The fast food industry is facing a growing crisis

The stress of learning new technology, without additional training or compensation, is getting real at some fast food restaurants.

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The stress of learning new technology, without additional training or compensation, is getting real at some fast food restaurants.
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Sorbis/Shutterstock

  • McDonald’s, Taco Bell, and other beloved fast-food eateries have implemented tons of new gadgets in their kitchens and restaurants.
  • But they don’t always train their employees on how to use them, and the new equipment often breaks down, fast food employees told Business Insider and Bloomberg.
  • That’s contributed to record high fast food employee turnover rates, MIT Technology Review reported in March. A restaurant that employs 20 people can expect to see 30 workers in the span of a year.

Zakkery Shoup would welcome the bevy of new tech like mobile ordering apps and self-service kiosks at Taco Bell, where he works – that is, if it weren’t always breaking.

“We deal with a lot of faulty equipment that seems to constantly stop working,” the Tennessee resident told Business Insider.

While the introduction of new equipment at fast-food restaurants is driving up stock prices, they’re frustrating employees like Shoup who have to use them every day.

And it’s part of the reason that fast food is experiencing its highest workforce turnover in 23 years, according to PeopleSoft data reported by MIT Technology Review last month.

The average turnover rate at a fast food joint has reached 150%.

That means a restaurant that employs 20 people can expect to see 30 workers in the span of a year – a record high since 1995, when PeopleSoft began recording the data.

This labor shortage is the biggest problem facing the fast-food industry in 2018, Dunkin’ Donuts CEO Nigel Travis told Business Insider in February.

Nationwide, nearly 3.8 million people are employed at fast food restaurants. Analysts told Bloomberg in a March article about McDonald’s that the fall in employer retention may be attributed due to new technology and an expectation for higher productivity despite a lack of wage bumps. And a job growth streak these past few years has created plentiful options for better employment.


There’s tons of new technology, which impresses shareholders

Your local Mickey D’s probably allows you to order from a kiosk. McDonald’s announced last June that it would introduce self-service kiosks in 2,500 additional stores along with mobile ordering in all locations.

Outlets have fretted that new tech at fast food joints will usher in layoffs.

But as Business Insider’s Hayley Peterson reported in June, McDonald’s has insisted it wouldn’t.

Instead, employees displaced by kiosk or app ordering would be reassigned to new roles providing table service and delivery, Peterson reported. These tactics would result in a 5% to 6% lift in sales in 2018 and a 2% lift in 2019, Cowen analyst Andrew Charles told Business Insider in the June report.


That tech is pushing out workers, but not through layoffs

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Experts say the onslaught of tech has complicated the operations of many fast food joints, causing longer lines.
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Getty Images

Across the industry, delivery service, mobile ordering, and at-table service are becoming exciting new additions. While those innovations pleases shareholders, workers like Shoup say the gadgets are complicating their jobs.

He said he feels like Taco Bell, his employer, doesn’t provide enough training to use all of the new equipment in the restaurant.

While Shoup has stayed at Taco Bell for eight months, Westley Williams of Florida left his job at McDonald’s due to additional responsibilities at his store. He and his coworkers had to manage the self-ordering kiosks, mobile app, and a slew of new menu items. He told Bloomberg that he did not get a raise for these added duties and found a new job at Checkers, where he didn’t have these added responsibilities.

“It’s more stressful now,” Williams told Bloomberg. “When we mess up a little bit because we’re getting used to something new, we get yelled at.”

Starbucks employees have reported that their popular ordering app has stiffed them out of tips. Jaime Prater, a shift supervisor at a Starbucks in California, told Business Insider’s Kate Taylor in March that tips were “in steady decline” due to an increase in mobile ordering and payment.

“As far as I can tell,” Prater said, “Starbucks corporate has not done anything to improve tipping … with the exception of the frequency of pay raises, which I believe is a direct answer to the decrease in tips, nationally.”


Disgruntled fast-food workers have plenty of alternatives if they want to quit their jobs

In the past, overworked employees may have just stayed put. But the flourishing economy allows workers to shop around. In January 2018, there were 1.1 unemployed persons for every available job, the best ratio in the last 15 years. Just five years earlier, in January 2013, 3.3 unemployed folks existed for each available job.

Job markets where there are fewer or an equal number of employees for each job eases the job search for less-qualified candidates. Rather than the prospective employee adapting their qualifications, employers must recruit workers and make their job more appealing.

But fast food work is rarely seen as appealing.

“Quick-service restaurants are having a little more trouble with job openings and finding workers,” Michael Harms, executive director of operations at People Report, told Bloomberg in March. “It’s the pace of work, the pace of technology, and the lower wage rate.”

As a result, some managers are implementing more flexible working hours and training opportunities to encourage frustrated workers to stick around.

But the best solution is increasing the pay, according to a report by UBS analyst Dennis Geiger released in February. As Business Insider’s Kate Taylor wrote in February, Starbucks has the highest average pay of fast service restaurants. Its employee satisfaction ranking was almost 30% higher than its competitors in the UBS report.

Meanwhile, Wendy’s, Sonic, and KFC had the lowest employee satisfaction ratings, according to the UBS analysis. Employee satisfaction sank the most at Wendy’s, Chipotle, Sonic, and McDonald’s from 2016 to 2017.

Dunkin’ Donuts CEO Nigel Travis said the inability to retain employees is the biggest challenge facing his industry this year. “One franchisee always quotes, ‘I can only get 60% of the labor I need,'” Travis told Business Insider in February.

The average crew member pay at Dunkin’ Donuts is $9 an hour.