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A Chick-fil-A location in Madison, Ala., on Saturday told its Facebook followers that it would close its dining room.
The reason had nothing to do with the surge in coronavirus hitting the state but in the lack of employees able to work. “We are seeing far less job applicants or people not showing up for their interviews,” Norman Dull, the location’s operator, said in the post. “Unfortunately, Chick-fil-A is not immune to this labor shortage.”
There are two things worth noting here: Chick-fil-A is generally considered an attractive employer, especially in the South near its Atlanta headquarters, thanks to its Sundays off.
And Alabama ended its extra unemployment benefits in June.
That experience would suggest that the early end of excess unemployment benefits isn’t quite having the intended impact of getting people into jobs. Yet some operators do say that it’s bringing in more applicants.
Pete Pascuzzi, CEO of the 40-unit Mexican restaurant chain operator Mexican Restaurants Inc., said that his restaurants in Texas and Oklahoma have seen an influx of applicants after those states ended excess benefits.
“The week after that we started to get quite a bit more” applications, he said for a future episode of the RB podcast “A Deeper Dive. “It’s been great for us.”
That backs up a contention from McDonald’s CEO Chris Kempczinski, who said last month that his chain saw more applicants in states that ended their unemployment benefits. Similarly, Wendy’s CEO Todd Penegor earlier this month said his chain’s restaurants are seeing improvement in application flow and staffing after federal benefits end.
Those comments provide potentially good news to operators hoping for an end to their labor challenges once the unemployment benefits end. More than half of states, 26, have already ended those benefits.
Yet broader studies also suggest that it won’t be a panacea to those problems. According to the payroll firm Homebase, employment fell 0.9% last month in states that ended federal benefits between mid-June and mid-July. By comparison, employment rose 2.3% in the states that kept those benefits.
According to the benefits firm UKG, there was no discernable difference in workforce hours in states where the benefits ended versus those where they continued. States that continued those benefits, in fact, had a higher percentage of growth in what it calls “workforce activity.”
As my colleague Peter Romeo pointed out this week, there are a lot of factors in why people want to avoid restaurants—among them is the “physical and mental duress” that has accompanied restaurant work during the pandemic.
That study, from Black Box Intelligence and Snagajob, also found that childcare is a major factor keeping people from applying—which helps explain why McDonald’s operators are testing childcare benefits.
The upshot: Restaurants likely need to spend more time and effort making their workforce cultures and pay more competitive even after the benefits end. And taking steps to protect employees from on-the-job challenges such as angry customers would also go a long way toward helping their labor problems.
If a Chick-fil-A in Alabama can struggle to find workers enough that it restricts its service, then anybody can.
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