Business & Tech

Fast-food workers are in short supply

FILE - In this Feb. 28, 2012 file photo a bag of fries is handed to a customer through the drive through window at a Wendy's restaurant in Falmouth, Maine. The Wendy’s Co. says Thursday, Aug. 9, 2012 that it lost money in the second quarter because of costs to refinance debt. But a key sales figure rose as it worked to reinvent itself as a higher-end hamburger chain. The Dublin, Ohio-based fast-food company says sales at restaurants open at least 15 months rose 3.2 percent for the quarter. (AP Photo/Pat Wellenbach, File)

Pat Wellenbach/AP/file 2012

Rank-and-file fast-food workers are winning referral bonuses, free meals, and days off, and the scarcity of candidates may be raising the minimum wage without help from lawmakers.

NEW YORK — Lisa Aragon just couldn’t get the headhunter to take no for an answer. Five times in a month, she turned down enticements, including higher pay and four weeks of paid vacation.

Aragon doesn’t work in Silicon Valley or on Wall Street. Far from it. She is a manager at a Wendy’s in Albuquerque, N.M. In 20 years, Aragon had never been pursued as aggressively as she had by the recruiter from the Pilot Flying J chain of truck stops, a major franchisee of fast-food restaurants.


‘‘I told him, ‘I’m happy where I’m at,’ ” said Aragon, 41, who already looked forward to quarterly bonuses and a bump for her work as a trainer. ‘‘There’s no need for change right now.’’

In today’s tight labor market, restaurants are embroiled in a full-on food fight over workers. The rank-and-file is winning referral bonuses, free meals, and days off, and the scarcity of candidates may be raising the minimum wage without help from lawmakers. While good news for workers, it may not be for companies and customers. Restaurants will either have to raise prices or accept falling margins. Some stores’ service is suffering.

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The US unemployment rate was 4.7 percent in December, near a nine-year low. With its insatiable appetite for new workers, the fast-food business serves as a leading indicator of a labor shortage. In September, annual turnover for restaurant workers jumped to 113 percent, the highest since industry-tracker People Report began collecting data in 1995.

Andrew Puzder, President-elect Donald Trump’s nominee for US Labor Secretary, will be acutely aware of the phenomenon. A foe of raising the minimum wage, he is chief executive officer of CKE Restaurants Inc., which owns the Hardee’s and Carl’s Jr. burger chains. Further intensifying demand for lower-skilled employees, Trump has promised to curb illegal immigration.

‘‘It’s a hot job market,’’ said Michael Harms, executive director of operations at Dallas-based TDn2K, People Report’s parent. ‘‘Every employee, whether they’re 17 years old or 40 years old, has options.’’


Aragon’s boss is already pulling out all the stops to keep employees. Over the last year, Eddie Rodriguez, who operates 177 Wendy’s in Florida, New Mexico, and Texas, raised hourly pay by nearly a dollar, to an average of $9.05.

Rodriguez gave referral bonuses of up to $250 to employees who found prospects. He offered more flexible schedules and used his own headhunters to find staff for his corporate office in Pompano Beach, Fla. He also makes sure he doesn’t take anyone for granted.

‘‘Today’s employee, they want to feel wanted,’’ Rodriquez said.

Customers, however, may feel less appreciated. Rodriguez can’t find enough employees for the lunchtime rush, which means it takes longer to get a junior bacon cheeseburger.

Diners are also being kept waiting at Chipotle Mexican Grill Inc., which is trying to hire about 600 ‘‘crew members’’ for its US restaurants. To be able to pay more, the company, for the first time since 2014, is considering raising prices in some parts of the country.

Chipotle is already paying an average $10 an hour.

In a December conference call, chief executive Steve Ells complained that the lack of well-trained workers has resulted in napkins left on tables, untidy drink stations, and slower meals.

‘‘We took our eye off the ball on the customer service side,’’ Ells told investors.

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