not report data for restaurants alone.

National Restaurant Association | Restaurant.org/Forecast National Restaurant Association | Restaurant.org/Forecast

21 21

f cE LONG-TERM JOB GROWTH EXPECTED Building on the recent gains, the restaurant industry is expected to post LONG-TERM JOB GROWTH steady employment growth well into the EXPECTED future.

The overall restaurant industry Building on the recent gains, the restaurant is projected to provide recordemployment 14.0 industry is expected to posta steady million jobs in 2015.

The total industry growth well into the future. The overall workforceindustry is defined by the NRA as a restaurant is projected to provide employment in all eating-and-drinkingrecord 14.0 million jobs in 2015. The total place occupations employment industry workforce isplus defined by the NRAin as foodservice positions that are not located employment in all eating-and-drinking-place at eating and drinking places.

Looking ahead over the next decade, the NRA expects the restaurant and foodservice industry to provide 15.7 million jobsplus by 2025, an increase of 1.7 occupations employment in foodservice million positions during the 10-year positions that are not located at eating and period. drinking places.

Looking ahead over the next decade, the

On anexpects occupational level,and jobfoodservice growth NRA the restaurant isindustry expected to be broad-based over to provide 15.7 million jobs by 2025, the next decade.

Industry jobs an increase of 1.7 million positionsthat during the combine food preparation and service 10-year period. are On projected to growlevel, nearly percent an occupational job16 growth is between 2015 and 2025, a gain of 515,000 positions. The restaurant

industry is also projected to add 318,000 server positions in the next 10 years, an increase of nearly 13 percent. expected to be broad-based over the next

The number of restaurant cook positions decade.

Industry jobs that combine food ispreparation expected to grow by nearly 16 percent and service are projected to grow (175,000 inbetween the next decade, while nearly 16jobs) percent 2015 and 2025, a chef and head cook jobs are projected gain of 515,000 positions. The restaurant to increase percent. industry14 is also projected to add 318,000 server positions in the next 10 years, an increase of

Supervisory and manager positions nearly 13 percent. are also projected to registercook growth The number of restaurant positions is during the next decade. The number of first-line supervisors/managers of

Restaurant Workforce Projected to Reach 15.7 Million by 2025 Growth in restaurant industry employment by occupation, 2015 to 2025

EMPLOYMENT CHANGE, 2015-2025 2015 Employment

TOTAL RESTAURANT INDUSTRY EMPLOYMENT Food Service Managers Food Preparation and Serving Related Occupations Supervisors, food preparation and serving workers

2025 Employment

Jobs Added

14,006,000

15,723,000

1,717,000

12.3%

1.2%

341,000

378,000

37,000

10.9%

1.0%

12,809,000

14,420,000

1,611,000

12.6%

1.2%

1,039,000

1,192,000

153,000

14.7%

1.4%

121,000

138,000

17,000

14.0%

1.3% 1.4%

Chefs and head cooks First-line supervisors/managers of food preparation and serving workers Cooks and food preparation workers Cooks

Total % Change

Avg. Annual % Change

918,000

1,054,000

136,000

14.8%

3,219,000

3,599,000

380,000

11.8%

1.1%

2,341,000

2,619,000

278,000

11.9%

1.1% 0.7%

Cooks, fast food

569,000

612,000

43,000

7.6%

Cooks, institution and cafeteria

445,000

497,000

52,000

11.7%

1.1%

7,000

7,000

0

0.0%

0.0%

Cooks, restaurant

1,119,000

1,294,000

175,000

15.6%

1.5%

Cooks, short order

173,000

177,000

4,000

2.3%

0.2% 1.3%

Cooks, private household

28,000

32,000

4,000

14.3%

Food preparation workers

Cooks, all other

878,000

980,000

102,000

11.6%

1.1%

Food and beverage serving workers

7,137,000

8,106,000

969,000

13.6%

1.3%

Bartenders Fast food and counter workers Combined food preparation and serving workers, including fast food Counter attendants, cafeteria, food concession, and coffee shop

592,000

670,000

78,000

13.2%

1.2%

3,762,000

4,303,000

541,000

14.4%

1.4%

3,297,000

3,812,000

515,000

15.6%

1.5%

465,000

491,000

26,000

5.6%

0.5%

2,524,000

2,842,000

318,000

12.6%

1.2%

259,000

291,000

32,000

12.4%

1.2%

Other food preparation and serving related workers

1,414,000

1,523,000

109,000

7.7%

0.7%

Dining room and cafeteria attendants and bartender helpers

439,000

478,000

39,000

8.9%

0.9%

Dishwashers

559,000

602,000

43,000

7.7%

0.7%

Hosts and hostesses, restaurant, lounge, and coffee shop

375,000

398,000

23,000

6.1%

0.6%

Waiters and waitresses Food servers, nonrestaurant

All other food preparation and serving related workers Other Eating-and-Drinking-Place Occupations*

