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 restaurants and bars from March to 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 and 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 quit 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 aim, for example, choose to keep their stores closed on Thanksgiving so that employees can stay at home over the holidays. Best buy improved Supplement childcare allowance, and expanded access to care allowance benefits.
For the time being, however, 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, the rising labor costs in recent years have also motivated restaurant chains to invest in automation technology, such as self-ordering kiosks or Artificial intelligence software that can take a drive-through order.
Here are the restaurant chains that increased hourly wages or started offering bonuses this year:
Papa Johns announced on Thursday new hiring, referral, and retention awards for restaurant workers at its company-owned locations. 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 its workers more money instead of permanently changing its wage structure just in case. It will be easier to find employees next year.
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.
MC Donalds said that in May Workers in company restaurants receive pay increases by an average of 10% in the next few 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 Kempczinskiski 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.
End of March, announced the parents of Olive Garden that every hourly employee in their restaurant portfolio earns at least $ 10 an hour, including tips. Hourly wages rise to $ 11 an hour in January and $ 12 an hour the following January.
But Restaurants Darden Executives have said their primary focus is 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 is pays its workers an average of $ 15 an hour after introducing higher wages across their presence in May and June. Starting wages for hourly crew members range from $ 11 to $ 18.
The company also introduced referral awards 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 the biggest challenge facing them is recruiting.
“It has never been so difficult to attract and retain employees. As a result, we also see 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 manager and assistant manager referral program.
“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, P. F. Chang’s is taking steps to improve the work-life balance of its workforce. CEO Damola Adamolekun said Bloomberg that the company gave its employees July 4th off so they could spend the day relaxing and enjoying the holidays.
Despite these efforts, the privately held company still has approximately 2,000 open positions across its entire presence.