Why a long-term approach is the best strategy for work challenges

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Given restaurants’ acute labor issues right now, it’s easy to forget that many of them were short of workers before the pandemic.

And fast food restaurants in particular have long struggled with high turnover. “There has always been a staffing challenge,” Jose Cil, CEO of Burger King owner Restaurant Brands International, told investors Monday, according to a transcript on financial services site Sentieo.

This is unlikely to be fixed anytime soon. As such, Cil said, the best strategy for dealing with work challenges is to take a long-term view. “The best operators do a great job with this and the ones that struggle don’t,” he said.

“We believe this is going to continue to be a challenge and a responsibility for us in this industry, and that is why we are focusing on a long-term approach to creating the right environment in our business for our franchisees and for the members of their team to be able to generate good and strong staffing levels as well as retention.

The labor challenge created huge headaches for a large number of operators, exacerbated by a variant of the omicron that caused frequent work stoppages resulting in a number of closures.

Some 920,000 workers quit their jobs at restaurants, bars and hotels in November, according to federal data, a 6.9% ‘quits’ rate, or 159,000 more people than those who quit their jobs in October. According to federal data, some 8.4% of jobs in these industries were open that month.

Shortages have led to soaring wage rates. Wage rates in 2021 have increased by around 10% for restaurants. “We see that too,” Cil said.

Higher wage rates, combined with rising food costs, led franchisees of RBI’s various brands to raise prices in the “mid-single digits”. At the moment, Cil said, “we haven’t seen a lot of consumer pushback yet,” but the company is watching it. This mirrors some comments earlier this month from Burger King’s largest U.S. franchisee, Carrols Restaurant Group.

RBI itself does not operate restaurants, for the most part. Its brands, including Burger King, Tim Hortons, Popeyes and now Firehouse Subs, are largely run by franchisees.

Yet the company also spoke with hourly workers, fast food and other industries, as well as consultants, to try to determine the factors driving recruitment and retention. . One thing the company discovered, Cil said, “There’s a lot more to staffing and retention than just raising salaries. Some of them have to do with the environment in the restaurant.

This includes the internal culture, if employees are engaged and if there are opportunities for growth. There are also other factors, such as childcare and transportation issues. The benefits are also important.

Cil said RBI is working with its franchisees to share potential solutions. The company has been working to increase its field crews over the past year and counting, and Cil said the company is trying to provide tools to its franchisees to help them improve retention.

“The franchisees make the decisions,” Cil said. “It’s their business, but it’s our job, we believe, to help provide tools and best practices to franchisees so they can make better decisions.”

The company worked on some practical elements. RBI is working to reduce ingredients and simplify its menu, so operations are easier and restaurants

RBI is also working to further automate the kitchen. Cil mentioned air fryers, rotisseries and automated beverage dispensers to simplify prep. This is in addition to existing efforts to increase mobile ordering, pre-payment, delivery and outdoor digital menu boards.

All of these efforts, Cil said, will be important to sustaining the workforce over the long term. “I don’t want to be overly dramatic here, but we think there’s a talent war going on there,” he said. “Staffing and retention are key to delivering exceptional customer experiences. And so we’re doing everything we can, knowing that it’s not just about pay and benefits. It goes way beyond that. »

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