Retail industry poaching top talents from fast food restaurants
CUSTOMERS cussed at him and threw ice cream at him. Finally, Don-Wesley Andrews had enough. He quit McDonald’s in Sacramento, California, for a job at Wal-Mart.
Like many other Americans, the 22-year- old Andrews improved his life just by moving to retail from fast food. Longer lunch break, paid time off, even a quarterly bonus – and no french fry fragrance clinging to his clothes.
“Wal-Mart’s not perfect, but compared to fast food, it’s much, much, much better,” Andrews said.
There’s plenty of talk about the retail industry dying, with malls closing and the slump stressing iconic chains like Sears and J. Crew, but healthier big-box giants such as Wal-Mart and Costco are still chronically in need of employees, at least for now. The number of US retail jobs was about the same last year compared with 2015, according to the Bureau of Labour Statistics.
What’s really bedeviling retailers is annual turnover – at 65 per cent, it’s the highest since before the Great Recession – making it necessary to keep hiring. The chains are so hungry for good help they’re poaching workers from fastfood restaurants. “Those jobs tend to be more transitional, they tend to be more fluid, and as a result there tends to be higher turnover,” said Michael Harms of Dallas-based researcher TDn2K. “Even though you hear headlines like retail is dying and the robots are coming, there’s still a lot of things that need human touch points. It’s a dogfight over good employees.” When it comes to pay, stores have the edge. US retail sales workers earn a median US$10.37 an hour, while food workers, including those at fast food, make US$ 9.35, according to new data from the BLS. Andrews said he earns US$ 12.12 an hour at his new job. Perhaps not coincidentally, Wal-Mart, the largest US private employer, added about 200,000 American jobs over the last decade.
Italian fast- casual chain Fazoli’s is trying to fend off retail, according to Dave Craig, vice president of human resources.
“It’s a free-for-all right now,” Craig said.
While the company is paying 20 cents to 30 cents more than last year, its employees still make US$ 9.20 an hour, on average. That’s less than the minimum of US$ 10 an hour Wal-Mart started giving people last year.
Fazoli’s is trying to retain employees. The chain might nix cotton T-shirt uniforms for a Dri-Fit option that employees don’t have to tuck in. Black jeans, instead of slacks, are a possibility, too. And workers may get paid more often – the company is testing a programme that gives employees some of their earnings at the end of each shift in a debit card. Boston Market Corp. is buttering up employees, too. It’s handing out as much as US$100 to those who get the best customer-survey scores. The chicken chain is spending more to advertise jobs on Facebook, Glassdoor and Twitter and is giving raises. Workers now earn US$ 10.01 an hour, on average – about 75 cents more than last year.
Pay increases in fast food are fuelled by more than just the competition from retail. Higher minimum wages across the US, a better economy and a smaller labour pool to draw from – due to fewer immigrants from Mexico – also have an impact.
“You have big distribution centres, you have retailers, you have other restaurant concepts, you have grocery stores, and they’re all looking for great people,” said Jason Lessman, the chain’s vice president of human resources. “It’s just as tough as I’ve seen it in my 12 years of doing recruiting. It’s defi nitely a war for talent.”
In 2014, Starbucks upended its workers’ dress code to include looser rules for tattoos, along with coloured ties and scarves and black denim. It further loosened the rules last year inviting employees to “make a statement with hair colour.” McDonald’s said last month it was upgrading its uniforms in the US to be more modern and comfortable – an effort to retain workers.