This sounds great in theory, but we want to know more about how this works with a labor force that largely relies on an hourly pay structure.
— Erika Adams
Americans have been known to innovate when it comes to hamburgers. Maybe it’s no surprise, then, that Shake Shack Inc. is getting creative in its effort to attract and retain scarce workers.
Danny Meyer’s chain, famous for “concrete” milkshakes and gourmet burgers, is testing out a four-day schedule. Similar attempts have been made overseas, but the model hasn’t been widely adopted in the restaurant industry stateside.
Now, with a tightening labor market in the U.S. and an unemployment rate near the lowest in almost five decades, the company is trying new approaches to recruitment, CEO Randy Garutti said Thursday at an investor conference in Las Vegas.
“Here in Las Vegas, in some of our Shacks, we’re testing a four-day work week. That’s a big thing. Nobody’s really been able to figure that out in the restaurant business,” Garutti said.
“If we can figure that out on scale, it could be a big opportunity,” he said. “We’re not promising it yet, but it’s something we’re having fun trying, and seeing how our leaders like it on a recruiting basis and ongoing retention basis.”
Average hourly earnings for non-supervisory employees at limited-service restaurants rose 4.5 percent in the year through January, outpacing the national average for all industries by a full percentage point.
“Labor costs are a flashpoint,” Steve Joyce, CEO of Dine Brands Global Inc., the owner of Applebee’s and IHOP, said Thursday at the same conference. “The labor market is going to be tough this year. It will probably be tough next year.”
— With assistance from Leslie Patton.
©2019 Bloomberg L.P.
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