Fast food struggles to hire as demand soars, U.S. economy roars

[April 06, 2021]  By Hilary Russ

NEW YORK (Reuters) - Taco Bell wants to hire at least 5,000 employees in one day, it said on Tuesday, and is adding benefits for some general managers to sweeten the pot as restaurants struggle to hire enough workers to keep up with a surge in sales amid a broader U.S. economic recovery.

Taco Bell, part of Yum Brands Inc, will hold spot interviews on April 21 in parking lots at nearly 2,000 Taco Bell locations, where some candidates won't even have to leave their cars to apply.

It has also added four weeks of annual vacation, eight weeks of paid maternity leave, and four weeks of new parent and guardian "baby bonding" time for general managers at company-owned locations.

Taco Bell has used such hiring events before, but never at so many locations at once. "It is no secret that the labor market is tight" now, Kelly McCulloch, Taco Bell's chief people officer, said in a statement.

"Total nightmare" is the way FAT Brands Inc CEO Andy Wiederhorn describes the staffing situation for franchisees of his company's restaurants, which include Johnny Rockets and Fatburger.

"The most recent stimulus check and unemployment benefits have been a catalyst for people to stay at home" instead of looking for work, he said.

Though fast-food companies and some other restaurant chains did well through the coronavirus pandemic as their customers turned to drive-thru, carry-out and delivery, they are seeing greater sales now that the weather is warmer, many limits on dining room capacities are lifted, and people with stimulus checks are eating out.

A measure of U.S. services industry activity surged to a record high on Monday amid robust growth in new orders, the latest indication of a roaring economy boosted by increased vaccinations.

Hiring cannot keep pace. The U.S. restaurant industry in March was still about 1.2 million employees short from the same month in 2020, according to U.S. Bureau of Labor Statistics data.

The gap is hardly limited to hospitality. High jobless rates have not translated into a flurry of applications for open positions in manufacturing, either.

On Friday, the Labor Department said 916,000 jobs were created last month, the most since last August, including 53,000 manufacturing positions. That was the highest number of new factory jobs in six months.

HAWKING CARS OR COCKTAILS

One McDonald's Corp franchisee said sales have soared as consumers spend their stimulus checks. Yet some McDonald's dining rooms may not reopen until the second half of 2021 because of labor shortages, the franchisee said.

McDonald's franchisees are aiming to hire 5,000 employees just in the state of Ohio, according to local media reports in late March.

Restaurants are competing not just with each other for employees but with other industries, as some hospitality workers who were laid off found other kinds of work – construction or real estate, for instance - and are not coming back, FAT Brands' Wiederhorn said.

"That waiter or waitress can sell a car just as well as they can sell a cocktail," Wiederhorn said.

In Las Vegas, which has about 16 Johnny Rockets and Fatburger locations, employees are working double shifts. "It's just hard, it gets old and tiring," Wiederhorn said. "You can only do it for so long."

(Reporting by Hilary Russ; Editing by Leslie Adler)

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