Restaurant Chains Court Gen Z Workers as Turnover Rates Remain High

Restaurant Chains Court Gen Z Workers as Turnover Rates Remain High

Labor expert said brands that use automation might also attract tech-focused Gen Z workers
Gen Z with Miso Robotics' Flippy

Despite restaurants’ best efforts, the industry is still experiencing triple-digit turnover rates.

Landed, a labor platform that assists chains like McDonald’s, Wendy’s, and Chick-fil-A in screening and hiring workers, has seen turnover rates in the industry hovering at 150%.

According to the National Restaurant Association’s State of the Industry report, almost one-third of restaurant operators cited recruiting and retaining employees as their top challenge this year. These challenges are forcing chains to reassess the perks they offer workers to prevent employee turnover, particularly among Gen Z.

One brand taking extra steps to recruit young workers is Chipotle. Earlier this year, the chain launched a hiring campaign targeting Gen Z workers, who account for about 73% of its workforce. To achieve a goal of 19,000 hires, Chipotle introduced new benefits, including a 401(k) program tailored to help workers save for retirement while simultaneously paying off student debt; a high-tech Visa card through that builds credit and offers faster access to paychecks without incurring fees; and a tuition reimbursement program that includes a 401(k) match of up to 4% of an eligible employee’s salary if they make student loan payments.

In a recent earnings call, Chipotle CEO Brian Niccol said the new perks are helping with retention. However, Chipotle, based in Newport Beach, CA, is also looking at automation to help in this new effort.

Vivian Wang, CEO of Landed, said brands that use automation might also attract Gen Z, as Gen Z workers care about employers who use technology to support their jobs. Kitchen automation, she noted, is something workers are likely to embrace as robotics can handle tasks that are less fulfilling, such as frying foods.

“Everyone wants to find fulfillment in their work, and if they’re doing menial tasks all day for their job, it’s going to be a lot less rewarding for them,” she said.

Wang predicts restaurant investments in automation to increase this year, especially in California. Under a new law that went into effect April 1, California fast-food workers are getting nearly a 30% pay bump to $20 an hour.

In response, fast-food chains are reducing headcount, she said, and automation adoption is likely to rise to offset the reduction in staffing. Wang added, California is where it will likely begin first due to necessity.

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Nancy Luna

Nancy Luna is a veteran business reporter renowned for her in-depth coverage of the restaurant industry. Since 2005, Nancy has been delving into the intricate dynamics of the culinary world, providing her audience with comprehensive insights into everything from fast food chains to the latest restaurant tech innovations.

She specializes in writing about food tech companies and disruptors impacting restaurants and grocery chains such as DoorDash, Uber Eats, Grubhub, Instacart, Olo, Lunchbox, Toast, Miso Robotics, ConverseNow, and SoundHound.

Her keen eye for spotting emerging trends and her ability to dissect complex technologies have established her as a go-to source for understanding the intersection of food and technology.

Over the years, she has delved behind the scenes of industry giants such as McDonald’s, Taco Bell, Jack in the Box, Subway, Chipotle, Domino’s, and In-N-Out Burger. She provides her audience with unparalleled access and insightful stories.

Throughout her career, Nancy Luna has held notable positions as a national correspondent for Business Insider and a senior editor and tech editor for Nation’s Restaurant News. During her tenure at the Orange County Register, she gained national recognition for her blog, Fast Food Maven, which she penned from 2007 to 2012. Her coverage extended beyond the dining experience to encompass significant events such as the Southern California grocery strikes and the impact of the Great Recession on the restaurant industry.

Currently based in Southern California, Nancy Luna continues her work as a freelance journalist and restaurant consultant, leveraging her extensive expertise to provide valuable insights and guidance to her clients and readers. She remains a trusted voice in the industry, dedicated to delivering compelling narratives and staying at the forefront of the ever-evolving restaurant landscape.