The fast-food chain announced that it will raise employees’ wages of those working in its corporate-owned restaurants. That means that the hourly pay of some employees will increase by 10% to help it attract more workers.
Previously, entry-level workers earned $11 per hour and shift managers $15 per hour, which is expected to go up by $17 and $20 an hour, respectively. This plan will continue post-pandemic until the chain achieves an average per hour wage of $15 by 2024.
The company said that the pay rise will impact only employers working for its company-owned restaurants. That means about 36,500 employees, which make up 5% of its American stores, while its franchisees which amount to 95% of the fast-food chains’ restaurants, will make their own decisions whether to hike their per hour wages or not.
This decision will help McDonald’s attract over 10,000 workers even as President Joe Biden’s administration lifts dining restrictions nationwide due to an enhanced vaccination campaign.
The sector was severely affected by the pandemic as bars and restaurants were ordered to close, thus letting their workers go. Millions of these workers were left jobless while others switched to other sectors. Further, in this industry, employees are notoriously underpaid, thus finding it hard to attract workers amidst the staffing shortage in the US.
Restaurant operators are desperate for business and finding enough workers after the huge impact of the Covid-19 pandemic. However, this shortage coupled with increased wages is likely to impair their road to normalcy.
While restaurant jobs are coming back as the economy reopens, it’s still below the pre-pandemic levels. But they are feeling the labor pinch and have made hiring their number one priority.
Increased demand for workers has made them scarce, thus the McDonald’s decision to hike the wages of some workers.
The high wages being offered by some independent restaurants and chains are geared towards bringing back workers who left this industry. Currently, restaurant owners are looking for all means of bringing back desperately needed workers. These include wage hikes, retention bonuses, referral bonuses, and more enhanced benefits.
Chipotle also announced its plan to raise workers’ pay to $15 an hour by the end of June as it looks to hire over 20,000 employees. It will also roll out an employee referral bonus of $200 to help it achieve its goal amidst the labor crunch in the country.
McDonald’s USA President Joe Erlinger said, “Together with our franchisees, we face a challenging hiring environment, and staying ahead means we must constantly renew our commitment to offer one of the leading employment packages in the industry.”
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