Chipotle’s Journey to Grow its Labor Force Continues

The restaurant industry added 50,300 or so jobs in March, which left it 60,000 short of recovering COVID-19 losses. The total figure of 12.3 million is nearly level with February 2020. But just because the numbers are similar doesn’t mean the makeup is. For one, wage levels in 2023 are up 8 percent at full-service restaurants and 5.6 percent in limited service, compared to a roughly 3 percent 15-year average. As inflation continues, workers expect rates to follow. “A sticky, lingering challenge that will persist even after inflation finally eases, hopefully later in the year,” financial service company Rabobank said in a recent report.

The cost behind that 12.3 million pool has lifted multiple tiers. You could argue, in some markets, the bottom rung has left the ladder, at least versus historical norms. And then there’s the typical, cyclical turnover nature of a sector that heavily relies on part-time labor. According to industry research, in the U.S., only 54 percent of quick-service employees reached 90 days of working before quitting in 2022. When you consider the National Restaurant Association’s data that first-time employees filled 22 percent of openings last year (27 percent in quick service), the labor line is jagged at best, and it’s one that needs to be monitored monthly on a target and forecast basis, if not daily. These days, it often boils down to proper scheduling, and understanding what “fully staffed” means in a changed operating dynamic.

Chipotle on Tuesday released its 2022 Sustainability Report alongside news of its all-electric restaurant design. In it were updated turnover figures that provide a crystal view into how pressing this labor battle still is, even for a brand that’s invested heavily across myriad initiatives:

Turnover rates, and how they’re tracking:

Restaurant hourly (crew, kitchen leader, service leader)

2022: 193 percent
2021: 194 percent
2020: 141 percent
2018: 144 percent
2017: 158 percent
2016: 130.1 percent

Restaurant salary (apprentice, GM, restaurateur)

2022: 44 percent
2021: 43 percent
2020: 31 percent
2018: 49.1 percent
2017: 37.1 percent
2016: 38.1 percent

Restaurant field managers (field leaders, team directors, regional VP)

2022: 19 percent
2021: 21 percent
2020: 16 percent
2018: 26.3 percent
2017: 18.7 percent

Senior management

2022: 12 percent
2021: 0 percent

In 2022, Chipotle’s rate of internal promotion was 90 percent, carrying over similar results from previous years. This measures the percentage of workers promoted into an apprentice position versus apprentice and GM hires at Chipotle.

How it broke down:

U.S. (2022)

Hires: 188,116
Promotions: 25,810
Total hires: 213,926
Hire rate: 88 percent
Promotion rate: 12 percent

To apprentice

Hires: 1,867
Promotions: 4,712
Total hires: 6,579
Hire rate: 28 percent
Promotion rate: 72 percent

To GM

Hires: 1,483
Promotions: 1,702
Total hires: 3,185
Hire rate: 47 percent
Promotion rate: 53 percent

In total, systemwide, Chipotle had about 22,000 internal promotions. Ninety percent, as noted, were internal, including 100 percent of U.S. regional VP roles, 81 percent of team directors, and 74 percent of field leaders positions.

Chipotle today pays all entry-level hourly employees above the federal minimum wage, and at or above state or local minimum wages, where applicable. As those prior stats about rising inflation suggest, it’s a table stakes reality.

Average yearly pay at Chipotle (2022, includes benefits and bonuses)

Crew, full time: $41,300
Kitchen leader: $46,300
Service leader: $49,400
Apprentice: $71,000
GM: $87,500
Certified training manager: $106,600
Restaurateur: $112,300-plus

As a refresher, Chipotle boosted its employee offerings in 2021 on the wage front, added referral bonuses, and spent time refining pathways for advancement. Crew members can now become “restaurateurs,” which is what Chipotle calls its highest GM role, in as little as three and half years. If they get there, as 2022 showed, compensation can climb well into the six figures.

Chipotle employs about 105,000 people across five countries and 3,187 restaurants. The development path looks as follows:

Crew–kitchen leader–service leader–apprentice–GM–restaurateur–certified training manager–field leader–team director–regional VP.

Chipotle awarded $14 million in tuition assistance to 4,800-plus employees last year; $37 million in bonuses; and got its average wage to $16. The brand also plans to continue its partnership with Guild to offer tuition assistance and provide debt free degrees as well as certificates for skills that are relevant to employees. There are now nearly 100 degrees at 10 universities offered for employees to receive a degree, with the brand covering the full tuition cost.

Here’s a look at how the chain’s “Cultivate Me” benefits program spreads out.

Chipotle graphic on employee benefits.

Center to Chipotle’s internal talent creation efforts is its development and training schedules. In March 2022, it revamped the company’s Learning Management System (LMS) to create what’s called “the Spice Hub.” Every restaurant employee receives shoulder-to-shoulder training, coaching and validation, every shift, the company said. New kitchen leaders go through three weeks of training, while fresh service leaders and apprentices each receive four.

Crew orientation: two hours
Crew line training: one week
Crew cash training: one week
Crew digital training: one week
Crew prep training: one week
Crew grill training: one week
Crew certified trainer training: one week
Kitchen leader training: three weeks
Service leader training: four weeks
Apprentice training: four weeks
Internal GM training: three weeks
External GM training: 12 weeks (one clear example of why Chipotle is leaning so heavily into internal development)

Chipotle placed GM stability atop its priorities in this labor approach. “We have created development programs for our GMs designed to develop leadership capabilities, which enables them to increase the engagement and effectiveness of their teams. They learn important skills such as emotional intelligence, situational leadership, food safety, coaching, and feedback,” the company.

Chipotle’s GM stability program focuses on preparing a cross-functional cohort of mid-level managers “for the future of work and leadership,” it added. It’s a nine-month program where participants “learn the critical capabilities of leading oneself, to leading others, to leading the business with topics designed to stretch capabilities and improve decision-making skills.”

Chipotle said in the report the initial cohort of this initiative, titled the Leadership Evolution and Development Program, or LEAD, graduated 36, and nearly 60 percent of participants were promoted after completion.

The brand also boasts an Executive Development program that aims to develop team directors, with a curriculum around leadership, marketing, business and finance, data and analytics, ESG and hospitality, and training across various functions within the company. There’s online executive coaching for mid- and senior-level leaders as well.

“Through robust talent calibration sessions with senior leaders, we continue to identify our next level of leaders and pair them with development programs designed to prepare them for future opportunities,” Chipotle said. “In 2022, we launched learning programs specifically focused on preparing emerging leaders for roles within our field operations or our Restaurant Support Center.

Getting to a more granular level, Chipotle last year launched Voice of Employee surveys to more than 88,000 workers, including crew members. It returned an average response rate of 66 percent.

54 percent: Participation rate of first hourly employee engagement survey
79 percent: Participation rate of restaurant support center engagement survey
80 percent: Rate of enthusiasm from overall employees about Chipotle’s purpose and values

This calendar, Chipotle said it will unveil an “always on” employee listening program designed to collect real-tim, actionable feedback at all levels. “This approach to employee listening steers away from the method of gathering employee feedback once a year; instead, it allows our people to share feedback at more frequent intervals [aligned with specific employee milestones] throughout the year,” the company said. “This effectively evolves the traditional feedback model and enables us to proactively shape programs based on employee sentiment.”

In 2022, Chipotle engaged the Trevor Project on inclusivity training. As of December 31, 2022, 50 percent of its U.S.-based employee population was female and roughly 67 percent was comprised of racial and ethnic minorities.

Gender diversity

Restaurant support center