ktaylor@businessinsider.com (Kate Taylor) 13/5/2021
REUTERS/Lucy Nicholson Protesters gather outside McDonald's in 2013.
McDonald's announced on Thursday it is raising workers' pay at all company-owned locations.
Just 5% of McDonald's US locations are owned by the company, meaning 95% will not be impacted.
McDonald's encouraged franchisees to make similar investments "in ways that make the most sense."
McDonald's is raising wages - but only roughly 5% of restaurants will be impacted by the change.
On Thursday, McDonald's announced that it is rolling out pay increases, averaging 10%, at all corporate-owned stores. The increases will shift minimum pay to at least $11 for crew members and at least $15 for managers.
According to the company, the changes will impact more than 36,500 employees. But, what about the rest of the chain's more than 800,000 employees?
Because McDonald's is a franchise, the corporate office only directly controls issues such as hiring, firing, and pay at the roughly 650 company-owned locations in the US. Meanwhile, franchisees dictate pay at McDonald's roughly 13,000 franchise-owned locations in the US.
McDonald's has not signaled that franchisees will be making any similar announcements, though there has been extensive discussion within the system about how best to hire and retain workers.
Read more: McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices
"As we said in our recent System webcast, we encourage all owner/operators to make this same commitment to their restaurant teams in ways that make the most sense for their community, their people, and their long-term growth," McDonald's US president Joe Erlinger said in a message sent Thursday to US employees and franchisees seen by Insider.
Erlinger said in the message that the raises are intended to ensure restaurants are able to compete for employees, as well as recognize employees' hard work.
"Together with our franchisees, we face a challenging hiring environment, and staying ahead means we must constantly renew our commitment to offer one of the leading employment packages in the industry," Erlinger said.
Labor groups, such as the Service Employees International Union-backed Fight for $15 movement, have pushed for a $15 minimum wage and a union at all McDonald's locations. On May 19, McDonald's workers still plan to strike in 15 cities, calling for a $15 minimum wage.
"We know McDonald's can afford to raise pay to $15/hr for every single employee, not just some employees at corporate-owned and operated stores," Fight for $15 said in a statement on Thursday. "We're ready to continue our fight to win $15 for every worker across the country. "
Franchisees say 'one size doesn't fit all' on workers' pay and benefits
The board of the National Owners Association, a group of independent McDonald's franchisees, discussed recent hiring struggles in a letter on Sunday, obtained by Insider. According to the letter, McDonald's has been working with franchisees on how to offer competitive benefits, without a standardized pay raise across the system.
"We want to be the employer of first choice in our industry," the letter reads. "The proposal allows for Owner control and discretion. One size doesn't fit all."
If franchisees invest more in pay and benefits, the letter says, they can balance out the costs in two ways: reducing turnover and raising prices.
"The ability to raise prices is something new," the letter reads. "Our industry has always been competitive, and we have been in a knife fight for years regarding price. That is no longer the case. Now the winning strategy is simply being open and giving fast service. Our competitors are literally not open due to staffing shortages."
Ultimately, the NOA board posits, a "Big Mac will get more expensive." But, right now, customers do aren't phased by price increases, as long as restaurants are actually able to stay open and serve food, the board said.
Franchisees are already adding new incentives as restaurants scramble to staff stores. An organizer with Fight for $15, the SEIU-backed fast-food workers movement, shared a photo with Insider of a $500 signing bonus at a McDonald's restaurant in Fayetteville, North Carolina. Blake Casper, a franchisee in Florida, told Insider he was offering $50 for anyone who was simply willing to come in for an interview.
Casper told Insider in April that he was trying to win over workers with a number of new benefits, including referral programs and signing bonuses. He was also considering raising starting pay from $12 to $13.
"At this point, if we can't keep our drive-thrus moving, then I'll pay $50 for an interview," said Casper.
McDonald's raises minimum pay at corporate-owned stores across the US, as the battle for workers heats up
ktaylor@businessinsider.com (Kate Taylor) 17 hrs ago
McDonald's is going to start paying workers more.
