A Starbucks location in Manhattan is offering a $200 signing bonus to anyone who joins by the end of the month. Kroger said by the end of the year the average hourly rate at its grocery stores will be about $21, when comprehensive benefits are considered, up from $15.50 in March. And recruiting efforts have spread far and wide, with Church’s Chicken passing out coupon books that say “Always Hiring.”
At Amazon, warehouse workers and other hourly employees got raises this year as the retailer seeks to retain talent. Amazon is spending heavily on signing incentives, Chief Financial Officer Brian Olsavsky said during a call with analysts last month.
“It’s a very competitive labor market,” Olsavsky said.
Darius Adamczyk, the CEO of Honeywell International Inc., is doling out wage hikes of more than 10% for some factory workers. He’s trying to raise prices to offset steeper costs for labor, materials and services. Those higher wages will probably stick, since companies rarely reverse increased pay rates.
“If labor costs go up permanently, then we’re going to have to figure out how we sustain at least some level of that pricing power,” Adamczyk said in an interview.
In Iowa, Sacco says his Your Pie pizzerias have been able to hire a few more people after offering higher wages. He pays about $10.50 an hour, and workers often earn another $2 an hour in tips. His other recruiting pitch is a better schedule. He’s poached a few workers from nearby rivals that are open until 1 a.m., later than his restaurants’ 9:30 p.m. closing time.
There are some businesses who say the tide is turning in their favor. McDonald’s Corp. CEO Chris Kempczinski said after raising wages about 5% in its U.S. locations, applications have increased significantly, particularly as the federal stimulus has ended in parts of the country. Critics have argued that workers have stayed on the sidelines because of cash transfers and unemployment benefits.
Noodles & Co., a fast-casual restaurant chain, saw a 70% jump in applications in June compared with April.
“We’re starting to see the light at the end of the tunnel in terms of the whole staffing shortage,” CEO Dave Boennighausen said.
Labor Secretary Marty Walsh says the U.S. job market is healthy as people resume traveling and eating out at restaurants, though he acknowledged that delta variant poses a risk. Vaccinations and wage growth are encouraging people to return to the workforce, though salaries may have to go higher, he said in an interview Aug. 6 after the payrolls report.
“Wage growth is good. It’s good for the American worker,” Walsh told Bloomberg Television. “In some sectors, we’re definitely going to need to see higher wage growth for people to come back to work. But I think where we’re headed right now, all signs are incrementally going in a good, positive direction.”
—With assistance from Angelica LaVito, Thomas Black, Matthew Boesler and Alex Tanzi.
This article was provided by Bloomberg News.