41,000

45,000

4,000

9.8%

0.9%

856,000

925,000

69,000

8.1%

0.8%

*Includes operational, business, financial, entertainment, sales, administrative and transportation occupations Source: National Restaurant Association projections, based on historical data from the Bureau of Labor Statistics

August 2015 | 17 22

National Restaurant Association | Restaurant.org/Forecast

f cE food preparation and serving workers is

expected to grow by nearly 16 percent (175,000 expected to grow by nearly 15 percent jobs) in the next decade, while2015 chef and (136,000 jobs) between andhead cook jobswhile are projected to increasefoodservice 14 percent.

2025, theby number expected to grow nearly 16ofpercent (175,000 Supervisoryisand managertopositions are also managers projected increase jobs) in the next decade, while chef and11 head projected to register growth during the next percent. cook jobs are projected to increase 14 percent. decade. The number of first-line supervisors/ Supervisory and manager positions are also managers of food preparation and serving Non-foodservice at eating projected to register jobs growth during the next workers is expectedplaces to grow by nearly 15 and drinking — including decade. The number of first-line supervisors/ percent (136,000 business, jobs) between 2015 and 2025, operational, financial, managers of food preparation and serving while the number of sales, foodservice managers is entertainment, administrative workers is expected to grow by nearly 15 projected to increase 11 percent. and transportation occupations — are percent (136,000 jobs) between 2015 and 2025, Non-foodservice jobs atnearly eating 70,000 and drinking projected to grow by over while the number of foodservice managers is places including operational, business, the — next years, an increase of more projected to10increase 11 percent. financial, sales, administrative than 8entertainment, percent. jobs Non-foodservice at eating and drinking and transportation occupations — are projected places — including operational, business, to grow by nearly 70,000 over the next 10 years, WORKFORCE COMPOSITION WILL financial, entertainment, sales, administrative an CONTINUE increase of more than 8 percent.

TO EVOLVE and transportation occupations — are projected Based the demographic to grow on by nearly 70,000 over theprojections next 10 years, WORKFORCE COMPOSITION in the coming years, likely that an increase of more thanit8ispercent.

WILL CONTINUE the composition ofTO the EVOLVE restaurant Based on theworkforce demographic projections intothe industry will continue WORKFORCE COMPOSITION coming years, it is likelyto that theBureau composition evolve.

According the of of WILL CONTINUE TO EVOLVE theLabor restaurant industry workforce will continue Statistics, the number of 16 Based on the demographic projections intothe to evolve.

According to the Bureau offorce Laborwill 24 year-olds U.S. coming years, itinisthe likely thatlabor the composition of Statistics, the number of 16- to-24-year-olds in decline by nearly 3 million between 2012 the restaurant industry workforce will continue theand U.S.2022. labor force decline by nearlyhave 3 Thiswill development to evolve.

According to the Bureauwill of Labor million between 2012 andrestaurant 2022. This developimplications for the industry, Statistics, the number of 16- to-24-year-olds in ment will have implicationsgroup for thecurrently restaurant as this the U.S. demographic labor force will decline by nearly 3 industry, as thisabout demographic group currently comprises four in 10 restaurant million between 2012 and 2022. This developcomprises about four in 10 restaurant workers. workers. ment will have implications for the restaurant

Meanwhile, older adults are projected to industry, as this demographic group currently become a much larger component the labor Meanwhile, older areof projected comprises about four adults in 10 restaurant workers. pool.

BLS predicts the number ofcomponent adults aged 65 to Meanwhile, become a much larger older adults are projected to of or the olderlabor in thepool. labor BLS forcepredicts will jump by 5.7 number become a much larger componentthe of the labor million between 2012 and 2022, while 55toof adults aged 65 or older in the labor pool. BLS predicts the number of adults aged 65 64-year-olds in the labor force will rise by 3.6 force jump byforce 5.7 million or olderwill in the labor will jumpbetween by 5.7 million.

Although these two55 cohorts currently 2012 and 2022, while to 64 year-olds million between 2012 and 2022, while 55- torepresent than one will in 10rise restaurant in the less labor 64-year-olds inforce the labor force by will3.6 risemillion. by 3.6 employees, their share of the industry workAlthough these two cohorts currently million.

Although these two cohorts currently force will likelyless risethan in theone years ahead. represent ten restaurant represent less than one in 10in restaurant employees, their share of the industry employees, their share of the industry workworkforce will likely rise in the years force will likely rise in the years ahead.

