The burger chain has led the pack for seven straight years.
This article appears in its original context on the QSR Magazine website By Danny Klein
In the summer of 2019, Chipotle’s chief restaurant officer, Scott Boatwright, referred to the labor landscape as a “talent crisis.” The pool had, for the first time in his career, or lifetime for that matter, surpassed a mark where there were more jobs than people to fill those roles. And so, while a celebratory milestone for some, it represented a changing reality for restaurants.
One key arena was the makeup itself. The labor force participation rate of teens had stagnated. A year earlier, the Bureau of Labor Statistics found 1.7 million teens worked in restaurants—the same number as 2007. Yet over that same span, the number of units jumped close to 16 percent.
The overall math was easy to crunch: In March 2019, the National Restaurant Association pegged the number of hospitality vacancies at a million. With the national unemployment rate sub-4 percent (it was 3.6 percent) that May, Boatwright’s point resonated.
So how has this resurfaced in the crosshairs of a pandemic rebound? Restaurants are staring down a field that added 74,100 jobs in July and now boasts 11.7 million people. While upward, it’s still more than 600,000 jobs short of February 2020. The unemployment rate, nationwide, was 3.5 percent. The BLS estimated hourly restaurant wages had climbed at a double-digit pace since April 2021 before retracting to 9 percent in June. Average hourly earnings actually fell in July for the first time since May 2020 (negative 0.16 percent). Still, they’re roughly 8 percent above year-over-year levels.
Enough time has passed where these data sets point to a lasting vision. In June 2022, there were 1.304 million job openings in the accomodation and food services field and 1.004 million hires. There were 918,000 separations.
When you couple wage bumps with commodity pressures, the result is a restaurant world where menu prices are increasing at the fastest clip since 1981. They surged 7.6 percent in July compared to the prior-year period, a slight deceleration from June’s 40-year high. Full-service meal prices climbed 8.9 percent and quick service 7.2 percent. Something that’s insulated restaurants is the food at home index soared 13.1 percent in the past 12 months, the largest yearly hike since the period ending March 1979.
All told, however, the pressing labor challenge returns to Boatwright’s 2019 descriptor. Has the “talent crisis” accentuated in light of recent workforce evolutions? The not-so-simple answer is yes. Restaurants have fewer workers to pick from and smaller staffs to operate with. They’re paying more to hire and more to retain, from bonus structures to enhanced benefits. So the ability to win the so-called “war for talent” is as much a differentiator today as it’s ever been, if not more so.
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