A ‘New Normal’ Emerges As Restaurants Jockey for Workers

It’s been a tough year for the restaurant industry. From furloughing workers amid COVID-19 related closures to pivoting to takeout and delivery models, reopening at reduced capacity to dealing with ketchup shortages and rising food costs, restaurants just can’t seem to catch a break. 

Now, as restaurants across the country finally reopen at full capacity to meet unprecedented demand, what should be a reason to celebrate is yet another nightmare: Enter the era of the restaurant worker labor shortage.

As restaurants compete for workers, they’re courting them in new ways, offering substantial sign-on bonuses and increased wages. 

In May, McDonald’s announced they would increase worker wages at company-owned restaurants by an average of 10%.

“Our first value is taking care of our people, and today we are rewarding our hardworking employees in McDonald-owned restaurants for serving our communities,” said McDonald’s USA President Joe Erlinger in the press release. “These actions further our commitment to offering one of the leading pay and benefits packages in the industry.”

Earlier this month, Papa John’s announced new hiring, referral and appreciation bonuses for its approximately 14,000 front-line team members in the company’s corporate restaurants and supply chain. The program includes $50 referral bonuses for corporate team members for every new hire they bring in, with an additional $50 bonus paid to the new team member. Existing corporate team members are also eligible for $400 in appreciation bonuses. 

The company also announced expanded health, wellness, paid time off and college tuition benefits as they “strive to be the employer of choice within our dynamic industry,” the press release said.

While the federal minimum wage remains dismally low at $7.25 an hour, demand for staff pushed restaurant worker wages up 7.9% in June from their pre-pandemic level, according to the most recent jobs report. 

Chipotle Mexican Grill has raised its workers’ pay to an average of $15 an hour, Olive Garden topped that at more than $17 per hour and some Subway franchises are offering workers sign-on bonuses of up to $1,000.

Meanwhile, labor advocacy group One Fair Wage has created a new relief fund to encourage workers to remain in the industry with grants of up to $1,200.

While the COVID-19 pandemic caused many restaurant workers to reexamine their careers, the restaurant industry is hoping wage increases and other perks will be enough to entice new workers and retain existing ones. 

“The incredible hard work and commitment of our team members, which powered Papa John’s tremendous performance and transformation over the past 18 months, is just as important to our sustained long-term growth,” said Papa John’s CEO Rob Lynch in the July 8 press release.  “Similar to programs being offered by our franchisees, these new bonuses for our team members in our corporate restaurants and QCCs reflect the value we place on growing, retaining and supporting our dedicated team.