Older Adults will be Largest

ahead. 

Source of Labor Force Growth Older adults willinwill be Older Adults be Largest Projected change thelargest U.S. labor source of labor 2012 forcetogrowth force (in millions): 2022 Source of Labor Force Growth Projected change in the U.S. labor force 5.7

Projected change in 2022 the U.S.3.6labor (in millions): 2012 to 3.3 2.1 2012 to 2022 force (in millions): -1.4

-1.5

3.6 2.1 -3.5

16-19 20-24 25-34 35-44 45-54 55-64 65 or older -1.4 -1.5 Age Group Source: Bureau of Labor Statistics

-3.5

16-19 20-24 25-34 35-44 45-54 55-64 65 or older Age Group

Source: Bureau of Labor Statistics

T T

2014, median tenure (the point at which half of all workers had more tenure and half had less he tenure that restaurant employees have with their current employer remains above tenure) for employees in the eating-and-drinking-place sector was 2.0 years, down slightly pre-recession levels, according to data from the Bureau of Labor Statistics. In January from 2.1 years in January 2012. In comparison, median tenure of all private sector employees 2014, median tenure (the point at which half of all workers had more tenure and half had less was 4.1 years in January 2014, down slightly from 4.2 years in January 2012. tenure) for employees in the eating-and-drinking-place sector was 2.0 years, down slightly During the 2004 to 2008 period, median tenure was generally in the 1.5 year range for from 2.1 years in January 2012. In comparison, median tenure of all private sector employees eating-and-drinking-place employees. The recent rise in tenure could be due in part to the was 4.1 years in January 2014, down slightly from 4.2 years in January 2012. declining representation of teenagers in the restaurant workforce in recent years, as they During the 2004 to 2008 period, median tenure was generally in the 1.5 year range for typically stay with employers for a shorter period of time. eating-and-drinking-place employees. The recent rise in tenure could be due in part to the declining representation teenagers in theAbove restaurantPre-Recession workforce in recent years, as they Employee Tenureof Remains Levels typically stay with employers for a shorter period of time.

Median years of tenure with current employer: Eating-and-drinking-place employees vs. total private sector

Employee Tenure Remains Above Pre-Recession Levels 4.2

4.0

4.1

3.5 3.6 Median years of tenure with3.6current employer: Eating-and-drinking-place 2.2 2.1 2.0 1.6 1.6 employees vs. total 1.4 private sector 3.5

Jan 2004

3.6

1.6

Jan 2008

2.2

4.1

Jan 2012

2.1

Jan 2014 2.0

Eating-and-drinking-place employees

Source: Bureau of Labor Statistics

Jan 2004

Jan 2010

1.6

1.4

4.2

4.0

3.6

Jan 2006

Total private sector employees Jan 2006

Jan 2008

Jan 2010

Jan 2012

Jan 2014

Note: Information on employee tenure is obtained by the Bureau of Labor Statistics from supplemental questions in the Current Population Survey (CPS) every two Eating-and-drinking-place years, in January.

Total private sector employees employees Source: Bureau of Labor Statistics Note: Information on employee tenure is obtained by the Bureau of Labor Statistics from supplemental questions in the Current Population Survey (CPS) every two years, in January.

Employee Turnover Remains Below Historical Average

TEmployee Turnover Remains Below Historical Average T

he turnover rate in the hospitality sector rose for the third consecutive year in 2013, but remained below pre-recession levels, according to data from the Bureau of Labor Statistics. The overall turnover rate in restaurants-and-accommodations* sector stood at he turnover rate in the hospitality sector rose for the third consecutive year in 2013, but 62.6 percent in 2013, up six percentage points from the recent low of 56.6 percent in 2010. remained below pre-recession levels, according to data from the Bureau of Labor Despite the increase, the turnover rate remains low in historical terms. In 2007, prior Statistics. The overall turnover rate in restaurants-and-accommodations* sector stood at to the economic downturn, the turnover rate of the restaurants-and-accommodations 62.6 percent in 2013, up six percentage points from the recent low of 56.6 percent in 2010. sector was 80.9 percent. This was generally on par with turnover in the previous five years Despite the increase, the turnover rate remains low in historical terms. In 2007, prior (2002-2006), when the annual rate averaged 80 percent. to the economic downturn, the turnover rate of the restaurants-and-accommodations In comparison, the average turnover rate for all private sector workers stood at 42.2 sector was 80.9 percent. This was generally on par with turnover in the previous five years percent in 2013, up slightly from the 2010 low but still below the average turnover rate of (2002-2006), when the annual rate averaged 80 percent.

50 percent during the 2002–2006 period.

