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."
Oh Man, why did you have to mention that! I went to Point Loma and I lived at those Taco Stands
I’m a teacher. No way I would eat any place I saw one of my students.
If the problem is an increased focus on school programs and academics, then McDonalds need to do something to make a job there look good on a college application. High school sports and after school clubs look much better to admissions than a job at McDonalds right now. The college bound kids are exactly what McDonalds would love to have for employees as well.
Of course, my first real job was a research assistant at the Naval Postgraduate School (at 16 years old). So I know I’m an exception.
I worked a Dairy Queen. We would swap hamburgers for chicken from KFC. When you work at one of those places all the food begins to taste alike.
Windoze media player is driving me nuts. I'm trying to burn a CD with several albums on it that I want to listen to in order. I put them in order in the burn window, and windoze automatically re orders them.
10, 11, 12, 13 etc, OBVIOUSLY belong before 1, and duh! I OBVIOUSLY wanted albums 20-29 to play before album 2, and CLEARLY I am an idiot for not putting them in that sequence.
But that's OK, windoze will AUTOMATICALLY burn them in the order I'm too stoooooopid to place them in myself.
MMMM, In-n-Out Burger, I always go there when I go out west. It’s been almost two years now but I’ve had an InOB more recently than McD’s(I don’t go there anymore). The place was swarming with friendly kids cooking burgers and fries, taking orders, cleaning up the place, etc., an incredible business. When I went to the McD’s in my area there were certain, ahem, demographically different people than me, that were not particularlly friendly, polite or courteous in spite of me always being so to them, it was obvious that they didn’t appreciate my business so I don’t give it to them any longer. They also started TV advertising to the gangsta rap and hip hop bangers. Forget that place.
Read a complaint in the paper the other day about how one has to be bilingual to apply at some fast food restaurants.
Professor Snape? Is that you?
It's a "problem" for McDonald's.
It's Capitalism for everyone else. Quit complaining, Ronald!
They're just angry they can't hire illegals anymore.
I heard a while back that the average McD's franchise owner made about $100,000 to $150,000 per year. Not alot when you consider the time and money invested.
If a McD's is open 24 hours a day, with lets say 4 people on at all times that would be 35,000 man hours.
How much of a raise do you think they should pay?
If you dropped $1 million for the franchise, and property, and building, what type of return on your investment would expect?
How many hours a week would you work to protect your investment?
What type of return would you expect on your time?
>>The real solution is robotics technology
There is no doubt to me that the illegal immigrant invasion has substantially suppressed the introduction of automation technologies in all areas of our economy.
I teach at an inner cities school in Dallas. Any questions?
May I suggest the obvious: increase wages.
At least their parents never have to worry about those kids drowning in an open swimming pool. They’d be like buoys — all those kids would have to do would be to flip on their backs and they’d safely float until help arrived!
Just one.
WHY?
I knew a family that owned and operated about a dozen McDonald’s. They were definitely multi-millionaires, but I doubt over 8-figures.
Then I knew a girl who managed a Papa Gino’s (just one). She wasn’t doing so great, kind of poor.
Chronic Stupidity!!
my 15 yr old is just waiting to turn 16 so he can go out and get a job.
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