Posted on 07/23/2007 5:02:41 PM PDT by fight_truth_decay
A new McDonald's Corp. commercial tells the story of Karen King, who began her career as a teenage crew member in the 1970s and rose to head the company's $10-billion Eastern-U.S. division.
The spots are meant to resonate with American teenagers, who are leaving the workforce in droves — and leaving McDonald's with a labor crunch that threatens to take a bite out of its surging sales.
"It's a shrinking labor market, and we recognize less people will be available to hire," Ms. King says.
The declining number of teenage job-seekers presents a super-size challenge for McDonald's, where 40% of the top 50 managers — including CEO James Skinner — worked their way up from the cash register or fry vat, and which more than ever needs qualified workers to keep service from bogging down in an era of computerized cash registers and electronic ovens.
"There is a direct correlation between the quality of the crew and sales restaurants do," says Steve Bigari, a former McDonald's franchisee who now works with fast-food companies on labor issues.
With the number of teenage applicants dwindling, McDonald's has rolled out a new commercial emphasizing the opportunity for advancement at the company. For more photos visit McJobsChicagoBusines.
For years, McDonald's has manned its crews largely with teenagers. In the 1990s, 45% of its U.S. employees were under 20. Today it's 33% of the workforce, which totals 650,000 employees.
GETTING HARDER OUT THERE
It's not just that fewer teenagers are working at McDonald's — fewer are working, period. Last year about 44% of American teens held jobs, down from nearly 60% in 1982. The reason isn't clear, but many attribute the shift to an intensified focus on academics and after-school activities.
Whatever the explanation, the trend scares fast-food operators. "Everyone I talk to in the industry says it's becoming harder and harder to maintain their operations standards given what is happening in the workforce," Mr. Bigari says.
About half the employees in the fast-food industry are between 16 and 25 years old. The number of jobs in the industry is expected to increase about 17% in the next decade while the number of workers in that key age group is expected to increase 0.3%.
McDonald's is trying to get ahead of the coming squeeze with its aggressive new recruiting campaign, launched in May and driven by the TV ads featuring Ms. King. The company also revamped the recruiting portion of its Web site to facilitate online job applications, which are routed to franchisees, who hire the bulk of McDonald's front-line workers.
Lurking behind the recruiting drive is another reality: McDonald's could ease its labor crunch by raising wages. But that's a last resort for the franchisees. Increased payroll costs come directly out of their pockets.
Steve Russell, McDonald's U.S. senior vice-president of human resources and chief people officer, says the company doesn't feel pressure to raise wages, which vary by restaurant but average about $7.35 an hour, 26% over the current federal minimum wage of $5.85.
TOUCH SCREENS AND NEW MENUS
At the same time it expands recruiting efforts, McDonald's is trying to be more selective about its hires. About half of its stores require applicants to take a short test designed to measure their experience and behavior patterns. Mr. Russell says the number of stores utilizing the test quadrupled last year and the company continues to "rapidly deploy it."
The increased scrutiny matches the rising sophistication of fast-food jobs. Burgers are no longer flipped on a griddle but cooked in an oven operated by an electronic timer. New menu items have forced kitchen staff to master new preparation techniques and have given order-takers more buttons to locate on cash registers with touch screens — easy to use but often intimidating to workers uncomfortable with technology.
Fumbles with the equipment slow down order times — a big turnoff for customers looking for a quick meal. That's why it's critical to find, and keep, qualified workers. An internal McDonald's study shows stores with higher-performing crews reduce turnover by 30% and increase sales by $200,000 annually.
"Now more than ever, we realize our people are the main drivers of our business," Mr. Russell says.
This week in Las Vegas, McDonald's is holding a meeting of 15,000 managers at which employment will be a primary topic of discussion.
Industry observers say McDonald's has done more than any of its national competitors to promote employment, even while it may pay lower wages than some regional and national chains, such as coffee giant Starbucks Corp.
The effort may be paying off. Last year, according to Mr. Russell, McDonald's reduced its turnover by 9%, matching the chain's increase in sales, which hit $21.6 billion. The company won't disclose its retention rate; the industry averages about 150% annual employee turnover.
But it remains to be seen how McDonald's will replace the teenagers who continue to drop out of the workforce.
"There is not a readily available supply of teenage workers lined up at the door begging for jobs," says Joni Doolin, founder of People Report, a Texas-based company that tracks employment data. "And the problem is not going away anytime soon."
Odd, I am a parent, and a grandparent, and I never did any of that...
the infowarrior
It really gets better ! I’m in charge of discipline.
In the USA, that's a problem. That's a Big Problem.
Those were the days. Hardest work I’ve ever done for 3.35 an hour (Steakhouse). Well, except for the 2 cents a bale in the 70’s.
*SIGH* Cherry dipped ice cream cones! When they stopped offering that, I stopped going.
That’s the bottom line, end of story. There is no such thing as “labor shortage”. Economics 101; raise wages enough and applicants will line up around the block fighting for a job.
The kids of today are handed cars, cell phones and ipods and debit cards by doting but fool parents, so why sling hamburgers like we had to in the olden days?”
BINGO!!!
We have a winner!!!!
I have seen those extremely efficient, smiling and helpful individuals. I would rather have them working for me at double their wage. Such people appear to do the work of 2 or 3 slower workers, plus they generate customer goodwill and repeat business.
A restaurant management company I'm familiar with concentrates on hiring such people as managers, rewarding them with bonuses, profit sharing and recognition. Although they have turnover among the hourly workers, their managers and assistants are the spark plugs of the company.
Back in my day, we made $3.05 an hour.
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That sounds like heaven to me! I used to work all day in the South Carolina sun in mid-summer for 3 or 4 dollars a DAY! That was when I could get a day working for someone who would pay! I spent most days working on the family farm to survive, no cash involved. Of course 3 dollars back then bought more than 30 dollars now.
We need to change the structure of our current high school system. Not every student is on college track, obviously.
We need to change the current young person's (they can't take all the blame..) "value" system.
I offer more in response part way down here: #21 posted on 02/23/2008 6:36:31 PM PST by fight_truth_decay
I do believe in schools having a "community volunteer program" mandatory to all. It might just change for many the: "it's all about me" their prime factor of 1. Definitely will not hurt to see another part of the "real world" up close and personal.
But, I agree in what you said...BIG TIME.
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