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."
Yep good point. I’ve been excoriated for saying this before, but the Boomers (AND my generations, GenX) have never experienced real hardship like the generation before. There is an entitlement expectation at work here as well as the company’s reluctance to adjust its wages.
Anyway, I'll never forget writing that check for my first car - and how good it felt to have earned all that money by myself.... during my teen years. All that money...well.....the car cost (NEW) $2300! That was in 1971...before the inflation explosion of the Jimmy Carter years. But still relatively speaking - it was a LOT of money back then and I had earned it doing retail work.
Deal is, I worked....and most of my friends worked....during their holidays and summers. Boyfriend worked construction during his summers and made GREAT money because he worked so much overtime. That was hard dirty work, but he made enough to buy all his own clothes throughout college - no mama or daddy paid for those for him. They did pay for all his college though - and think how much more affordable THAT was then.
I don't know what the witholding rate was but I dare say it was way below what it is today, and there was little if any of this medicare withholding in that day and time.
In other words - IT PAID to work, earn, and save....even as a teenager. Today for SOOOO many workers, it just doesn't "pay", imho because of the outrageous taxes taken out.
OK, so quit complaining.
"You gonna eat that?"
Exactly as much as it takes to get a sufficient number of capable workers.
There are some business owners who seem to think that if they can't get enough workers at the wages they want to offer, that somehow it's the labor pool's fault. These guys usually don't stay in business too long.
The first key to success in life and business is valuing other people. The wealthy (barring lottery winners and inheritance beneficiaries) have to know this and are frequently of a better “cut” of character.
Having said that, we’re all human. In the enjoyment of plenty, is it not possible for owners to become self-centered, and comfortable with the status quo? Is this not human nature?
I am confident the market will sort it out. No one owes these owners work for substandard wages, and the owners don’t owe anyone either.
IN N OUT. I need to put that sticker on my back window.
It is the best place for a fast food burger.
They seem to have no shortage of good looking, clean cut, youngsters of all races. Maybe it is because they try to hire them and pay well.
Fresh fries and fresh cooked burgers..no microwaved hokey pucks there.
figures lie, and liars figure....
these statistics are always a funny thing when read with a bit of scrutiny, aren't they?
With the "baby boom" generation reaching retirement age, there will be lots of older folks moonlighting for lottery money. If there are job openings, somebody will fill them.
So will “the bruthas.” Sometimes you got to be tough. Its a diverse world out there, and you’ve got to deal with it.
Yeah I love that place. One of the few things I miss about Santa Clara County...
McDonald’s definitely promotes within. My uncle started out managing a McDonald’s in inner-city D.C. back in the 70’s, and worked his way up to a vice president’s position, in charge of purchasing equipment for the company’s stores worldwide.
Same reaction. but I was only getting coffee and it was already poured before the kid in the back noticed me.
You beat me to it! ;)
I can’t figure out why parents with kids at home pay for maid or lawn service.
Everytime I see this picture, I get a crazy urge to go tire-shopping.
I once worked between three fast food places, KFC, McDs and Taco Bell, a steady stream of uniformed employees crossed back and forth in front of our place at lunch time.
Two:
How long until your car gets fixed?
What did you hit that hard?
To keep from having to do it twice.
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