While $100,000 salaries might seem like a massive cost burden for Taco Bell to shoulder, restaurants are finding in today’s tight labor market that an investment upfront is worth its weight in bottom-line gold. The reason being that turnover down the road tends to cost more than retention efforts now.
Store wide, the Association estimates turnover runs $2,000 per employee. Let’s use full-service giant Olive Garden as a hypothetical (here's a look at how Darden is winning the war for talent). If it takes 100 people to staff one (it’s 60–120 hourly employees typically) and you go by a common 120 percent turnover figure, that’s $240,000 per restaurant, or $208 million across the 867-unit chain. It's far from an exact science—not close really given the part-time considerations, etc., and Olive Garden is not at the top end of the metric—but it offers a glimpse into how big of a deal this is for restaurants.
And the issue looms even larger at the GM level. Black Box Intelligence pegs the cost of replacing a single restaurant GM at about $14,000. What’s interesting, too, especially considering Taco Bell’s goal, is how GM salaries have moved—or staggered—in the past 10 years. Black Box studied GM pay at 10-year intervals for the last few years. What it found was that restaurant GMs are receiving less compensation today than they earned 10 years ago, once pay is adjusted for inflation. Taking that latter point into consideration, base salary for GMs in limited-service brands was 6 percent lower on average in 2018 than in 2008.
So, to Onyett’s hope, there’s little debate that offering $100,000 salaries to GMs at Taco Bell would be a hefty recruitment tool. And it would almost surely inspire current managers to lock into the brand for a while.
Beyond just offering more money, though, Taco Bell plans to include free financial planning (subsidized by Taco Bell corporate) for these GMs.
“The above-restaurant leaders really see this as a way to reinforce how important our general managers are to our business,” Onyett says. “And 80 percent of our employees get promoted into general managers. So as we continue to grow, we just think that this is an opportunity to reinforce how important this role is. And then we’ll be able to retain and grow our shift leads into those general manager roles as well.”
Yum! has an organizational tagline, “GMs No. 1,” that Onyett says reflects why they’re the most important leaders in the system. Having well-established and satisfied GMs trickles down throughout the entire company, she says. Entry-level team members see the opportunities GMs are afforded and that reinforces their desire to stay and climb the corporate ladder.
On that note, Taco Bell is introducing a “Makers” program this year for team members who want to “elevate their passion for the brand and want leadership experience.” Additionally, in a move that went into effect January 1, Taco Bell started offering all company employees the ability to receive 24 hours of paid sick time per calendar year. Previously, this was available only to manager-level workers.