Dive Brief:

• Taco Bell will test a $100,000 annual salary for restaurant managers at company-owned stores in select locations later this year, it announced in a Jan. 9 press release. 
• The chain is also introducing a program called "Makers" that will help employees who want to grow their leadership experience but don't want to become managers. 
• As of Jan. 1, company employees nationwide can be eligible for at least 24 hours of paid sick leave each calendar year.

Dive Insight:

While there is much focus on the overall labor shortage, quick-service restaurants are particularly concerned about retention of general managers as of late. Taco Bell is just one of several other fast food chains focusing on this issue, with Shake Shack offering equity awards of $10,000 and testing a four-day workweek for general managers last year. 

Over the last few years, Taco Bell has tried to solve its turnover problems in various ways. In 2012, the chain discovered regional general manager turnover related to poor store performance as part of a study into why turnover rates were on the rise. Additionally, the company found that turnover jumped when engagement scores fell, when stress increased and there was inadequate training.

Taco Bell's average salaries for general managers at its company-owned locations range from $50,000 to $80,000, according to a company spokesperson. Job postings on Simply Hired show restaurant manager salaries across the industry ranging from $37,000 to more than $90,000, depending on location and type of restaurant. A Pizza Hut opening for a general manager in Iowa, for example, is offering up to $42,000.

While increasing salaries may help with retention, it also increases overall labor costs, which have been rising at Taco Bell, according to the company's Q3 2019 earnings filing. Taco Bell is in the unique position of also having continual same-store growth, so the labor cost hit has not been as disruptive as it has for other brands. The impact also will likely be minimal since Taco Bell owns only 7% of its 7,191 units as of Sept. 30, 2019.

The company also has found new ways to attract prospective employees. In April 2019, it hosted 600 "hiring parties" ahead of the summer season to better entice job candidates. It also offers educational scholarships and plans to award $6 million Live Más Scholarships to fans and team members this year, according to the press release.

The addition of paid sick leave, combined with a leadership program and educational scholarships also could help with retention for store employees. These benefits line up with those offered by other quick-service restaurants, including Chipotle and Starbucks, both of which expanded their benefits within the last 18 months. As more fast food chains boost their benefits, others may follow suit to remain competitive.