Dive Brief:
- A California Chick-fil-A restaurant owner has announced plans to raise his employees' wages from their current $12 and $13 per hour to $17 and $18 per hour to attract and retain talent — potentially among the highest wages in the fast food industry, the Washington Post reports. California is set to raise its minimum wage to $15 an hour by 2022.
- Turnover in the restaurant industry remains high, the Post said, citing U.S. Bureau of Labor Statistics information. But to create a solid customer service experience, employers need well-trained workers — a difficult proposition when employees are continually leaving.
- Unlike other some other similar businesses, fast-food restaurants tend to be operated by franchise agreements, the Post noted; as a result, employment initiatives can vary widely from one store to the next.
Dive Insight:
The Chick-fil-A owner's move shows the measures employers are taking to attract and retain workers in a tight labor market, with a low unemployment rate of 3.9%. Similarly, many retailers have expanded their benefits offerings to include paid parental leave and tuition subsidies for hourly workers in an effort to combat the industry's retention problem.
Many hourly workers — even those making at least $20 per hour — still struggle to pay bills and meet their other financial obligations, according to Snag's annual State of the Hourly Worker Report. The challenge for employers is providing competitive wages, while keeping costs under control.
But as noted in this Chick-fil-A example, employers may save money in the long run by creating a strong employee value proposition that includes a solid compensation structure and good benefits. After all, turnover can cost an employer as much as 33% of that worker's annual salary, or $15,000 for a worker making $45,000.
