In the ever-constricting labor battle, some quick-serves are trying another tactic to inspire retention: expedited pay. Church’s Chicken chief executive officer Joe Christina told Bloomberg the company plans to test the option in June at eight restaurants. Employees will be able to collect half of their earned pay the day after the shift.
Church’s said the test would gauge whether the 50 percent was enough for workers. The company would roll it out more widely going forward.
“It will give the employee the chance to get spending money quicker,” Christina told the publication. “Some people just can’t wait two weeks to get paid.” The offer won’t be a loan. There’s aren’t any fees.
You could argue the current labor environment is the toughest it’s been in five decades. Unemployment has tracked 4 percent or lower since March 2018. Figures of 3.8 percent haven’t been seen since December 1969. The tightening labor market hasn’t just reduced unemployment, though—it’s also pushed for higher wage growth. So while consumer spending is up and checks are rising, restaurants are struggling to staff locations and keep employees from bolting. Those realities make delivering customer experience harder than ever (at a time it’s more important due to off-premises and increased competition) and also press brands to find cost-effective ways to battle wage pressures. Not to mention fund programs that attract workers. Restaurants must present a compelling value proposition for employees in today’s dynamic, especially given the pull of the gig economy and other options, which often include higher-paying positions.
Restaurants are also fighting for a base of workers that once flocked to the industry: teenagers. Fewer are entering the workforce and lower-skilled workers are commanding higher wages at companies like Amazon and Target.
Christina told Bloomberg labor was “the No. 1 item,” discussed among management.
“In all my years,” he said, “it’s the toughest labor market that I can remember.”
Church’s hired Instant Financial to offer the expedited pay perk. The company also works with casual-dining operator Bloomin’ Brands, as well as Checkers & Rally’s.
Instant Financial’s CEO, Steve Barha, said in the story that restaurant employees take out $28, on average, with his company’s expedited pay service after working. It doesn’t charge any fees to workers. Instead, it bills the employers, who are willing to fund the platform to inspire retention.
Nearly 80 percent of American workers say they're living paycheck to paycheck, according to a 2017 report by employment website CareerBuilder. Church’s is likely banking on the change giving it a leg up on fellow quick-service competitors who offer similar wages.
It’s not really one of those benefits-driven perks, like sweetgreen’s five months of paid parental leave, intended to speak to a certain lifestyle of worker. It’s an instant perk to the kind of employee already in the fast-food pool.
Erik Bittner, a Pizza Hut franchisee, offers the expedited benefit through the Branch Messenger app, per Bloomberg. He said he charges a flat fee of $3.99 for workers to get up to half of their wages the same day they worked, and offers three-day transfers for free.
“The expectation in the future from employees is going to be they want their pay now,” he said in the article.