In comparison, the average turnover rate for all private sector workers stood at 42.2 percent in 2013, up slightly from the 2010Upward low but still below the average turnover rate of Turnover Trending Slowly 50 percent during the 2002–2006 period.

Annual turnover rates**: Restaurants-and-accommodations sector versus total U.S. private sector

Turnover Trending Slowly Upward 82.2%

80.9%

74.2% Annual turnover rates**: Restaurants-and-accommodations sector 62.6% 61.0% 61.0% 58.8% 56.6% 49.1% 47.9% 44.0% 42.2% 40.8% 41.5% 40.5% versus total U.S. private sector

50.0%

82.2%

2006 50.0% 5.7

3.3

RESTAURANT EMPLOYEES ARE STAYING AT THEIR JOBS LONGER RESTAURANT EMPLOYEES ARE he tenure that restaurant employees have with their current employer remains above pre-recession levels,AT according to data from JOBS the Bureau of Labor Statistics. In January STAYING THEIR LONGER

80.9%

2007 49.1%

Total private sector

74.2%

2008 47.9%

2007

44.0%

201056.6% 40.5%

201158.8% 40.8%

201261.0%

201362.6% 42.2%

2012

2013

41.5%

Restaurant and accommodations sector

Source: Bureau of Labor Statistics

2006

200961.0%

2008

2009

2010

2011

*Note that the turnover figures presented are for the broadly defined restaurants-and-accommodations sector, because the Bureau Statistics does report data for restaurants Total private sectorof Labor Restaurant andnot accommodations sector alone.

**Annual is theStatistics number of total separations during the entire year as a percent of average annual Source:turnover Bureau rate of Labor employment *Note that the turnover figures presented are for the broadly defined restaurants-and-accommodations sector, because the Bureau of Labor Statistics does not report data for restaurants alone. **Annual turnover rate is the number of total separations during the entire year as a percent of average annual employment

National Restaurant Association | Restaurant.org/Forecast

23

18 | warestaurant.org National Restaurant Association | Restaurant.org/Forecast

23

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August 2015 | 19

f cE Profile of Washington’s workforce by position

By Sheryl Jackson, research editor Washington employs more than 220,000 workers directly in eating and drinking establishments. The average restaurant worker is a single female living in a household with more than two workers, with some college education and no children.

Below is a breakdown of several common positions within the industry.

Overall Average Restaurant Worker

Entry-Level Full Service

Entry-Level Quick Service

Restaurant Server

Restaurant Manager

51% Female

58% Male

69% Female

64% Female

59% Male

Average Age

39% are between 25 - 40 years old

69% under 25 years of age

56% under 25 years of age

47% are between 25 - 40 years old

46% are between 40 and 59 years old

College Education

53% some 49% some 47% some college education college education college education or have degree or have a degree or have a degree

66% have some college education or have a degree

66% have some college education or a degree

Gender

Marital Status

Workers in Household*

Related Children

59% Single

83% Single

77% Single

67% Single

57% are married

82% live in a household with 2 or more workers

82% live in a household with 2 or more workers

87% live in a household with 2 or more workers

76% live in a household with 2 or more workers

76% live in a household with 2 or more workers

57% have no children

54% have no children

58% have no children

65% have no children

50% have no children

Source: The Washington Foodservice Workforce in 2013, Decision Demographics 20 | warestaurant.org

f cE Food trucks: More than just a trend

By Andy Cook, contributing editor

Have you heard about food trucks as the latest trend in food service?

Is it a trend? Is it really new? What about urban street vendors that sell hot dogs, pretzels, kabobs and countless other foods? Imagine community festivals where part and parcel, along with the rides and games, are rows and rows of food vendors operating out of… food trucks.

Thinking of food trucks as the latest trend in food service is rather shortsighted. While there are similarities, there are also undeniable differences between the tableau of today’s mobile culinary vendors and the aforementioned street vendors and festival food fare.

Take a walk around any reasonably populous city these days and you’ll be sure to notice colorfully designed, brandwrapped mobile eateries parked and crowded by a hungry clientele waiting curbside to scratch a culinary itch.

What we’re experiencing isn’t a trend, it’s a phenomenon.

Whatever your palate’s pleasure; there’s likely a food truck nearby that specializes in it.

An industry microcosm of place and time Place: The great American melting pot in action; just like their brick and mortar siblings, line up all the food trucks in Washington state, and you’ll find representatives of the world’s ethnic cuisine represented with pride and authenticity. Are you in the mood for cuisine from a particular region of Latin America? Korean BBQ? Sushi?

Kabobs? Check, check and check. There’s a food truck for whatever your palate desires.

