Invest in workforces to stimulate new blood

May 07, 2013

If retailers and fast feeders cultivate educated workforces, long-term gains could be great.

Many U.S. households remain financially compromised post-recession and feel little relief in the economic recovery.  This is playing out in fast food and retail sectors.

Older workers displaced from better-paying jobs—or unable to land any to begin with—are snatching minimum wage fast-food positions and pushing teens out of these typical workforce entry points.  Teens land just 16% of today’s fast-food jobs, down from 25% a decade ago, reports NBC.

Although the Bureau of Labor Statistics says 42% of fast-food and restaurant workers over the age of 25 have some college education, including 753,000 with a 4-year degree or higher, their erratic hours limit their pay, keep many on food stamps, and force many to cobble together several jobs to equate a full-time salary.

And at 57-store Belle Foods, hundreds of full-time employees are reportedly being cut this spring and offered part-time positions instead. 

For workers, in our view at The Lempert Report, workforce decisions like these represent a huge trade-down in career prospects and humility for the workforce.  They’re also a wasted opportunity for both foodservice and retail operators that fail to cultivate educated workers, who could instead be inspired to serve customers better and increase chain profits.  We’ve reported previously on more equitable workforce approaches of Costco, Trader Joe’s and Whole Foods Market, which all perform well.

No wonder fast-food workers in New York City and Chicago recently struck for higher wages.  And when Wendy’s CFO cut the chain’s Affordable Care Act cost outlook by 80% in March to about $5,000 per restaurant beginning in 2014, that took the air out of industry bluster about the expense of health reform and its effect on employment. 

We urge the trade to wake up to its bounty of workforce talent that fell in its lap due to the difficult economy—and instead of business as usual, conceive ways to motivate them to stay and improve enterprises.  One positive example is Safeway’s innovative programs to build a fitter workforce while saving on healthcare premiums.  This spring, Meijer is running a health and wellness contest for employees with NuVal called the Nu-Me Weight Loss Challenge. While winning teams share prize money, Meijer makes its workers more aware of the nutritional labeling system in their stores, which they can speak about more knowledgeably with shoppers.