If you're looking for a job that's probably not heading overseas, you might try something in the restaurant industry. It's healthy and hiring.
Privately-held restaurants and other eating places (NAICS code 7225) have experienced nearly 8 percent sales growth over the last 12 months, on average, and they are seeing improved profitability, according to data from Sageworks Inc.
And a recent analysis by the National Restaurant Association determined that hiring in the restaurant industry outpaced overall U.S. job growth by a 2-1 margin during the 12 months ended June 30.
"Overall, restaurants have added more than 575,000 jobs since the employment recovery began in March 2010, with current industry staffing levels standing 193,000 jobs above the pre-recession peak," the group said in a press release.
"These jobs are here to stay; they're real jobs," says H.G. Parsa, a professor at the Rosen College of Hospitality Management at the University of Central Florida.
He says the recent hiring rates aren't surprising, because the restaurant industry is typically the first beneficiary of economic recoveries. Americans use restaurant visits almost like "micro vacations," especially when times are tough, because going out to eat is one of the cheapest ways to get out of the house for a couple of hours, he said.
"So when the economy's recovering, consumers tend to go to spend their money first in the restaurants," he said.
The National Restaurant Association says restaurant industry sales should top $632 billion in 2012, a 3.5 percent increase over 2011 and the third year of what it calls real gains, which will spur the nearly 1 million U.S. restaurants to staff up. The NRA expects the industry to add 1.4 million positions in the next decade, with the fastest-growing jobs including supervisors and servers.
The Bureau of Labor Statistics estimates about 1.3 million new jobs in the leisure and hospitality services industry from 2010 to 2020, for a 1 percent annual hiring rate expected to top that of manufacturing, agriculture, mining and government sectors.
A financial statement analysis by Sageworks of private companies' data shows that restaurants and other eating places have generated 7.85 percent sales growth, on average, over the last 12 months, compared with 4.61 percent growth in 2010 and around 8 percent growth in 2006 and 2007.
Net profit margins have averaged 3.25 percent in the last 12 months, roughly even with 2010 average net margins of 3.48 percent that were the highest since before 2002, Sageworks' data shows.
Through its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1,000 statements a day. Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries. These adjustments are commonly made to private company financials in order to provide a more accurate picture of the companies' operational performance.
Parsa believes that even with increased uncertainty expressed by consumers and businesses in recent months, restaurants will continue to add workers. Parsa's academic research has focused on refuting a commonly cited statistic that 90 percent of restaurants fail in their first year. He puts the figure closer to 30 percent after one year, or 60 percent after three years, which is closer to the Small Business Administration's figures for new firms across all industries.
"Contrary to some people's belief, the last thing people cut out is going out to eat," Parsa said. "Without restaurants, our quality of life suffers... And these jobs cannot be outsourced."
The industry's problem as Parsa sees it, is finding a way to pay "living wages" to more employees than just managers. His current research is focused on how restaurants can pay living wages to a third of employees and remain profitable.
Total payroll costs for private restaurants and eating places in Sageworks' database have ranged from 24 to 26 percent in recent years, compared with 21 to 23 percent for all industries.