How the Best Franchises Keep Their Hourly Workers

Retaining hourly workers is one of the biggest challenges that many QSR brands face these days. When the pandemic broke out, the QSR industry was badly hit as many employees were increasingly wary of working in such a high-risk environment. Along with the stimulus package, this resulted in more job vacancies in the industry than there are job seekers.

According to the US Labor Department data, the restaurant industry is seeing the highest quit rate in two decades despite a general increase in their hourly pay. This shows that simply paying them a higher wage is no longer enough to retain employees. The retention rate of your company depends heavily on your employee satisfaction. Ignoring your hourly workers and not doing anything to keep them in your company inevitably leads to low productivity, decreased sales, high turnover rate, high business costs, and ultimately, a bad reputation. Yes, it can get that bad.

If you're dealing with a high turnover rate, or you've just started your business and want to ensure that all your employees are satisfied with their job, there are certain actions you have to take. Here are several proven methods from the top five QSR brands.

1. Starbucks

Starbucks is known to be one of the QSR brands with a relatively low turnover rate. At only 65%, the popular coffeehouse definitely stands out from other brands that often have turnover rates of more than 100%. How do they achieve this success? By keeping employee engagement at the forefront of their strategies. Let’s dive into some of the ways they make their employees feel appreciated.

Provide Comprehensive Employee Benefits

To start, Starbucks offers comprehensive employee benefits that not only include healthcare and insurance coverage but also vigorously assist their employees in their personal and educational development. Exclusively termed ‘Your Special Blend,’ they make sure to be as inclusive as possible by providing mental health support to those who need it. To them, one’s mental health is just as important as their physical health. 

Starbucks also provides a 401(k) retirement plan for their employees and has a Caring Unites Partners (CUP) Fund to assist those who require financial aid due to unforeseen circumstances. With such benefits, it’s no wonder why employees choose to stay with Starbucks. 

Treat Employees as 'Partners'

Starbucks refers to their hourly employees as ‘partners’ as they feel that they, too, have a share in the company’s success. But it is not just the label that is noteworthy. Their exceptional treatment of employees is apparent in the way they invest in them. Starbucks encourages their partners to continually develop themselves academically through their College Achievement Plan. By showing that they care, employee morale is boosted. And honestly, if you can make your employees love coming to work every day, that’s a sign that you’ve succeeded, right?

2. Jimmy John's

Leverage Technology When Hiring

It’s a no-brainer: technology simplifies our lives in every way possible. And when it comes to hiring employees, this is no exception. Jimmy John’s franchisees use automated hiring tools to recruit the right people for the job. Using features such as job board integrations and smart screening, they are able to not only widen their candidate pool but also filter only those who are the best fit for the job.

By using such hiring tools to hire better, your employees are likely to stay longer with your company. After all, why would you leave when the job is suitable for you?

Such technological tools are also useful after the employee gets hired. With DailyPay, Kensington Hill Capital LLC, one of the franchisees of Jimmy John’s, could provide on-demand pay to their employees. For workers struggling to pay rent or bills on time, this could be a lifesaving bonus as they no longer have to wait for a certain time of the month to cover emergency expenses. 

Prioritizing your employees' needs and using tools to give them practical benefits will always encourage more of your workers to continue working with you. Like Jimmy John’s, you can also leverage technology to provide the best for your employees.

3. Chipotle

Invest Heavily in Employees

When it comes to retaining employees, most often than not, the best QSR brands will have a comprehensive suite of employees’ benefits. Just like Starbucks, Chipotle also offers a good deal of educational and health benefits. In collaboration with Guild, an education and upskilling company, Chipotle offers eligible employees a debt-free educational program. Thanks to this, the QSR brand managed to increase their retention rate by 3.5 times among the students who are part of the program. This is also part of their effort to develop leaders within their company, whether or not they decide to stay with Chipotle.

Aside from the educational benefit, Chipotle also created transparent career paths for their hourly workers. About 70% of their general managers started off as hourly workers. Thanks to the certified training at every level provided by the company, hourly workers can get promoted easily. Those who follow this career path could attain the highest general manager position in just 3.5 years!

Investing in employees is nothing new to Chipotle. To them, every dime they put in their employees counts towards the future of the company. 

Reward Employees

At Chipotle, eligible employees are also entitled to a quarterly bonus of up to an extra month’s pay. To qualify for this bonus, employees need to meet specified goals, including preset sales and cash flow. When the bonus program first kicked off, 2,600 employees qualified in the first few months. This allowed the brand’s turnover rate to decrease at both the management and crew levels. 

Last year, the fast-food chain gave out $6.5 million in discretionary bonuses to employees of various levels amidst the pandemic. This came a week after Chipotle raised their rates for hourly workers by 10% to show their appreciation to those who continued working even during the COVID-19 crisis. In times of financial uncertainty, such actions can foster a sense of loyalty among employees and improve retention rates. 

4. McDonald's

Listen to Employees

Being one of the largest fast-food chains in the world, McDonald’s prides itself in training their employees. They ensure that their workers are not only equipped with the hard skills required for the job but the soft skills as well. This includes the ability to work in a team and having responsibility and responsiveness in the workplace.

What sets their training apart from other companies? Well, McDonald’s training is continuously updated to keep the opinions of the current workforce and employees in mind. For example, the “Workforce Survey'' they regularly conduct helps them better understand what employees value in a job in the long run. The responses they receive, in combination with their employees’ feedback, allow them to incorporate certain valuable skills in their training programs. By doing so, they are able to improve their employee engagement and encourage their workers to stay with the company for a longer time. 

Aside from getting feedback, another step taken by McDonald’s was to increase their hourly wages to over $13/hr. Prioritizing the preferences of employees is important. But as an employer, you would still need to ensure that you are paying your workers enough for the job they do in order to truly retain them. 

5. Shake Shack

Invest Heavily in Employees

Shake Shack is another company that invests heavily in their employees, especially now that the industry is facing a labor crunch. Just this year, the brand announced that they will be putting in more than $10 million in their restaurant-level employees. Most of the fund is going towards their wage increase but it also will be a part of their added hiring bonuses. 

Share Common Values

Cultivating the right culture in your company is essential if you want to retain your hourly workers. Most companies neglect their hourly employees in this aspect and this might just be the reason why the turnover rate is so high among them. 

For Shake Shack, they believe in treating everyone equally regardless of where they are from or how they look. The brand plans on boosting the company’s diversity by aiming for 50% minority representation in leadership positions by 2025. They’re also working towards gender parity as part of their efforts to be more inclusive. 

Undoubtedly, this will retain existing employees and may even increase their popularity among job seekers. Gen Z-ers and millennials make up most of the QSR industry’s hourly employees and this demographic tends to be more passionate when it comes to diversity and inclusion. Since these values are important to them, promoting and practicing such values will likely make them stay since they find it meaningful to work for a company that shares their principles.

Retain Your Hourly Workers

When it comes to hiring (or rehiring), prevention is better than cure. Retaining employees is always better than hiring new ones as the latter will incur unnecessary costs to your business, which could have otherwise been avoided. Though the pandemic may have shaken the foundation of the QSR industry, there is still hope in survival if you treat your employees right. Truth be told, you may even get through another crisis in the future. 

As you would expect, providing basic benefits can no longer be effective if you want to keep your employees. As a franchise owner, consider taking some pointers from the QSR brands above and you might just be able to keep your employee turnover rate low.

If you are looking for a way to hire better and faster, look no further! At Workstream, we have helped over 10,000 hiring managers increase their applicant flow and reduce time-to-hire significantly. Schedule a demo with us today to find out more.