7b supp
Item Number: _7b_Exhibit A Date of Meeting: September 11, 2014 Employment in Airport Dining and Retail An Overview Staff Briefing September 2014 Body of Knowledge Overview Job Quality: 2013 Employer Survey (part I) 2014 Employer Survey (part II) 2014 Employer Interviews Employment Continuity: Employment Growth 2011 Stakeholder Involvement Practices at Other U.S. Airports Airport Dining and Retail Employees Estimated total employees: 1,640 Hiring spikes in summer 58% of employees represented 83% employed full-time Average tenure is 5.97 years Average annual turnover 10-20% Average 40% non-native English speakers Employee Workplace Employment by Operation Majority of Coffee 3% employees work in 5% 14% Full-Service Dining food service Quick Serve 25% Most have direct 26% Retail/Duty Free interactions with customers 27% Passenger Services Support 4 Employee Responsibilities Vast majority of employees have secure access only Background check, TSA threat assessment No security training required TSA allows only 25% of employees per location to access restricted areas Storage units Garbage, recycle, etc. Approximately 83 with airfield (AOA) access Deliveries to satellites, etc. 5 Job Quality Employee Wages & Tips Nearly all non-managerial employees make less than $15 in hourly wages Weighted average wage $11.16 per hour Many employees receive tips, sales commissions and/or bonuses Tips/commissions range between $2 and $40 per hour Significant tip income for servers and bartenders Employee Tenure Restaurant Tenure Rates (Non-Airport) Average airport tenure is Type of Position Average significantly longer than off- Tenure airport counterparts: Chefs/Head Cooks 5.40 years Hourly Cooks 3.32 years Full-service: 5.9 years Servers 3.35 years Quick Service: 4.9 years Bartenders 3.68 years Retail: 5.9 years Entry Level Kitchen 2.36 years Entry Level Front of House 1.77 years Quick Service Shift Lead 3.66 years Quick Service Crew Member 2.66 years Source: Washington Restaurant Association member survey, 2013-14 Airport Dining & Retail Employers More than 35 employers Prime operators: HMSHost, Hudson, Dufry largest employers Tenancy between less than one year and 51 years Employ between 11 to 600 individuals Nearly all employers offer benefits in addition to wages Most common recruitment tool is employee referrals Employer 'poaching' commonplace Competition between employers leads to job quality gains Prime Employer Wages & Tips Weighted non-managerial average wage: $11.25/hr Weighted average non-managerial medical: $4.41/hr Tips in food service range: $20-25/hr or more Sales commissions range: $2 - $14/hr Independent Employer Wages & Tips Weighted non-managerial average wage: $10.72/hr Weighted average non-managerial medical: $2.32/hr Tips in food service range: $3.75 - $6.50/hr Average sales commissions: $5/hr Program Employer Benefits 89% of employers provide paid vacation/paid time off 82% provide paid/subsidized medical benefits 64% of employers offer a retirement plan (401K or pension) Weighted average benefit cost $4.17 per hour Most employers provide free or discounted meals or merchandise Many employers pay for bus passes or airport parking Locally Owned and Operated Bigfoot Food & Sprits Manchu Wok1 Beecher's Cheese Massage Bar Butter London McDonalds1, 2 Coffee Bean & Tea Leaf1, 2 Metsker Maps Dilettante Diva Espresso1 Pallino Pastaria Emilie Sloan Planewear2 ExOfficio Quiznos1, 2 Firehouse Express Sub Pop Records Fireworks Ventures Great American Bagel Waji's2 Bakery1, The Wishing Stone2 Ivar's Seafood Bar La Pisa Caf 1 - Local franchises 2 - No City of Seattle operations Comparison with City of Seattle Airport Large Employers: Prime/Represented Current Year Airport Wage Airport Wage w/ Medical average prime employer 2014 $11.25 $15.66 wages and Year Seattle Minimum Wage Seattle Minimum Wage w/ benefits Medical exceed the 2015 $11.00 $11.00 Seattle ordinance 2016 $13.00 $12.50 requirements in 2015 2017 $15.00 $13.50 2018 (CPI) $15.00 Comparison with City of Seattle Airport Small Employers: Non-Represented Year Airport Wage Airport Wage w/ Medical Current average wage 2014 $10.72 $13.02 and benefits exceed the Year Seattle Minimum Wage Seattle Minimum Wage Seattle w/Medical ordinance 2015 $10.00 $11.00 requirements 2016 $10.50 $12.00 in 2015 2017 $11.00 $13.00 2018 $11.50 $14.00 2019 $12.00 $15.00 2020 $13.50 (CPI) 2021 $15.00 (CPI) Development & Advancement Most employers provide development opportunities: Tuition reimbursement Internal training curriculums Airport University accommodation Entry-level skill training (e.g. cash register, cash counting, customer service) Many have robust internal advancement ladders Prime employees move within airport or to other airports Local independent employees move between airport and street locations Job Quality Summary Employees key to positive customer service experiences Average employee tenure exceeds off-airport industry standards Employee turnover is much less than off-airport Current average wages and benefits exceed future City of Seattle wage ordinance Increased competition provides opportunity for job quality gains Employment Continuity Employment Growth Competition and diversity of Employment operators has stimulated 1800 1,640 employment growth 1600 1400 Square footage growth has led 1200 to more employment 1000 800 732 Expansion of full-service 600 dining has created the most 400 employment per square foot 200 No evidence of job loss when 0 2003 2013 operators transition 124% Growth Stakeholder Engagement Employment continuity issue at the forefront since 2011 Multiple meetings in June - November 2011 Included all types of operators (current and potential), airlines, and labor representatives Stakeholders clearly polarized on potential Port policy Stakeholder Viewpoints Strong support for hybrid management model Labor seeks a maximum of 2-3 prime operators with 90% of employees Local business believes they should receive the majority of opportunities Labor seeks mandatory worker retention and labor harmony policies Small/independent business does not want a mandatory hiring policy Policies at Other Major U.S. Airports Of the top 44* U.S. airports, 34 have no continuity/retention policies Ten U.S. airports have mandatory worker retention policies Predominately California airports Nearly all operate with large primes or developers Some airports have labor harmony policies with or without worker retention *Canadian airports represent the remainder of the top 50 airports in North America Structures for Employee Continuity Location/Contract Specific Retention Impractical if locations/contracts change Employee Pool Approach Works best when transitioning among multiple employers Proven generally successful in San Diego and Phoenix Lessons learned can improve future programs Possible Implementation Options San Diego/Phoenix: Mandatory hiring from pool, exemptions allowed for specialist expertise Detroit: New operators required to interview current employees Sacramento: Incumbent employers required to provide employee information. New operators commit to give priority consideration via offers to interview Growth Supports Employment Continuity 2500 2,296 Anticipated growth will Target 40% create new opportunity 2000 growth 1,640 Growth will drive operator demand for 1500 experienced employees Employees 1000 Increased emphasis on 732 full-service dining will 500 create more and higher paying jobs 0 2003 2013 2025 Employment Continuity Summary Continuity Pool best solution for a changing program Can help employers identify qualified employees Can create greater sense of security for current employees Requirement to only hire incumbent employees may deter independent (local and/or small) operators Anticipated growth will generate new job opportunities beyond what exists today
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