Monday, October 1, 2018

Fewer Teens Working in Foodservice Puts Cost Pressure with Low Skilled Labor Force

An interesting read in Nation's Restaurant News regarding the decrease of teens working in foodservice. We have all seen the Help Wanted signs in nearly every restaurant we visit. This continued trend of less teens working in foodservice jobs puts cost pressure on all who hire low skill-level workers, including food processing.

"Participation has declined over the years, but even as recently as 2000, over 50 percent of teens participated in the workforce. Today that number is around 30 percent. The BLS [Bureau of Labor Statistics] expects the downward trend to continue."

To fill their needs, foodservice is turning to older workers. The "average age of a fast-food employee is 24 years old." "At this point, only 18 percent of restaurant-level employees at limited-service brands are younger than 18 years old, according to Tdn2K. At full-service brands, only 5 percent."
This puts costing pressure on not just foodservice, but any companies that are hiring low skilled workers. "As employees became more mature, Service Employees International Union and the Fight for $15 stepped in to organize employees and work toward higher wages. So far, they’ve seen a fair share of successes. Wages for fast-food workers are on their way to $15 an hour in New York, California, Seattle, Minneapolis and Washington, D.C."

Hiring is not the only concern, so is retention.  "According to restaurant analytics firm TDn2K, the latest turnover numbers for the restaurant-level employees is 124 percent for limited-service brands and 100 percent for full-service."

Nation's Restaurant News
https://www.nrn.com/workforce/loving-and-losing-teen-labor?NL=NRN-02_
On loving and losing teen labor
How teens helped define fast food, and where the industry is without them
Gloria Dawson | Sep 28, 2018

Selected pieces below, full article - https://www.nrn.com/workforce/loving-and-losing-teen-labor?NL=NRN-02_

For decades, fast-food restaurants relied on teenagers to take orders, flip burgers and generally run much of the day-to-day operations of the restaurant. Working with teens had its benefits and problems, but the cost benefits couldn’t be denied.

But today, teenagers’ lives have become increasingly complicated and loaded with pressures.

For many young people, traditional fast-food restaurants no longer appeal to them as a job opportunity.

While some fast-food brands have found ways to keep teenagers excited about positions at their restaurants, many struggle with the new reality.
.......
“Fast food has always relied on the lowest possible cost of service,” said Rosemary Batt, a professor at Cornell University’s School of Industrial and Labor Relations.

Fast-food restaurants could pay teens less than adults with the understanding that they were not raising a family.

“They view teens as kind of earning what we used to call pin money, supplemental income for incidentals,” said Batt.

The arrangement between fast-food workers and teens was often mutually beneficial. Teens were generally available part-time and over the summers, which was perfect for the dinner rush and high-volume warmer months.

And teens are often energetic and able to perform restaurant work, which can be physically demanding, said Jerry Newman, a professor of organization and human resources at the School of Management, University at Buffalo.

Teen labor, defined as 16-to-19-year-olds by the Bureau of Labor Statistics (BLS), reached its peak in 1979 with over 57 percent of teens in the labor force. Participation has declined over the years, but even as recently as 2000, over 50 percent of teens participated in the workforce. Today that number is around 30 percent. The BLS expects the downward trend to continue.

......

At this point, only 18 percent of restaurant-level employees at limited-service brands are younger than 18 years old, according to Tdn2K. At full-service brands, only 5 percent.

Whether fast-food brands moved away from hiring teens out of necessity or desire, these older employees have different needs — health care, days off, income that wasn’t for incidentals.

“These individuals are working there with some continuity, they talk to each other, they express dissatisfaction,” said Newman.
......

As employees became more mature, Service Employees International Union and the Fight for $15 stepped in to organize employees and work toward higher wages. So far, they’ve seen a fair share of successes. Wages for fast-food workers are on their way to $15 an hour in New York, California, Seattle, Minneapolis and Washington, D.C. Their efforts have brought to light workers’ limited bargaining power and low wages.

With a rise in wages, higher prices might be passed on to consumers, as has been seen in cities that have made wage increases but, Batt argued, these prices will be small and palatable, particularly if the increases happen over time. The wage increases would help with employee retention.

“The idea is that you invest in the workforce that you have, and you reduce turnover, so you don’t have to go on the labor market as often,” she said.

According to restaurant analytics firm TDn2K, the latest turnover numbers for the restaurant-level employees is 124 percent for limited-service brands and 100 percent for full-service.

To illustrate that simply, if you had 50 workers at the start of the year, all of them will have quit by the end. Some of their replacements will have quit, too, if you’re a limited-service brand.

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