Time: The age in which we live is really what’s at the tip of the needle concerning the food truck phenomenon. Today’s food trucks started to get traction in the early 2000s, as did the food network. The resulting rise of the foodie movement has invited a swath of adventurous Americans to break away from the staple foods to which they were accustomed and try new and exciting ingredients, preparations and varying ethnic dishes, providing a boon to the restaurant industry. As our industry adapted to a more adventurous clientele, food

trucks have picked up on the hyper specialty niche that most full-blown restaurants can ill afford to pursue.

With the explosion of social media, in recent years, many restaurateurs have integrated with the technology to great benefit, with food trucks operators shifting into top gear. The two are a perfect fit.

Many food truck operators are Twitter celebrities, often creating a craving simply by posting their current location.

Don’t believe it? Type #foodtruck into Twitter. I dare you.

Brick-and-mortar restaurants: Where do they fit in?

Many metropolitan cities have gotten ahead of the issue and set up lottery systems and/or time and place zoning to foster an optimal economic ecosystem for all concerned. But for many geographical regions these have yet to coalesce into a standard system. Many local policymakers are slow to catch on to the phenomenon causing such understandable friction among brick-and-mortar establishments and their mobile counterparts. Regulatory differences between the two models of foodservice are surprisingly vast, especially with regard to alcohol service and health department mandates.

To some restaurateurs, the food truck represents opportunity. A mobile extension of their business is being pursued for a score of valid reasons:

As an avenue of expansion, A branding opportunity by participating in local festivals,

A showcase of specialty preparations, An inexpensive and efficient model for catering

opportunities, and A way to extend business hours and location (setting up near nightclubs or bars for the after-hours income without the expense of staying open late hoping to tap that demographic).

If this were, indeed, a trend, much of what you’ve just read would be worthy of ignoring. Trends come and go.

Phenomena resonate. 

August 2015 | 21

f cE The big three: What keeps Washington state’s HR managers up at night.

By Paul Schlienz, managing editor, and Marianne Scholl, contributing editor

1. Talent is king, but how am I going to hire it?

In hospitality, the quality of your staff—and how they welcome and serve your guests—can make or break your business. This has never been truer than it is today. A few bad reviews or an unhappy customer’s rants on Twitter now have the power to seriously dent your bottom line. Good employees are more valuable than ever, and the competition to find them and keep them is fierce.

Janyce Volodkevich, regional director of people and culture for Kimpton Hotels and Restaurants, is well acquainted with the challenges of attracting and retaining quality employees in a tightening job market.

She and her team are responsible for keeping Kimpton’s four boutique hotels and five restaurants in downtown Seattle fully staffed, including the new 97-room Palladian Hotel and 65-seat Shaker & Spear restaurant. And even though Kimpton has been one of Fortune’s 100 Best Companies to Work For since 2009, and was the highestranking hotel company on the list in 2014, finding staff is a challenge.

“It’s a candidate’s market,” says Volodkevich.

Low unemployment rates and the hot culinary scene makes recruiting in Seattle especially tough.

“The biggest challenge in hiring and recruiting is new cooks,” she says. “Restaurants, in my years of recruiting, have never been so short staffed.”

To attract job seekers, Kimpton has had to change things up. Ads on Craigslist now need to entice applicants, and “Cook Wanted” no longer does the trick. Instead, Kimpton promotes opportunities to work with award-winning chefs.

They also advertise in Spanish; they participate in job fairs and they use common social media channels to connect with prospective employees. Volodkevich has been told Kimpton needs to add SnapChat to the mix.

And timing is everything.

“You need to be the first to respond, or the applicant is on to someone else,” says Volodkevich.

With foodie culture on the rise and so many celebrity chefs, 22 | warestaurant.org

you’d think the foodservice industry would have more than enough applicants dying to get into what they perceive to be a glamourous field, but this is not the case across the board.

“With chefs becoming famous, it’s actually harder to get people to come to a casual restaurant because they feel they won’t get the same recognition they would at the more high profile eateries,” says Erin Everhart, general manager of Spokane-based Longhorn Barbecue.

Michael Hirschler, director of human resources at the Four Seasons Hotel Seattle, says hospitality is no longer simply competing for employees within the industry.

“Everyone is hungry for talent,” says Hirschler. “Amazon, Zillow and Red Fin aren’t necessarily only looking for tech skills, but customer service skills.”

The result: The hot tech economy is putting pressure on hospitality HR departments.

Gabrielle Wolcott, general manager of the Chateau Westport Resort, on the coast, also lists too few quality candidates as her biggest HR challenge, but for a very different reason.

