All Articles Food Restaurant and Foodservice What does the economic slump mean for restaurant hiring?

What does the economic slump mean for restaurant hiring?

3 min read

Restaurant and Foodservice

Federal Reserve Chairman Ben Bernanke’s testimony before Congress held little good news on the employment front. “Recent indicators, including new claims for unemployment insurance and surveys of hiring plans, point to the likelihood of more sluggish job growth in the period ahead,” said Bernanke, as quoted by Reuters. Recent data on August restaurant sales from the National Restaurant Association reflected increased uncertainty among operators about the prospects for same-store sales growth and staffing in the coming months, indicating that eateries likely won’t be hiring many workers between now and the end of the year – if other Americans are out of work, they’ll spend less at restaurants and that, in turn, means fewer restaurant jobs.

One restaurant chain aims to help boost job creation by recruiting patrons to help give small businesses a hand. Starbucks, long an unofficial office for the suddenly self-employed, said this week it will soon begin asking customers at its nearly 7,000 stores to contribute $5 to a fund that will make small-business loans designed to spur job creation and help get the economy moving again, The Associated Press reported. It’s one of several recent moves by CEO Howard Schultz to help right the U.S. economy, including a call to fellow CEOs to stop donating to national political candidates until leaders have a concrete plan to get reverse the slumping economy.

The tight economy makes it tough for restaurants to raise prices, despite rising food costs, further squeezing margins and making it harder to hire. Other recent developments, including rising health insurance premiums and higher taxes as states scramble to pay back unemployment funds borrowed from the federal government, also make it less likely that businesses will start creating significant numbers of jobs again.

But it’s not all gloom and doom – some chains are in expansion mode, adding new restaurants and creating new jobs to staff them.

For those of you that are hiring, recent research might convince you to leave behind the preconceived notion that hiring overqualified candidates means you’ll be filling the position again as soon as the employee finds a better gig. Restaurant Management reported on a study from the University of South Carolina that found that employees smarter than the positions they’re in actually tend to stay in the job longer and do a better job. “There is a great deal of evidence that says the higher a worker’s cognitive abilities the more successful they’ll be as a waiter, and will have a better memory, better work ethic, show up on time, be more professional, have more useful ideas, and possess better communication skills,” said study author Anthony Nyberg.

Are you hiring or holding steady? What key qualities do you look for in job candidates? Tell us about it in the comments.