Restaurant industry response to the economic downturn: slower growth, less staff, and smaller paychecks.

PRESS RELEASE: People Report recently conducted a special online survey to learn how restaurant chains are adapting to the current economic downturn, currently and in the near term. The survey, published this week was completed by hundreds of executives, representing 111 distinct chain restaurant companies from all industry segments.

We focused on those measures that are directly related to the human capital element of our businesses and classified them into three categories: 1. those that affect the total number of restaurants operated, 2. those that affect the labor-hours required within each of these restaurants, and 3. those that affect the cash compensation of the industry's unit level managers and employees.

Foodservice companies have clearly been forced to take some measures to face the current situation; 88% of the companies that participated in the survey have either already reduced or expect to reduce their number of units or number of new unit openings, their restaurant staffing levels, or their base salary increases and bonus payouts for restaurant employees. However, as is explained in detail below, the response has relied more on reducing the restaurant chains' expansion plans and cutting the staffing levels than on modifying the compensation practices.

Continue reading article...