What’s Up with Today’s Labor Market?

Covid panic caused operators to sharply reduce 2020 headcount in anticipation of a sharp sales drop-off.
To be fair, operators had no idea what to expect with the government lockdowns and prudently trimmed their expenses in anticipation of a sharp sales decline.

Fortunately, 2020 sales were not nearly as bad as expected – especially for QSR.
More so, the LTM 8/21 period sales rebound was astounding, far exceeding 2019 levels.

Despite the tremendous sales rebound, headcount levels never recovered.
The reluctance to return for those laid off was fueled by the comfort of government stimmy and possible health concerns.
Also, operators learned that closed dining rooms and simplified menus could be serviced by lower headcounts.
In any case, this all translated into a sharp increase in revenue per QSR employee.

While revenue per FSR employee did not increase, operators ran their stores with a reduced headcount.

The net result for remaining QSR & FSR employees was much more work and greater stress. Maybe good for short-term profits, but bad for long-term morale.
This translates into substantially more quits…

Conclusion

Restaurant employees are likely burned-out and perhaps a little distrustful of their employers after working so long to compensate for sharply lower store headcounts. Unfortunately, word gets out…
Now operators must work hard to re-establish trust with employees and new applicants by assuring them that they will be treated with respect & equity in properly staffed restaurants. Higher pay does not compensate for high stress conditions – especially not in today’s upside-down world!
The industry must not blame unfilled jobs on changing work ethics and an indulged work force. Rather, operators must recognize their role in providing a work environment that is challenging and rewarding but not stressful.
This is key as the industry needs to fill their job openings in order to restore staffing levels back to pre-covid levels – sales growth will likely stall until this is accomplished.