No cure for headaches at work yet | Franchise News
Ask any franchise operator how things are going and they’ll likely tell you they can’t find anyone to work for. Even though unemployment remains high from pre-pandemic levels, employers are struggling to find help.
This is, of course, nothing new for franchisees. Work was the # 1 problem before COVID-19, and after a brief interlude where delivery and customer engagement came to the fore, the franchise industry is back to union struggles. Overall, the economy is still around 4 million workers short and the labor force participation rate remains just 2% below pre-COVID levels. The restaurant industry now employs around 10 million people, 2 million short pre-pandemic levels.
Many employers say the extra $ 300 per week in unemployment benefits is the main factor. In addition to state unemployment payments, the additional $ 15,600 per year, they say, means people can earn more by staying at home. In total, additional annual benefits total between $ 27,716 in Mississippi, where the average amount is $ 213, and $ 44,460 in Massachusetts, where benefits average $ 555. Last year, the median salary for restaurant workers was $ 24,000 and $ 56,000 for managers.
Looking at the political cartoons and talking heads, the refrain is ‘nobody wants to work’. In a report from the United States Chamber of Commerce, data shows that 25% of the unemployed earn more without working. The organization called for an end to benefit premiums of $ 300.
Maybe some workers are happy to play at home on Xbox and watch Netflix, but that’s not the whole story. A Yale study at the start of the pandemic actually showed that even the $ 600 bonus didn’t stop people from looking for new work. The study found exactly the opposite: The surge in unemployment has accelerated the return to work, especially those returning to their old jobs.
Workers’ advocates, meanwhile, changed the chorus by saying “no one wants to work for you.” They cite low wages, poor working conditions and unstable hours as the main reasons why it’s so difficult to hire right now. They doubled down on their calls for better employment practices, saying it was an opportunity to treat “essential” workers like disposable cogs.
Between these two ends of the spectrum lies a confluence of many, many factors – too many to discuss here. There are, however, a few major reasons why it is so difficult to hire right now.
Mothers, for one, have been particularly slow to return to work as schools remain on the move. In states like New Mexico and Nevada, where women are heads of household at high rates (28 and 23 percent respectively), this effect is even more pronounced. The states both have an unemployment rate above 8%. The same effect was seen across the country: men returned to work much faster while women overall still lose jobs, as shown in the April employment report from the Bureau of Labor Statistics. .
There is also a lot of competition for talent, more than ever. In March, the BLS reported a history of 8 million job postings. Almost a million more than in March 2019. Many of these jobs come with benefits: McDonald’s is offering a signing bonus of $ 400. Independents such as New York-based Dirt Candy restaurant are offering wages up to $ 27 an hour with health care benefits. The best performing franchise brands also raise wages. Many companies have big recruiting events and go to great lengths to hire hundreds or thousands of workers.
In discussions with several operators, the difficulties remain similar despite all these efforts: fewer people apply for jobs regardless of a high salary or additional benefits.
Keith Miller, a franchisee and advocate for Subway franchisees, said he sees a fairly typical turnover, but no one is standing in line behind the workers when they leave. He sees higher wages down the road at Chick-fil-A and other QSR brands that have driven efficiency and have cash flow to spend, though they also don’t attract many workers.
“Our local Chick-fil-A by one of our stores advertises $ 18 an hour,” Miller said. “Now you go through these fast food establishments, where the storefronts were promoting products and now only promoting hiring.”
He said he was paying $ 14 as a starting salary, but he and his wife spend a lot of hours in stores to make up for the labor shortage and keep his key employees from running out, another factor. which pushes to churn out the workforce.
That’s what Jeanniey Walden, director of innovation and marketing at payment processor DailyPay, saw in a recent employee and customer survey.
“If a company can’t hire enough people, it asks employees to work more and that leads to burnout,” Walden said.
She said nearly 70 percent of those surveyed would be looking for a new job, but kept their current job until the labor market was fully open.
Walden said perks like being able to withdraw wages at any time help keep people around, possibly better than staff meals, free memberships or discounts. Other perks like child care, better health care, and more stable hours attract and retain talent as well. Browsing through job boards, regular hours have become a common perk for companies that simply cannot afford significantly higher wages than they could before the pandemic.
There is another big reason why it is difficult to find people: many of these laid-off workers have already found a job. The ‘V-shaped recovery’ that everyone was watching when COVID-19 hit has already occurred as of June 2020. Grocery stores (which fall under the BLS numbers retail), on the one hand, were able to hire dozens of unemployed guards. Odd jobs have been able to keep up with soaring demand with a parallel increase in hiring, and other delivery and logistics companies have taken hold as well. Restaurants saw a second round of layoffs after a brief hike in late summer 2020.
A lot is happening on the workforce line as summer hires are in full swing and businesses look to bounce back as state regulations on COVID-19 recede. Sadly, there isn’t much for a glimmer of hope. The only good thing: Business is growing at a breakneck pace, and those who can find and retain talent will benefit.