Read the original article on Business Insider
ktaylor@businessinsider.com (Kate Taylor) 17 hrs ago
© Provided by Business Insider McDonald's is raising its minimum wage at company-owned restaurants. Spencer Platt / Getty Images
McDonald's is going to start paying workers more.
The move comes as restaurants struggle to hire workers.
"Together with our franchisees, we face a challenging hiring environment," said executive Joe Erlinger.
McDonald's is raising its minimum wage in corporate-owned stores, as fast-food chains struggle to hire employees.
On Thursday, the fast-food giant announced it is rolling out pay increases at corporate-owned locations, which will shift entry level pay for crew to at least $11 to $17 per hour. The starting range for shift manager will be at least $15 to $20 per hour, based on restaurant location.
According to the company, the pay increases - which have already started and will roll out over the next several months - will boost workers' pay by an average of 10 percent. The company is aiming to hire 10,000 employees in the next three months at company-owned locations.
Ultimately, the company said average hourly pay will reach $15 per hour, using a "market-by-market approach." In a press release, the company said some restaurants have or will reach an average hourly minimum wage of $15 per hour this year, with average hourly wages expected to reach $15 an hour by 2024.
The higher pay will impact employees at corporate-owned locations, which make up roughly 5% of total US restaurants or about 650 locations. At the vast majority of locations, franchisees decide workers' wages, along with other policies related to hiring and firing.
"Together with our franchisees, we face a challenging hiring environment, and staying ahead means we must constantly renew our commitment to offer one of the leading employment packages in the industry," McDonald's US president Joe Erlinger said in a message sent to U.S. employees and franchisees seen by Insider.
"The existing programs at company-owned restaurants, and these moves, are intended to ensure our company-owned restaurants continue competing for the talent we need, while also recognizing the hard work of our crew and managers," Erlinger continued. "Simply put: putting our people first and doing the right thing for them will drive continued growth for our business."
McDonald's executives hinted that the company was considering increasing pay in a recent call with investors, when discussing what CEO Chris Kempczinski called a "very tight labor market."
"We're working through what some changes in our company-owned restaurants might look like from a wages-and-compensation perspective," said Joe Erlinger, the company's US president.
"We think the external environment is right to do this," Erlinger continued. "We think the internal environment is also right to do this. And we think it's actually a great business decision for us."
McDonald's workers recently announced plans to strike in 15 cities on May 19, demanding that employees make a minimum of $15 per hour. The fast-food giant has been a frequent target of the Service Employees International Union-backed Fight for $15 movement since 2012.
"Last year, in the middle of a global pandemic, McDonald's made $5 billion and gave billions to its shareholders - all while workers like me risked our lives to keep stores running for less than $15/hr," Hakim Dumkia, a worker in St. Louis, recently said. "I can't afford to wait any longer for a raise."
"I plan to go on strike to say to McDonald's: don't wait for politicians in Washington to pay us what we need to survive," Dumkia continued. "We supported McDonald's through the pandemic, and now you need to pay us enough to support our families and our communities."
The pressure is on for fast-food giants to raise wages
Employers across the industry are being forced to add new benefits and raise wages as restaurants struggle to hire employees. On Monday, Chipotle - which is not a franchise - announced it is raising wages to an average of $15 per hour. Starbucks announced in December that it would raise its minimum across the US to $15 per hour over the next three years.
In a recent letter to members, the board of independent McDonald's franchisee group National Owners Association wrote that McDonald's has been working with franchisees to discuss how to best retain workers.
Read more: McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices
"We want to be the employer of first choice in our industry," reads the NOA letter, which was obtained by Insider. "The proposal allows for Owner control and discretion. One size doesn't fit all."
The NOA board wrote that higher wages would likely translate to more expensive menu items, a common practice in the restaurant industry.
"Inflation is the flip side to all of these changes," the letter said. "Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive."
