Lisa Aragon just couldn’t get the headhunter to take no for an answer. Five times in a month, she turned down enticements, including higher pay and four weeks of paid vacation.

Aragon doesn’t work in Silicon Valley or on Wall Street. Far from it. She is a manager at a Wendy’s in Albuquerque, N.M. In 20 years, Aragon had never been pursued as aggressively as she had by the recruiter from the Pilot Flying J chain of truck stops, a major franchisee of fast-food restaurants.

“I told him, ‘I’m happy where I’m at,’ ” said Aragon, 41, who already looked forward to quarterly bonuses and a bump for her work as a trainer. “There’s no need for change right now.”

In today’s tight labor market, restaurants are embroiled in a full-on food fight over workers. The rank-and-file is winning referral bonuses, free meals and days off, and the scarcity of candidates may be raising the minimum wage without help from lawmakers. While good news for workers, it may not be for companies and customers. Restaurants will either have to raise prices or accept falling margins. Some stores’ service is suffering.

The U.S. unemployment rate was 4.7 percent in December, near a nine-year low. With its insatiable appetite for new workers, the fast-food business serves as a leading indicator of a labor shortage. In September, annual turnover for restaurant workers jumped to 113 percent, the highest since industry tracker People Report began collecting data in 1995.

“It’s a hot job market,” said Michael Harms, executive director of operations at Dallas-based TDn2K, People Report’s parent. “Every employee, whether they’re 17 years old or 40 years old, has options.”

Aragon’s boss is already pulling out all the stops to keep employees. Over the past year, Eddie Rodriguez, who operates 177 Wendy’s in Florida, New Mexico and Texas, raised hourly pay by nearly a dollar, to an average $9.05. Rodriguez gave referral bonuses of up to $250 to employees who found prospects. He offered more flexible schedules and used his own headhunters to find staff for his corporate office in Pompano Beach, Fla.

He also makes sure he doesn’t take anyone for granted. “Today’s employee, they want to feel wanted,” Rodriguez said.

Customers, however, may feel less appreciated. Rodriguez can’t find enough employees for the lunchtime rush, which means it takes longer to get a cheeseburger.


Patton writes for Bloomberg News.