Dive Brief:

• Chipotle will increase employee pay, leading to a $15 average hourly wage by the end of June, according to a press release. The wage increases for new and existing employees will roll out in the coming weeks and result in new employees having starting wages ranging from $11 to $18 per hour. 
• The fast casual chain has also added a $200 employee referral bonus for crew members and a $750 referral bonus for apprentices or general managers. With 200 new restaurants expected to open this year, Chipotle is planning to hire 20,000 employees in the U.S. 
• Chipotle joins several other major chains like Starbucks and Darden in boosting wages as employee retention rates drop across the industry and labor shortages tighten.

​Dive Insight:

The fast casual chain is confident raising wages won't have a significant impact on its bottom line. During the company's Q1 call, CFO Jack Hartung said raising hourly wages to $15 would result in more than a 15% increase in average pay, which was previously averaging about $13 per hour. He also said a 10% increase in wages would result in menu price increases of 2% to 3%. 

Higher wages will come in handy as the chain has been on a hiring streak over the last 12 months. In January, Chipotle hosted a national hiring event with the goal of hiring 15,000 new employees. Last year, it sought to hire 10,000 new hires on top of 8,000 previous new hires. This push is meant to support Chipotle's recent growth. The chain's Q1 2021 comp sales rose by 17.2%, with its digital sales up nearly 134%. During the quarter, the company also opened 40 new locations. 

The company is also hosting a virtual career fair on Thursday from 10 a.m. to 1 p.m. Pacific Time through Discord. The event will provide recruitment content and live sessions with Chipotle employees, who will share benefits, career paths, cooking demos and other topics. 

Chipotle also created a path for crew members to reach restaurateur, the highest general management position, in a minimum of three and a half years. This position comes with an average salary of $100,000, according to the press release. 

Offering higher wages and clear career progression will likely help Chipotle with retention, a key aspect in the fight for labor. A One Fair Wage report released last week showed that 76% of restaurant workers are planning to leave their jobs because of low wages and tips, but 78% would stay if they had stable living wages. Another 49% of workers said they would keep their jobs if they were offered paid sick leave. 

In addition to offering higher wages and paid sick leave, Chipotle has been building up its benefits over the last few years, providing debt-free degrees through its partnership with Guild Education, mental healthcare and financial wellness resources, a 401(k) plan, and a crew bonus program that provides employees with up to a month's worth of pay if their stores meet performance criteria.

Chipotle isn't the only chain moving toward offering higher wages. Starbucks plans to offer a $15 minimum wage within three years to all of its U.S. employees, while 30% of its employees were already at or above this hourly pay as of December. Restaurants are increasing pay as they continue struggle to attract much-needed talent with sales rebounding and customers rapidly returning for on-premise dining.