Chipotle to hike wages, debut referral bonuses amid tight labor market
Customers order at a chipotle restaurant in the King of Prussia Mall in King of Prussia, Pennsylvania.
Mark Makela | Reuters
As the job market warms, Chipotle Mexican Grill announced Monday that wages for restaurant workers will rise, averaging $ 15 an hour by the end of June.
The company also introduced employee referral awards of $ 200 for crew members and $ 750 for trainees or directors to help attract 20,000 new employees nationwide for peak season and new restaurant openings.
The salary increase for new and existing restaurant workers, both hourly and as clerk, will be rolled out in the next few weeks. Hourly occupation wages start in the range of $ 11 to $ 18 an hour. There are also opportunities in just 3½ years to advance to a restaurateur position who is the highest ranking general manager with an average annual salary of $ 100,000, Chipotle said.
In an interview with CNBC, Chipotle CEO Brian Niccol said the current job market is one of the biggest challenges he has seen in his career in the restaurant industry. In this environment, the company hopes to convey the brand’s growth opportunities.
“We share with people that right now it’s not just a job, it is actually a job that can lead to a meaningful career,” Niccol said, as workers are picky about job opportunities and are re-evaluating work after the pandemic.
“I’m glad we are a company that has the growth and frankly the power to raise wages and talk more about how the job leads to your future growth at our company,” he said.
Feedback from human resources managers has pointed to a variety of reasons for job search challenges beyond stimulus money, including uncertainty about school schedules, childcare, and more. The company is confident it can hire the workforce it needs to support growth.
Chipotle gets creative with its hiring initiatives. A virtual career fair will be held on Thursday on Discord, the social platform, which includes sessions with current employees. Other Chipotle benefits include mental health care and 401 (k) plans, as well as debt-free degrees for workers after 120 days from nonprofit, accredited universities in partnership with Guild Education.
“We challenge ourselves to be on the platforms and in the places our customers are – as well as young people who I think are genuinely interested in the opportunity to work at Chipotle,” said Niccol .
A tight labor market hits companies across the industry, forcing many to step up their recruiting efforts.
McDonald’s held hiring events last month to fill 25,000 jobs in Texas after 260,000 people were hired when restaurants reopened to eat last year. The company shares its hiring practices across markets and has just hosted a webcast to discuss staffing best practices. Owners and operators use various programs to recruit locally from salary incentives, including appreciation, sign-up and referral bonuses, and benefits such as offering paid time off.
IHOP, owned by Dine Brands, plans to hire 10,000 full-time and part-time employees. Yum Brand’s Taco Bell also held nationwide hiring parties in April to try to hire 5,000 workers.
A tight labor market affects companies large and small. The Chamber of Commerce on Friday called for an end to the unemployment benefit hike, claiming the wage hike was putting a strain on the labor market.
The National Federation of Independent Business said 44% of small business owners had roles they couldn’t fill in April. This was a record high for a third straight month. NFIB chief economist Bill Dunkelberg said in a statement that some owners are even offering “show-up” bonuses for those who are hired and sign up for their new job.
Ray Keating, chief economist at Small Business & Entrepreneurship Council, said the labor shortage was about much more than just improving unemployment benefits – there was uncertainty about childcare, health concerns, and an increase in personal savings due to incentives that may some Workers buy time.
“I think there is a big re-evaluation of the way we work and where we work on both the business and individual side,” he said of the change in life over the past year due to the pandemic.
Companies are also finding that the talent crisis is affecting business beyond their own restaurant operations. Charlie Morrison, CEO of Wingstop, said labor is a factor in the chicken supply chain, which in part is leading to the persistent shortage.
“The pandemic has made it difficult to employ plants to slaughter enough chickens to meet market demands,” he said in an interview.
Papa John’s hired 30,000 workers during the pandemic. CEO Rob Lynch said the company is working to keep them but sees supply availability and labor shortages go hand in hand.
“The supply of raw materials was a challenge, and it is based at least on what our suppliers have said, especially the lack of manpower to process the materials,” he said, citing chicken wings as an example.