Read more:
McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices
There's a simple solution for companies struggling to hire: Pay workers more
A labor shortage is forcing chains like Subway and Dunkin' to cut hours, close dining rooms, and push employees to work harder than ever
On Thursday, the fast-food giant announced it is rolling out pay increases at corporate-owned locations, which will shift entry level pay for crew to at least $11 to $17 per hour. The starting range for shift manager will be at least $15 to $20 per hour, based on restaurant location.
According to the company, the pay increases - which have already started and will roll out over the next several months - will boost workers' pay by an average of 10 percent. The company is aiming to hire 10,000 employees in the next three months at company-owned locations.
Ultimately, the company said average hourly pay will reach $15 per hour, using a "market-by-market approach." In a press release, the company said some restaurants have or will reach an average hourly minimum wage of $15 per hour this year, with average hourly wages expected to reach $15 an hour by 2024.
The higher pay will impact employees at corporate-owned locations, which make up roughly 5% of total US restaurants or about 650 locations. At the vast majority of locations, franchisees decide workers' wages, along with other policies related to hiring and firing.
"Together with our franchisees, we face a challenging hiring environment, and staying ahead means we must constantly renew our commitment to offer one of the leading employment packages in the industry," McDonald's US president Joe Erlinger said in a message sent to U.S. employees and franchisees seen by Insider.
"The existing programs at company-owned restaurants, and these moves, are intended to ensure our company-owned restaurants continue competing for the talent we need, while also recognizing the hard work of our crew and managers," Erlinger continued. "Simply put: putting our people first and doing the right thing for them will drive continued growth for our business."
McDonald's executives hinted that the company was considering increasing pay in a recent call with investors, when discussing what CEO Chris Kempczinski called a "very tight labor market."
"We're working through what some changes in our company-owned restaurants might look like from a wages-and-compensation perspective," said Joe Erlinger, the company's US president.
"We think the external environment is right to do this," Erlinger continued. "We think the internal environment is also right to do this. And we think it's actually a great business decision for us."
McDonald's workers recently announced plans to strike in 15 cities on May 19, demanding that employees make a minimum of $15 per hour. The fast-food giant has been a frequent target of the Service Employees International Union-backed Fight for $15 movement since 2012.
"Last year, in the middle of a global pandemic, McDonald's made $5 billion and gave billions to its shareholders - all while workers like me risked our lives to keep stores running for less than $15/hr," Hakim Dumkia, a worker in St. Louis, recently said. "I can't afford to wait any longer for a raise."
"I plan to go on strike to say to McDonald's: don't wait for politicians in Washington to pay us what we need to survive," Dumkia continued. "We supported McDonald's through the pandemic, and now you need to pay us enough to support our families and our communities."
The pressure is on for fast-food giants to raise wages
Employers across the industry are being forced to add new benefits and raise wages as restaurants struggle to hire employees. On Monday, Chipotle - which is not a franchise - announced it is raising wages to an average of $15 per hour. Starbucks announced in December that it would raise its minimum across the US to $15 per hour over the next three years.
In a recent letter to members, the board of independent McDonald's franchisee group National Owners Association wrote that McDonald's has been working with franchisees to discuss how to best retain workers.
Read more: McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices
"We want to be the employer of first choice in our industry," reads the NOA letter, which was obtained by Insider. "The proposal allows for Owner control and discretion. One size doesn't fit all."
The NOA board wrote that higher wages would likely translate to more expensive menu items, a common practice in the restaurant industry.
"Inflation is the flip side to all of these changes," the letter said. "Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive."
Read more:
McDonald's franchisees blame hiring challenges on unemployment benefits and say an 'inflationary time bomb' will force them to hike Big Mac prices
There's a simple solution for companies struggling to hire: Pay workers more
A labor shortage is forcing chains like Subway and Dunkin' to cut hours, close dining rooms, and push employees to work harder than ever
Some McDonald's investors renew efforts to oust chairman over ex-CEO sexual misconduct investigation
Read the original article on Business Insider
No comments:
Post a Comment