Dive Brief:
- Whataburger announced Thursday that it seeks to hire 50,000 employees "with an emphasis on finding business leaders to run its multi-million dollar restaurants." In a press release, CEO Ed Nelson emphasized general manager roles specifically.
- In late March, Whataburger announced that it is increasing responsibilities and pay for its general managers, who the chain now refers to as operating partners. This includes bonus potential of up to 150% a manager's target incentive and six-figure salaries.
- The burger chain has also awarded more than $90 million in bonuses to employees to thank them for their frontline work during the pandemic and severe winter weather. These initiatives come as restaurant chains across the country struggle to find labor to support their post-pandemic growth plans, and seek to mitigate potential turnover.
Dive Insight:
Whataburger is just one of many big chains embarking on hiring sprees as vaccinations roll out and the economy starts to open back up.
McDonald's, for example, is also hoping to hire 25,000 new employees in Texas alone with a three-day hiring event from April 13-15, while Sonic seeks to hire 20,000 new workers. Taco Bell announced this week that it will hire at least 5,000 employees during its hiring party on April 21. Like Whataburger, Taco Bell is also adding incentives for general managers at company-owned stores, including four weeks of accrued vacation per year, four weeks of paid "baby bonding" for new parents and eight weeks of paid short-term disability after the birth of a child.
Growing demand to dine out, combined with stimulus checks and unemployment benefits keeping potential workers at home, have squeezed the staffing situation at restaurants, Fat Brands CEO Andy Wiederhorn told Reuters.
Restaurants are attempting to reconcile this shortage by offering more incentives — not just for new hires, but also to retain employees they already have to avoid high turnover costs and the challenge of recruiting in a tight market. Whataburger, for example, is hosting a free virtual leadership conference on April 21 to offer tips and tools for those hoping to make a career at the company. In addition to its bonuses, the company also offered Extra Mile bonuses, emergency pay and a doubling of their 401(k) plan matching last year.
Chipotle also just announced the expansion of its "debt-free degree" offerings initially introduced in 2016. So far, nearly 10,000 employees have taken advantage of the program and it has led to strong retention numbers for the chain. Chipotle has seen a 3.5 times higher retention rate among students enrolled in the program, and employees using the benefit are 7.5 times more likely to enter management roles at the company, according to a press release.
The industry has grappled with a tight labor market before, including as recently as 2018 when the U.S. was in the midst of the lowest unemployment rate in nearly 50 years. This time around, however, is different, as employees perhaps have even more leverage as "essential workers" critical to the battered industry's recovery. As such, chains aren't just stepping up their hiring incentives, they're also thanking their existing employees for serving as essential workers through the pandemic. Papa John's provided year-end bonuses totaling $2.5 million to 14,000 employees, while Domino's offered year-end bonuses totaling over $9.6 million to 11,500 employees.
This confluence of trends could be the industry's catalyst toward higher wages across the board. For Whataburger, these new incentives come as the brand experienced record-breaking performance numbers from March 2020 to March 2021, despite the pandemic's impact. In a statement, Nelson said the company wanted to ensure that its employees and families "were taken care of" after this past year, calling them the foundation of its success.
