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National Restaurant Association - Industry job openings hit post-recession high

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Industry job openings hit post-recession high

The National Restaurant Association's Chief Economist Bruce Grindy breaks down the latest labor market trends.  The job openings rate in the hospitality sector hit a post-recession high in April, with the number of vacancies topping 600,000.  Restaurant operators are also reporting concerns about labor availability, which suggests that the industry’s traditional labor challenges will soon be back on the front burner.

The job openings rate in the restaurants-and-accommodations sector* soared to a post-recession high in April, according to the latest figures from the Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLTS) program. 

There were 625,000 job openings at restaurants and lodging places on the last business day in April, on a seasonally-adjusted basis.  This represented an increase of more than 100,000 job openings from just two months earlier, and marked the highest monthly level since the JOLTS data series began in 2000.

The restaurants-and-accommodations sector’s job openings rate – which represents job openings as a proportion of total employment – stood at 4.8 percent in April, up from 4.0 percent in February and the highest level since September 2007.  In comparison, the job openings rate in the overall economy was just 3.1 percent in April, which suggests that hospitality businesses are having a more difficult time filling vacancies.  

Restaurant operators confirm that the availability of labor is becoming more of a concern for their business.  In the National Restaurant Association’s May 2014 Tracking Survey, 16 percent of operators said recruiting and retaining employees is the number-one challenge currently facing their business.  This represented the highest level since February 2008, after averaging just five percent of survey respondents during the challenging economic environment of the last five years. 

To be sure, elevated food costs remain the top concern right now, with 22 percent of operators saying high food costs were their top challenge in May.  In addition, the proportion of operators reporting labor availability as their number-one challenge remains well below 2006-2007 levels, when the reading averaged more than 30 percent and consistently topped the list of concerns. 

However, the recent sharp increase in job openings and concerns voiced from a growing number of operators suggest that the restaurant industry’s traditional labor challenges are rapidly returning to the forefront.

Read more from the Economist’s Notebook and get additional analysis of restaurant industry trends on to Restaurant TrendMapper (subscription required).

*Note that the figures presented are for the broadly-defined Accommodations and Food Services sector (NAICS 72), because the Bureau of Labor Statistics does not report data for restaurants alone.

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