An Olive Garden restaurant in Times Square in New York.
Richard Levine | Corbis | Getty Images
With bars and restaurants struggling to find staff, several large restaurant chains have announced higher wages to encourage workers to apply and stay.
According to the Ministry of Labor, more than half a million jobs were created in places to eat and drink between March and June. The unemployment rate for the industry remains high, however, reaching 10% in June compared to 9% in the previous month. And warmer weather usually leads to higher demand for restaurant meals anyway, which increases pressure on employers to increase their workforce.
Enrique Lopezlira, the director of the low-wage work program at the University of California’s Berkeley Labor Center, said the lack of access to childcare and safety concerns keep many workers, especially women, from working life.
“Raising wages is good and will attract workers, but we are also seeing higher quitting rates in these jobs in the data,” said Lopezlira. “In the long term, I think these employers need to improve the overall quality of these jobs.”
Some retailers and restaurants have tried to do just that. Walmart and Target, for example, choose to keep their stores closed on Thanksgiving so employees can stay home over the holidays. Best Buy improved additional childcare services and expanded access to caregiver services.
However, for the time being, most companies stick to just raising wages or offering bonuses. According to the Ministry of Labor, the average hourly wage in June in all sectors rose by 0.3% compared to the previous month and by 3.6% compared to the same point in time last year.
On the other hand, rising labor costs in recent years have also motivated restaurant chains to invest in automation technology, such as self-ordering kiosks or software for artificial intelligence that can accept a drive-thru order.
Here are the restaurant chains that increased hourly wages or started offering bonuses this year:
Papa John’s announced new hiring, referral, and retention awards for restaurant workers at its company-owned locations on Thursday. Company employees earn an additional $ 50 for each new employee they hire, while the new hires also earn $ 50. Existing employees are also entitled to up to $ 400 in recognition awards, which are gradually paid out over the remainder of the year.
The pizza chain plans to spend about $ 2.5 million on the initiative for the remainder of 2021. While this is a high price to pay, giving bonuses allows the company to temporarily give more money to its employees rather than permanently changing its pay structure just in case. Next year it will be easier to find employees.
Approximately 14,000 Papa John employees will be eligible for the new loyalty program. Approximately 18% of the chain’s North American restaurants are owned by the company rather than by franchisees.
McDonald’s said in May that workers at company-owned restaurants will see pay increases averaging 10% over the next several months. Beginners earn $ 11 to $ 17 an hour, depending on their location, and shift supervisors $ 15 to $ 20 an hour. By 2024 – about a dozen years after the chain’s workers started the $ 15 battle – it plans to pay company restaurant employees $ 15 an hour.
“I think what happens is you see that having a great economy is very helpful in increasing employee wages, and I think a lot of the changes that come from a wage perspective are because Companies like McDonald’s have to compete for the best. ” Talent, “said CEO Chris Kempczinski at 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 the home market, the wages are determined by the franchisee who runs the restaurant.
In late March, Olive Garden’s parent company announced that every hour worker in its restaurant portfolio will make at least $ 10 an hour, including tips. Hourly wages rise to $ 11 an hour in January and $ 12 an hour the following January.
But Darden Restaurants executives have said they are focusing more on keeping the tip, despite President Joe Biden’s pledge to abolish it. In 43 states, employers can only pay their workers $ 2.13 an hour as long as the hourly wage and tip are within the local minimum wage limit. If Biden succeeds, employers would have to pay each worker at least $ 15 an hour, even if they are tipsy.
Chipotle Mexican Grill
Chipotle Mexican Grill pays its workers an average of $ 15 an hour after introducing higher wages in its presence in May and June. Starting wages for hourly crew members range from $ 11 to $ 18.
The company also introduced referral rewards of $ 200 for crew members and $ 750 for apprentices or directors to help meet its hiring target of 20,000 new employees for the summer.
Executives said customers will pay about 4% more for their burritos and tacos because of the wage increase.
Texas Roadhouse executives said on the company’s most recent conference call in April that their biggest challenge is recruiting.
“It has never been so difficult to attract and retain employees. As a result, we are also seeing wage increases in order to remain competitive, ”CEO Gerald Morgan told analysts at the time.
To offset the cost of higher employee pay, the company increased menu prices by 1.75%.
BurgerFi recently launched a referral program for managers and deputy managers.
“We definitely have to compete for talent in the market,” said CEO Julio Ramirez in an interview. “But I think we also have some unique advantages due to our situation as a growth brand and our cool image.”
The burger chain went public in December through a merger with a special purpose vehicle. Ramirez said the company also offers restricted inventory units to restaurant managers and deputy managers.
“If we grow and our share price goes up, everyone wins,” he said.
The Asian-inspired restaurant chain offers referral bonuses. In addition, PF Chang’s is taking steps to improve the work-life balance of its workforce. CEO Damola Adamolekun told Bloomberg that the company gave its employees July 4th off so they could spend the day relaxing and enjoying the vacation.
Despite these efforts, the privately held company still has approximately 2,000 open positions across its entire presence.