She says the legalization of recreational pot is hurting her ability to find qualified workers. ”We use temp agencies and recruiting agencies that do drug testing, and because marijuana is legal, [people] think that when it comes up on a test it will be okay,” says Wolcott.

That isn’t the case. Applicants who test positive for marijuana are immediately dropped from consideration by the agencies Wolcott uses.

“There just aren’t as many people in the workforce that are eligible anymore,” Wolcott adds. “The pool isn’t where we’re counting on it to be.”

2. How do we keep up with increasing minimum wages?

(And is $15 coming to my town next?)

Local $15 minimum wage ordinances are understandably also causing headaches and heartache for business owners and HR teams, and not just in Seattle and SeaTac. “Restaurant owners are just going to have to face it and make it part of their plans,” says Mark Klebeck, owner of Top Pot

f cE

Doughnuts, which includes units in Seattle. “I just hope that the minimum wage increase doesn’t put anyone out of business.”

As Jim Davis, general manager at DoubleTree Suites by Hilton Hotel Seattle Airport - Southcenter, knows all too well, employers in neighboring cities are losing staff and having to increase wages to keep up with mandated increases.

“When the hotels up the street are already paying over $13 or $12.50 to start, with a bump at 90 days, I can’t compete,” he says. “I’ve lost over 50 percent of my housekeeping staff, and in the last seven months, we’ve had to do a quick unbudgeted wage scale increase for the entire department.

We’ll do another full scale wage increase in January 2016.”

The hit to housekeeping includes employees who’ve been with the company for 15 or 20 years, members of the team who say they aren’t leaving because they are unhappy. In the end, money wins.

Deborah Hartl hasn’t yet seen pressure from Seattle area increases reach Leavenworth, where she serves as director of human resources at the storied Sleeping Lady Resort.

Nevertheless, she is concerned that higher minimum wages will force the entire pay scale upward.

“What do you do with people who have been with you for years?” she asks. “You can’t leave them at $15 an hour. You have to raise all of them to keep the equity in place. So the cost to the employers isn’t just from $13 to $15, it is also raising the bar on every single employee within the business.

You have to keep a spread in pay to honor their longevity.”

In Tacoma, where voters will choose between dueling minimum wage initiatives, in November, mandated wage increases are much on the minds of the city’s restaurateurs.

“We like to give our new crew members four to five days of training,” says Monique Trudnowski, owner of Tacoma’s Adriatic Grill. “Unfortunately, that is going to go away under the higher minimum wage; it is too expensive, and we’re going to be slower to bring on new crew members. Before, I could also have more bussers and hosts, but these positions don’t produce sales, and I have to think about my bottom line. The city is forcing me to change my business model.”

For more information on the Seattle minimum wage, visit the WRA’s 12-part web series on this issue at wra.cc/minwage15a.

3. Local employment mandates, ACA reporting requirements, FSLA changes…. Help!

Hartl’s biggest challenge, and one she says is shared by her HR colleagues, is following the Affordable Care Act’s burdensome reporting requirements.

The cost of insurance is not the issue for Sleeping Lady.

It has provided employee healthcare coverage since long before the ACA, but now it has to follow complex audit reporting rules that don’t fit with how the industry works.

“With the Affordable Care Act, so many things are triggered based on hours, and when you are in an industry such as hospitality, it makes it very difficult because we schedule hours based on business needs, not seasons,” she says. “The constant fluctuation of hours makes things very complicated, and there is a tremendous risk if we make an error because the government will fine us if we get it wrong.”

In order to keep up with the reporting, Hartl will be hiring a half-time HR employee and putting new ACA reporting software into her 2016 budget.

The Four Seasons’ Hirschler, who also serves as president of the Seattle chapter of the Hospitality Human Resources Association, says HR professionals are simply having a hard time keeping up with all the changes. He’s fortunate to have a national corporate office helping his team comply with federal requirements, but local mandates are his bailiwick.

“We’re dealing with so many changes, and so rapidly,” Hirschler points out. “And these new laws all laws come with multiple implementation schedules. Just knowing the schedule of each law is a challenge. On top of the wage law, other laws are ramping up in Seattle. Paid sick and safe leave was passed a while ago, but it is ramping up with its implementation. There is a wage theft law that is not on people radar. Even the city is having trouble keeping up with implementation.” 

August 2015 | 23

Resources to initiate successful employment

By Lyle Hildahl, WRA Education Foundation director

For years, the Department of Social and Health Services has invested millions of dollars to provide public assistance for those in need. It has been challenging to get to the next step – to get individuals on public assistance jobs leading to a long term career that’s sustainable. The latest effort is through a federal grant called Resources to Initiate Successful Employment (RISE).

