The unemployment rate has hit an historical low. Although this is a good thing, this has made it especially difficult for restaurants, especially fast food chains, to hire and retain staff.
Chains with low employee satisfaction suffer the most in a tight labor market.
Wendy’s, Sonic and KFC had some of the lowest staff satisfaction rates in 2017. McDonald’s and Dunkin’s Brands’ rates weren’t that much better either.
Chipotle, a chain still being plagued with its food safety crisis from a few years ago, was also among the brands to see a significant drop in employee satisfaction in 2017.
On this episode of Plugged In below, Host Paul Barron addresses the issues Chipotle has and what the chain can do to reclaim its top spot in fast casual.
But in 2018, this problem will not only persist, but is expected to get much worst.
"One franchisee always quotes, 'I can only get 60% of the labor I need,'" said Nigel Travis, Dunkin Donuts CEO to “Business Insider.”
The turnover rate in the restaurant industry is one of the highest of all job sectors. It has always been difficult to keep reliable employees that are well-suited for their roles.
Not to mention, these jobs are viewed as a short-term option for workers, meaning these employees lack personal investment while working at the restaurant.
To boost employee morale, these chains could increase employee wages. Wages across the industry have increased by 1.5 percent on average, according to a UBS report based on Glassdoor data.
But Chipotle has implemented wage increases, but the fast casual’s employee satisfaction still dropped by 3percent.
Not all brands are suffering from a low employee approval.
“Starbucks, the chain with the highest average pay, has an employee satisfaction ranking of nearly 30% above its competitors. The chain has made significant investments in worker pay and benefits — something that other restaurant chains will need to consider if they want to survive the building restaurant labor crisis,” writes “Business Insider.”
The minimum wage is on the rise. There have been increases on the local level in 18 states.
Profit margins are already slim as a restaurant operator. So we are seeing fast food chains combat that by investing in technology like self-ordering kiosks. This will help to off-set the spike in labor costs.
Read more about the staff shortage in the fast food industry at “Business Insider.”