Workforce Index Q1 2010

PEOPLE REPORT Q1

10

Most companies maintaining current employment levels

Recruiting difficulty increases to highest level since Q4 08

Decreasing number of vacancies

Highest Employee Expectations since Q3 08

Turnover pressure remains minimal

The People Report Workforce Index (WFI), a quarterly barometer of market pressures on employment measures, registered an overall reading of 48.3 for the 1st Quarter of 2010. While the overall index reading remains below 50 (indicating a reduction in industry employment pressures), this does mark the highest reading since the 4th Quarter of 2008 (51.3).

Q1 10 People Report Workforce Index

Overall WFI

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

80.0

Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10

Overall Quick Service Fast Casual/Family Dining Casual Dining Upscale Casual/Fine Dining

•While most operators would like to forget about 2009, it is important to note that industry comp sales, while still negative, were trending upwards towards the end of the year, with the top quartile reporting positive sales according to industry analysis by People Report’s sister company, Black Box Intelligence. Generating traffic and sales remains a challenge while news of economic gloom lingers, but it appears as though the seeds of a slow, impending recovery have begun to take root.

•The Employment Expectations component of the People Report Workforce Index registered a value of 61.9, with all segments expecting an increase in payrolls during the first three months of 2010. This the highest level for this component since before the economic collapse in the fall of 2008.

The overall Index reading for the Quick Service segment increased for

the third consecutive quarter in Q1, shooting up six points to 53.6

The overall Index reading for Fast Casual/Family Dining once again

remained relatively flat in Q1, registering a value of 43.3

The overall Index reading for Casual Dining jumped six points in Q1 to 48.1

The overall Index reading for Fine Dining/High Volume rose three points in Q1 to 48.0---the segment’s highest reading since Q3 08

Do you expect the number of unit level employees at your company to increase, stay the same, or decrease for the following position levels in

Q1 10 when compared to Q4 09?

Hourly Management

Increase 36% 31%

Stay the same 52% 59%

Decrease 11% 10%

Employment Expectations

Employment Expectations

30.0

40.0

50.0

60.0

70.0

80.0

90.0



•Since bottoming out in Q1 09, Employment Expectations have slowly risen for all industry segments and are now at levels not seen the economic meltdown of 2008.

Did the number of unit level employees at your company increase, stay the same, or decrease for the following position

levels in Q4 09 when compared to Q3 09?

Hourly Management

Increase 25% 25%


Decrease 25% 18%

Employment Levels

Employment Levels

30.0

40.0

50.0

60.0

70.0

80.0

90.0



•Employment Levels have dropped significantly since Q3 08, but staffing cuts appear to have abated and most companies are maintaining their current staffing levels or cautiously adding staff.

Did the labor market conditions make it more or less difficult to recruit qualified unit level employees to fill positions at the

following levels in Q4 09 when compared to Q3 09?

Hourly Management

Increase 12% 20%


Decrease 28% 29%

Recruiting Difficulty

Recruiting Difficulty

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0



•Recruiting Difficulty is trending upwards for the first time since Q3 08.

How did the number of unit level vacancies at your company change in Q4 09 when compared to Q3 09?

Hourly Management

Increase 8% 13%


Decrease 34% 25%

Vacancies

Vacancies

20.0

30.0

40.0

50.0

60.0

70.0

80.0



•Vacancies have been gradually increasing since hitting bottom in Q2 09.

Did your company's turnover increase, stay the same, or decrease for the following position levels in Q3 09 when

compared to Q2 09?

Hourly Management

Increase 13% 33%


Decrease 82% 41%

Turnover

Change in 12-Month Management Turnover

Segment Change

Quick Service +1%

Fast Casual/Family Dining -3%

Casual Dining -4%

Upscale Casual/Fine Dining -2%

Segment Change

Quick Service -29%

Fast Casual/Family Dining -27%

Casual Dining -22%

Upscale Casual/Fine Dining -16%

Change in 12-Month Hourly Employee Turnover

Turnover

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0



•Turnover pressures remain extremely low as unemployment continues to rise.

We’re throwing a party…

and you’re

invited!!!

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Workforce Index Q1 2010

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