The Education Foundation successfully submitted a proposal with a very innovative approach. We will provide classroom training, including onthe-job training, and use ongoing employer feedback and employer expertise in the classroom to initiate success for the employee. Comprehensive case managers will assist in eliminating any barriers for the employee to show up for class or work.

Anthony Anton, the WRA’s president and CEO, passionately believes our industry is the industry of opportunity. Many of us started out at minimum wage and are now in a successful career in hospitality. Anthony created a career ladder project, identifying skills necessary to move up the ladder from minimum wage to $50K per year in six steps. With the resources from this grant, Anthony’s vision can become a reality.

I was involved in a project years ago similar to RISE. It was called WorkFirst. Initially, it appeared to have all the components necessary to get participants into jobs, 24 | warestaurant.org

starting them on successful careers. They secured jobs following the training, but unfortunately, did not keep their jobs. A majority of the program’s participants seemed to prefer being on public assistance instead of engaging with the world of work.

After this experience, it was only natural for me to ask myself why RISE would be different from WorkFirst.

I believe RISE is different because the employer is engaged throughout the process, and the concepts of mentoring and coaching is emphasized.

We believe it’s not just the entry-level job that measures success, but the ability to move up the ladder and the desire to move up the ladder because a coach or mentor has motivated us to do so. We will need your help in the project. We need industry leaders to help mentor, coach, and motivate employees to be successful.

We hope that many of you will see this as an opportunity to get trained and motivated employees in your business, and will sign up as a pilot employer. Jack-in–the-Box in Tacoma has signed on as our first pilot employer and will hire the students for the first step of the career ladder. Let us know if you want to know more. We would love for you to be involved.

This project covers Pierce County in the first year and will include Spokane County the following year. If you have a restaurant in Pierce or Spokane counties, give us call at 877.695.9733. 

速

INDUSTRY CALENDAR Aug/Sept Training

NEW RESTAURANTS Balsamroot Baking, LLC, Wenatchee

Naches Bar & Grill, Greenwater

Celebrity Cake Studio, Tacoma

Nudo, Spokane

Aug. 24

ServSafe® Manager, Vancouver

Costa Vida, Vancouver

Quality Athletics, Seattle

Sept. 1

ServSafe Manager, Seattle

Coterie Worklounge, Seattle

Renaissance Café, Tacoma

Sept. 8

ServSafe® Manager, Kent

Sept. 14

ServSafe® Manager, Kent

DK’s Drive In, Ephrata

Republic Pi, Spokane

Sept. 17

ServSafe® Manager, Tacoma

Domino’s, Sequim

Saucy Sisters Brick Oven Pizza, Vashon

Sept. 22

ServSafe® Manager, Fife

Domino’s, Woodinville

Shakabrah Java, Tacoma

Freestone Inn & Cabins, Mazama

Shingletown Pub, Seattle

Frellard Pizza Company, Seattle

Stogie’s Cigar & Sports Lounge, Fife Subway, Enumclaw

®

Meetings Sept. 1

Executive Committee

Sept. 15

Board Development Conference Call

Sept. 15

Finance Committee

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Events

IHOP, Pasco

Aug. 27

State of the Industry

Sept. 22

Golf FORE! Education

Lost Boys Garage, Spokane Mick Kelly’s Irish Pub, Kent My Cheese Shoppe, Puyallup

Subway, Tacoma, Fife, Lacey, Roy, Olympia Summit Public House, Seattle Sweeto Burrito, Chelan Vita D’Italia, Burien Westy Sports & Spirits, Seattle

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26 | warestaurant.org

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by text or email. Business owners can respond to feedback in real time. This allows businesses to fix issues before the customer leaves, avoiding negative reviews. WRA members special offer: 10% off per month, even with multiple locations. First month is free. Use coupon code wrafriend10.

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Increase your profits by reducing your card processing expenses. Heartland Payment Systems will help you do just that by eliminating outsourcing and middlemen- delivering cost savings and streamlined processes to your restaurant.

WRA member pricing: Fair pricing for WRA members.

Contact HPS online or contact Harry Wagoner for a personalized quote today. Email: Harry.wagoner@e-hps. com | Phone: 405.818.0914

MEDICAL AND DENTAL COVERAGE

BIG DISCOUNTS ON OFFICE SUPPLIES

See the full suite of WRA and NRA products offered through Heartland Payment Systems here: www. heartlandpaymentsystems.com/Products-Services/ Payment-Processing

SAVE MONEY. Discounts up to 80% off MSLP on hundreds of commonly used industry supplies and your own custom list of 75 additional items with the same steep discounts.

