Workers at Church’s Chicken, Pizza Hut and Checkers can now get expedited pay as U.S. restaurants grapple with a labor shortage that is not showing any signs of abating.
Restaurant chains are pulling out all the stops to attract and retain cooks and cashiers amid persistently low unemployment. The latest move: Same-day and next-day paychecks. Starting in June, eight Church’s Chicken restaurants will offer employees half of their earned pay the day after their shift.
“Some people just can’t wait two weeks to get paid,” Atlanta-based Church’s Chief Executive Joe Christina said.
With an accelerating economy and the U.S. jobless rate at a 49-year low, restaurants are hurting. The dining industry is growing increasingly desperate to attract and keep quality employees, and simply raising wages isn’t always enough. That’s why they are getting creative with hiring parties, text-message recruiting and signing bonuses.
Labor is “the No. 1 item” discussed among management, Christina said. “In all my years, it’s the toughest labor market that I can remember.”
Church hired Instant Financial, which also works with the owner of Outback Steakhouse and Checkers & Rally’s Restaurants.
A recent survey from the nonpartisan research organization NORC at the University of Chicago found that 51% of Americans wouldn’t be able to cover necessities without dipping into savings if they missed more than one paycheck.
That’s why Pizza Hut franchisee Erik Bittner is considering whether to mention the perk in the ads he uses to attract delivery drivers as he competes for their services with Uber and Lyft.
He added the benefit in March through Minneapolis-based Branch.
“The expectation in the future from employees is going to be they want their pay now,” said Bittner, whose company owns 12 Pizza Huts in Pennsylvania. “Why do I have to wait two weeks?”
Branch, which also provides its service to Taco Bell franchisees, charges a $2.99 fee for workers to get up to half of their wages the same day they worked. The startup has seen 150% growth among restaurant employees since introducing the early-wage part of the app in September.
Most Branch early-pay users are spending the fast cash on transportation, groceries and unexpected bills, Branch CEO Atif Siddiqi said. Expedited pay can “help keep employees happy.”
Patton writes for Bloomberg News.