An Olive Garden restaurant in Times Square in New York.
Richard Levine | Corbis | Getty Images
As bars and restaurants struggle to recruit, several large restaurant chains have announced higher wages to encourage workers to apply and stay.
Food and beverage outlets created more than half a million jobs from March to June, according to the Ministry of Labor. But the industry’s unemployment rate remains high, reaching 10% in June, down from 9% the previous month. And the warmer weather usually results in a higher demand for restaurant meals anyway, putting more pressure on employers to increase their workforce.
Enrique Lopezlira, director of the low-wage work program at the Labor Center at the University of California at Berkeley, said lack of access to child care and safety concerns prevent many workers from working , especially women.
“Raising wages is a good thing and it will attract workers, but we are also seeing in the data higher quit rates in these jobs,” Lopezlira said. “In the long run, I think these employers need to improve the overall quality of these jobs.”
Some retailers and restaurants have tried to take steps to achieve this. Walmart and Target, for example, choose to keep their stores closed on Thanksgiving Day so employees can stay home during the holidays. Best Buy has improved alternative child care benefits and expanded access to caregiver compensation benefits.
However, most companies are sticking to raising wages or offering bonuses for now. In June, average hourly earnings were up 0.3% in all industries from the previous month and 3.6% from the same period last year, according to the Labor Ministry.
On the other hand, rising labor costs in recent years have also prompted restaurant chains to invest in automation technology, such as order kiosks or artificial intelligence software that can take a steering wheel control.
Here are the restaurant chains that have increased their hourly wages this year or have started offering bonuses:
Papa John’s on Thursday announced new hiring, referral and retention bonuses for restaurant workers at its company-owned establishments. Company employees will earn an additional $ 50 for each new worker they bring into the fold, while new hires will also earn $ 50. Existing employees are also entitled to appreciation bonuses of up to $ 400, paid in increments for the remainder of the year.
The pizza chain plans to spend around $ 2.5 million on the initiative for the remainder of 2021. Although the price is high, the granting of bonuses allows the company to temporarily give more money to its customers. employees instead of permanently changing their salary structure, just in case finding employees is easier next year.
Approximately 14,000 Papa John’s employees will be eligible for the new bonus program. About 18% of the chain’s North American restaurants are company-operated rather than franchisees.
McDonald’s said in May that workers at company-owned restaurants would see wage increases of 10% on average over the next few months. Entry-level employees will earn $ 11 to $ 17 an hour, and shift managers will earn $ 15 to $ 20 an hour, depending on location. By 2024 – about a dozen years after chain employees started the fight for $ 15 – she plans to pay employees at company-owned restaurants $ 15 an hour.
“I think what’s going on is you see that a good economy is very helpful in increasing employee wages, and I think a lot of the changes that are happening from a wage perspective are happening because that companies like McDonald’s have to compete for the best talent, ”CEO Chris Kempczinski told CNBC’s Evolve conference in June.
However, only about 5% of the company’s US restaurants are owned by the company. This means that for the remaining 95% of the locations in its home market, salaries are determined by the franchisee who operates the restaurant.
In late March, parent company Olive Garden announced that each hourly worker in its restaurant portfolio would earn at least $ 10 an hour, including tips. In January, the hourly wage will drop to $ 11 and the following January, it will drop to $ 12 an hour.
But executives at Darden Restaurants have said they are focusing more on keeping the salary slant, despite President Joe Biden’s pledge to eliminate it. In 43 states, employers can pay their workers as little as $ 2.13 an hour as long as that hourly wage and tips are added to the local pay floor. If Biden is successful, employers should pay each worker at least $ 15 an hour, even if they receive tips.
Mexican Grill Chipotle
Chipotle Mexican Grill pays its employees an average of $ 15 an hour after rolling out higher wages to its footprint in May and June. Starting salaries for hourly crew members range between $ 11 and $ 18.
The company has also introduced referral bonuses of $ 200 for crew members and $ 750 for apprentices or general managers to help it meet its goal of recruiting 20,000 new employees for the summer. .
Executives said customers would pay around 4% more for their burritos and tacos due to rising wages.
Executives at Texas Roadhouse said during the company’s last earnings call in April that the biggest challenge they face is staffing.
“Attracting and retaining employees has never been so difficult. As a result, we are also seeing wage rate increases to stay competitive,” CEO Gerald Morgan told analysts at the time.
To offset costs associated with increased employee compensation, the company increased menu prices by 1.75%.
BurgerFi recently implemented a referral program for managers and assistant managers.
“We absolutely have to compete in the talent market,” CEO Julio Ramirez said in an interview. “But I think we also have some unique advantages because of our position as a growth brand and our cool image.”
The hamburger chain went public in December through a merger with a specialist acquisition company. Ramirez said the company also offers restricted stock units to restaurant managers and assistant managers.
“If we grow and our stock price goes up, everyone wins,” he said.
The Asian-inspired restaurant chain is offering referral bonuses. In addition, PF Chang’s is taking steps to improve the work-life balance of its staff. CEO Damola Adamolekun told Bloomberg that the company gave its employees time off on July 4 so they could spend the day relaxing and enjoying the holidays.
Despite these efforts, the private company still has around 2,000 vacant positions in its territory.