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The New Tactics of Franchise Employee Retention

Here’s what the restaurant segment should learn from Shake Shack’s $10 million employee-retention plan.

By Justin Wick1851 Franchise Contributor
Updated 10:10AM 07/23/21

Restaurant workers are quitting in record numbers, and many business owners are instituting new compensation plans in an effort to retain employees.

Shake Shack recently announced a plan to invest “more than $10 million” in their workers. And that move may do more for the burger brand than just protect against employee walkouts. 

On Thursday, QSR Magazine’s Ben Coley took a deep dive into Shake Shack’s new employee retention, highlighting how “more than $9 million will go toward increasing wages for hourly workers.

“$1 million will be designated for bonuses upon hiring, while hiring bonuses will also be allocated for employees hired between June 10-August 31,” the article says. Shake Shack will also issue a “monthly subscription allowance” that can cover “things that improve their [employee’s] mental, physical, or emotional well-being.”

Earlier this week, NPR published a column detailing how low wages, no benefits and hostile customers are contributing to restaurant workers leaving the industry. NPR’s Alina Selyukh highlighted how unemployment benefits alone allow some employees to begin saving cash for the first time in their lives.

Resolving employee walkouts can be as simple as upping employee salaries, but there is a difference between paying employees and investing in them.

A “subscription allowance” can ensure employee well-being is prioritized. Getting paid more is a clear way to improve employee morale, but a few strategic incentives can capitalize on that morale and ensure that compensation is directly translated into workplace efforts.

Shake Shack didn’t stop there, either. As mentioned in their QSR feature: “To grow its next crop of leaders, [they] started Shift Up, a career development program for entry-level managers to learn professional and business communications, financial acumen, and leadership skills.” 

Their investment in employees’ personal growth can help answer an age-old question: What happens if you don’t invest in your employees, and they stay?

Some restaurant managers haven’t been able to keep their employees at all, which tips the scale in a different direction. Successful companies are composed of ambitious people, and Shake Shack is helping to pioneer a model that could soon resemble a normal industry-wide practice.