Why Is It Getting Harder to Hire in the Restaurant Industry?

Consumer spending is up, which means more people are eating out and employers can't find workers fast enough.

The economy is steadily improving and today, more people have discretionary income to spend on leisure, travel, or eating out—and this rise in consumer demand has resulted in thousands of new job openings in food service and hospitality. The increase in job opportunities in this sector has contributed to the low unemployment rate in the US, down to 5.1%. But for employers, it has become more challenging to find enough workers to meet their needs.

With food service industry payroll growth consistently expanding faster than that of the overall labor market for the past five years, major corporations are offering benefit plans to attract more applicants. And in some cases, it’s been working.

In 2014, Starbucks announced their College Achievement Plan—a program that would cover the cost of their employees to attend Arizona State University. Two days later, the coffee giant saw an 80% increase in job search volume from the previous week. And, more than 1,800 employees signed up for the online courses within a month of the announcement. This year, Starbucks expanded the program, with a commitment of $250 million to guarantee that all full-time and part-time employees can attend four years of college.

In the same vein, Chipotle announced a paid vacation and tuition reimbursement plan, as well as a statement that they would be hiring 4,000 employees in a single day.

But despite these efforts to attract candidates with new benefits, the industry on the whole isn’t drawing in enough people to meet demand. According to Indeed data, job seeker interest in the fast food industry was at 75% of employer demand in 2013. This year, the job seeker interest dropped further to just over 50% what is needed for equilibrium with employer demand for workers.

As The Washington Post’s Wonkblog recently noted, “If the trend continues, it will only be a matter of time before the problem spills out into the public, slowing service, deteriorating meal quality and, perhaps, forcing restaurants to close their doors.”

The takeaway

A more robust economy has enabled job seekers to be more selective about the opportunities they pursue. And benefits may no longer be enough to attract candidates.

Salary data from Indeed shows that wages for select job titles in the industry have declined since 2013, even as demand for workers has increased. Although some of this decline may have been offset with an increase in benefits, wages will likely need to increase in order to bring in more workers to the industry.