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Nearly 40% of restaurants hit the brakes on hiring because of inflation, study finds

A survey found that 4% are even laying off workers because of pay rates and fears of a recession.
help wanted sign
Photograph: Shutterstock

More than a third of the nation’s restaurants are putting their recruitment efforts on hold to protect margins from soaring wage rates, according to a new survey from the Alignable Research Center.

The inflationary pressure is so intense that 4% of establishments are even laying off workers, the researcher found.

Across all small businesses, the chill on hiring is even more pronounced, with 45% freezing their employment rosters because of inflation, compared with the 38% of restaurants that are taking down their Help Wanted signs, according to Alignable.

As in the restaurant category, 4% of the whole small business sector has begun to cut employee head counts.

With federal statistics showing the restaurant industry is still 700,000 workers short of its pre-pandemic employment level, Alignable’s findings could be good news for the foodservice companies that are still in recruitment mode. The hiring pause across small businesses means less pressure to outbid other restaurant operators and employers on wages.

Roughly 1 in 5 small businesses (18%) are paying 25% more in wages than they did pre-pandemic, Alignable discovered.

The recruitment pause also immediately deepens the pool of unhired individuals who are looking for work.

Small businesses are taking themselves out of the scramble to hire workers because they can no longer afford the higher labor costs, Alignable concluded.

But it also noted that the sector is consumed with recessionary fears. In an earlier survey by the researcher, 48% of the canvassed small businesses said they believe the country is already in a recession, and another 32% indicated they expect the U.S. to officially be there by year’s end.

Alignable’s report on small-business hiring is based on surveys conducted with 5,350 employers between May 10 and July 19.

The researcher is part  of Alignable.com, a company that runs an online resource center used by about 7 million small businesses. Its research arm periodically surveys users for a snapshot on their business plans and outlooks.

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