WRA Members sign up here: wra.cc/wraofficedepot Employees and Family sign up here: wra.cc/ officedepotemployees

The Washington Restaurant Association designed a health care plan just for WRA members. The Hospitality Industry Health Insurance Trust (H.I.H.I.T.) enables business owners in the hospitality industry to provide affordable healthcare benefits statewide. Contact Joe Peoples at 877.892.9203 for a FREE quote.

WE EXIST TO SERVE YOUR RESTAURANT NEEDS

CARLOS GARCES 425‐291‐5279

425‐291‐5200 WWW.BELL‐ANDERSON.COM

28 | warestaurant.org

MIKE ENGLUND

Employment Practices 425‐291‐5255 Employee Benefits General Liability & Liquor Liability Cyber Liability – For Sensitive Customer Data

STATE OF THE INDUSTRY AUGUST 27, 2015

WHAT

Enjoy breakfast catered by FareStart while networking with industry professionals and hear the state of the industry from the Washington Restaurant Association’s President and CEO Anthony Anton. Then attend two seminars, led by knowledgeable industry professionals.

WHEN

August 27, 2015 | 7:00 – 11:00 a.m.

WHERE

Goodwill Education & Training Center 700 Dearborn Place South Seattle, WA 98144 Free available parking on the street, in the overflow parking lot and also customer parking at the Seattle Goodwill Store.

HOW MUCH $15

HTTP://WRA.CC/SOIF2015

CATERED BY

Ask the Expert | Restaurant Profit Coach

Develop and retain your staff

By Rick Braa, CHAE

Q:

This year has been difficult to find people and keep them. The labor market seems tight and when I try to hire a person, from a dishwasher to a manager the money they’re asking for is higher than what I’m paying my long-term employees. Turnover in my business is as high as it was before the recession.

At this point, what should I be focusing on to stabilize my workforce?

A:

Turnover is expensive. One can safely estimate the hiring and training costs of an hourly worker averages above $1,000 and a manager above $10,000 plus unquantified costs such as guest retention and guest complaints. Intense focus must be paid to every individual on the team and performance and potential noticed and rewarded. To compete and win the race for talent, consider the following tactics:

High

Analyze performance and potential together—use the ninebox matrix, believed to have been developed by McKinsey Consulting for GE in the 1960s or ‘70s. The approach is simple. Performance on x-axis and potential y-axis: 1A would rank high potential and high performance, 3C would rank low

1A

Medium

2A

3B

2B

1B

3C

2C

1C

Low

Medium

High

Low

Potential

3A

Performance potential and low performance. The goal is to have a mix of people on the team that perform at a high level regardless of potential and develop each individual to maximum individual potential whether that is low, medium or high. For example, decisions with a 3C are simple; that person was likely a poor hire or has developed irreversible habits and needs to be replaced. 1A is self-motivated, owns the work and solves problems. These are your star players who need difficult issues to solve and added responsibility. The questions marks really 30 | warestaurant.org

arise with those that have high potential, but aren’t performing well. Those are the individuals to focus on first. Find their motivators and stretch performance with constant coaching and attention.

Use a development plan for every person—everyone has goals, personal and professional. Some want a job, some want a career. Regardless of the drive of the individual, it is the responsibility of the operator of a business to enrich and enhance the development and professionalism of the employee. The key to unlocking performance is through the gateway of development, using a development plan formalizes the process and contributes to achievement. A development plan begins with the assessment of performance. Schedule a performance assessment where you and the employee assess his or her performance level. Once the assessment is complete, discuss three goals to elevate performance to the next level.

Agree upon goals that are specific, measurable, attainable, relevant and timely (SMART) that benefit the individual and the business. Meet at least twice per year to make sure progress is made on agreed upon goals and the development plan. Push this process through the business.

Pay competitively—with the recent escalation in minimum wage and the tightness of the labor market, wage inflation is a reality. It’s important to approach compensation from the perspective of what you would pay to keep an employee.

Recruiters are scouring the workforce, and you can be sure your people are a target if you have a respectable business.

During this time, it’s important to adjust to the market. Many businesses have employees that are below market pay due to longer retention. While this has short term benefit, great long term employees have efficiencies that create additional value a business cannot afford to lose. Be sure to reward those employees with the highest rate, not the lowest. You will likely have to adjust pricing or drive more guests through the door to cover the additional cost, but it’s worth it.

By assessing talent, implementing development plans and paying at market rate or better, retention of supreme talent increases, healthy culture persists and profits soar.  For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

New And Improved Health Insurance Plans!

Our new plans with industry specific flexibility will be essential for the hospitality industry to get through the healthcare reform changes unscathed.

New plans include an extended PPO network, and employer flexibility for contribution and participation.

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32 | warestaurant.org