McDonald’s to offer child care and other new benefits to employees

McDonald’s franchisees across the U.S. are adding emergency child care and other new benefits to help keep current employees and attract new ones as many restaurants continue to struggle to hire enough workers to run their businesses.

Caregiver benefits have become popular among companies during the coronavirus (COVID-19) pandemic as employers seek to compete in a tight labor market.

The company is also aiming to boost hourly pay, give workers paid time off and help cover tuition costs. A company spokesperson told CBS News in an email that the move not only helps restaurant employees but also helps the company attract and retain talent.

Golden Arches, the corporate parent of McDonald’s, is making a multimillion-dollar investment to back the efforts of franchisees who own 95 percent of the chain’s roughly 13,450 stores nationwide.

Workers are leaving restaurant industry

Many restaurant workers left the industry last year for other jobs. The rate of restaurant and hotel workers leaving their jobs hit a two-decade high in April and remained there in May, according to the Department of Labor.

Lack of workers has emerged as one of the biggest challenges to the economy’s post-pandemic rebound, particularly in service-heavy businesses. (Related: McDonald’s to test run AI-powered drive-thru windows that don’t need employees to take orders.)

Over the past year, restaurants made some of the largest layoffs as COVID-19 prompted shutdowns and restrictions. Now that industries around the country have resumed full operations, restaurants are struggling to keep up with demand. Restaurant and bar employment remains 1.3 million workers lower than before the start of the pandemic while other sectors have nearly returned to full employment.

With around 800,000 people working in the chain’s restaurants, McDonald’s is one of the largest private employers in the country. It is closely watched by others in the industry for its moves on pay.

In May, McDonald’s announced that it would bump up starting pay in its corporate-owned restaurants from $11 to $17 an hour and said it would keep assessing wages to be competitive.

McDonald’s franchisees last year began evaluating the pay and benefits that operators currently provide workers to figure out what may need improvement. More than 5,000 workers and managers participated as owners surveyed current McDonald’s restaurant employees about what they’d like to see in compensation.

Franchisees found that McDonald’s employees gave priority to a range of possible additional benefits, spanning enhanced pay to more workplace flexibility.

After discussions throughout the year, franchisee leaders last month agreed to help boost training, workplace flexibility, pay and benefits across markets. Individual restaurants are now adopting the employee program, such as a Denver operator who is spending more than a million dollars on wage increases.

Major restaurant chains trying to keep workers happy

McDonald’s efforts are part of the restaurant industry’s broader battle for workers in an economy short on labor. A number of restaurant companies are trying to understand what it will take to lure back workers.

Chipotle Mexican Grill conducted a survey of market wages before announcing last month it would boost starting pay to an average of $15 an hour, chain executives said. Shake Shack executives said they raised hourly wages at more than half of their restaurants across the country this year and are reviewing compensation frequently to keep it competitive.

Major restaurant chains are doing everything they can to keep their workers happy. (Related: Manhattan restaurant forced to close as owner can’t find workers.)

Earlier this month, Papa John’s announced new hiring, referral and retention bonuses for restaurant workers at its company-owned locations. Corporate workers will earn an extra $50 for every new worker they bring into the fold, while the new hires will also earn $50. Existing employees are also eligible for up to $400 in appreciation bonuses paid in increments for the rest of the year.

In late March, Darden Restaurants announced that every hourly worker across its portfolio of restaurants will earn at least $10 an hour, including tip income.

Asian-inspired restaurant chain P.F. Chang’s is offering referral bonuses. It is also taking steps to improve the work-life balance for its workforce. The company gave its employees the Fourth of July off so they could spend the day relaxing and enjoying the holiday. Despite these efforts, the privately held company still has about 2,000 unfilled job openings across its footprint.

Follow Pandemic.news for more news and information related to the coronavirus pandemic.

Sources include:

WSJ.com

CNBC.com 1

CNBC.com 2