Sales Job Watch Apr 28 2011

McDonald's Hiring Push Lands 62,000 Employees

By annie gasparro

McDonald's Corp.'s has hired 62,000 full- and part-time employees in conjunction with what it called National Hiring Day on April 19.

The company hoped to recast the image of its "McJobs" as part of the hiring push. Exceeding its original goal of hiring 50,000 people, McDonald's says it was able to fill the need of extra hands at its restaurants going into the busier summer months.

The ubiquitous fast-food restaurant chain is preparing to add more fruit smoothie flavors to its line of popular McCafe beverages, and it has other food products in the pipeline as well. With 14,000 stores in the U.S., the hires pan out to an average of four or five people at each location. There could be a need for more if McDonald's business continues to rise and isn't thwarted by higher gas prices this summer.

"We were really pleased with not just the number of applicants, but also the quality of applicants," said Danitra Barnett, vice president of human resources for McDonald's USA. "It left us with a great pool of candidates we can continue to draw from going forward if we need to hire more."

She says the company received about 1 million applicants as part of the hiring push. About 1,000 of the hires made were for management positions.

McDonald's has to have a well-oiled machine in place to pull off a mass hiring in such a short period of time.

The restaurant industry, especially fast-food companies, are facing hiring headwinds this year, as the government cracks down on the immigration status of employees and healthcare reform drives up labor costs.

For instance, Chipotle Mexican Grill Inc. and P.F. Chang's China Bistro Inc. have both experienced significant sales hits related to immigration and customs investigations.

"Clearly in dining, and more specifically quick service, labor costs are a big part of the company overall, and turnover is high because these are not high-paid jobs," said Jim Holincheck, managing vice president at Gartner Research, where he heads up the human capital management team.

Coordinating hiring initiatives across stores, as McDonald's did with its recent push, can better leverage labor pools of various areas, saving money in the process, he said.

"In sticky situations, with labor costs rising, folks are getting really sophisticated thinking about labor cost issues," Holincheck said. "They're trying to squeeze every penny that they can out of things now."

About one-third of restaurants' costs are related to labor, said Liz Moughan, head of the retail practice group for Kronos, a workforce management solutions provider, with quick-service clients such as Yum Brands Inc. and Burger King. By finding ways to cut labor costs, restaurants can avoid more sales-impacting measures like raising menu prices, she said.

Cross-checking employee background information with various departments to avoid legal issues and conducting extensive behavioral assessments are becoming more crucial to the hiring process.

"To be able to reduce attrition can be a really significant increase for a restaurant's return on investment on training costs," said Susan Rossnick, vice president of hiring solutions at Kronos. "Behavioral assessments help create a better understanding between the manager and candidate, so that the employee ends up staying longer."

Annie Gasparro is a reporter for Dow Jones Newswires where this story originally appeared. Write to her here.

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