Dive Brief:
- Shake Shack has stopped offering a four-day workweek to general managers, a perk it began testing in 2019 as a recruitment and retention tool, the company told Restaurant Dive in an emailed statement. The chain said the program is "on pause" and that "there's always a possibility it could return in the future."
- The program was suspended due to the pandemic, and the chain told Business Insider it is pushing to hire more hourly workers and offer higher wages. Shake Shack is also looking to improve diversity and career development.
- Earlier this year, the company said it would invest over $10 million in restaurant employees, putting more than $9 million toward increasing hourly wages and $1 million for hiring bonuses. In 2020, the company invested nearly $6 million in increased wages, which included year-end bonuses.
Dive Insight:
Shake Shack's four-day workweek for managers helped boost employee retention, and managers reported they saved money on childcare thanks to the reduced schedule, Nation's Restaurant News reported in 2019. Shake Shack CEO Randy Garutti said that same year the perk was drawing workers to apply to Shake Shack, so the program's end could hurt recruitment.
But Shake Shack has retention strategies left in its arsenal. Through its Shift Up program, for example, the chain is training shift managers in financial literacy, business acumen and development to help them become leaders at the company, Garutti said during the company's Q2 2021 earnings call in August.
"Those investments are going to pay off [along] with diversity and equity inclusion goals and exciting programs to educate our teams," Garutti said during the call. "We've got all of that in play in addition to just paying people more. And that's what we got to do."
The company has offered sign-on equity grants that help general managers make more than $100,000 per year, Garutti said. Additionally, Shake Shack has set aggressive goals to boost diversity and equity across its restaurant and corporate leadership roles by 2025.
"Shake Shack's workplace initiatives are focused on diversity and career growth as these are two things the company has heard from employees are important to them," the company said.
Shake Shack has already made strides to pay its employees more, and the chain's average hourly wage is already above $15 per hour. Chipotle has also reached this milestone, while Starbucks said it would pay all of its U.S. employees at least $15 an hour by 2023. McDonald's has also made recent efforts to increase wages. Average hourly earnings across the industry for non-supervisory employees has been steadily climbing this year and now averages $15.60 as of July, compared to $14.95 in April, according to the U.S. Bureau of Labor Statistics.
It's possible paying employees more may could have a bigger impact on retention than flexible work schedules amid the labor shortage. A majority of restaurant workers who have left or plan to leave the industry report wages and tips are one of the main reasons for their departure.
