Blake Casper, who owns 60 McDonald's restaurants around Tampa, said one of his general managers and supervisors came up with the plan to pay would-be employees just to show up for the interview after he told them to "do whatever you need to do" to hire more staff.
"At this point, if we can't keep our drive-thrus moving, then I'll pay $50 for an interview," said Casper.
The reopening of the American economy has allowed many businesses to expand, but Casper said "enhanced unemployment benefits" have cut into the potential number of applicants for his stores. This has led to a serious labor shortage, and Casper said it has not been this difficult to hire people since the late 1990s. (Related: LABOR COLLAPSE: Small business owners can't compete with federal stimulus, struggle to hire workers.)
"It's a perfect storm right now," explained Casper. "You've got a lot of people with a lot of money, and they're out there shopping. And then, on the flip side, we're scrambling for help."
Unfortunately for Casper, simply offering applicants $50 to go to the interview has not convinced a lot of people.
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"I tried to make a little splash," said James Meadowcraft, the manager at one of Casper's stores. He explained that the store posted a sign outside saying that interviews would be conducted from Mondays through Fridays at 2 p.m. and that applicants would be given $50 just to sit down for the interview.
But after two weeks, Meadowcraft took down the sign because it failed to bring in even a single candidate. "No one responded," he said. "I didn't even get anyone trying to scam us."
Casper's stores have found more success through referral programs, offering signing bonuses and allowing people to apply via text message. Using these programs, his 60 McDonald's restaurants were able to hire 115 new workers in a week.
The labor shortage is also forcing Casper and many of his fellow franchisees to raise their wages. He is currently offering new hires $12 an hour – $3 above Florida's minimum wage. He is considering raising it to $13 an hour in an effort to attract more employees.
"The biggest challenge out there is the federal government and the state government are going to continue with this unemployment because that is truly creating the incentive to not work right now," explained Casper, echoing the concerns raised by many Republican lawmakers regarding the pandemic relief bills. "And, how do you blame somebody? You can make more money on unemployment – and so, we've got to be at least above that."
Restaurant industry desperate for more workers
While Casper has been able to find a lot of workers, he still has a long way to go before all of the job openings in his restaurants are filled up. He is not alone in this situation.
According to a March survey by the National Federation of Independent Business, 42 percent of small business owners are still having difficulties filling up job openings even though millions of Americans are unemployed. This in turn is hurting their ability to keep up with the renewed demand for products or services.
"We are struggling to get people," said one McDonald's franchisee who spoke to Business Insider under the condition of anonymity. "I don't have enough. Can't get enough. Wish I had enough."
A lot of business owners are saying their potential employees are concerned about catching the Wuhan coronavirus (COVID-19) at the workplace.
Others, like Casper, said their would-be workers prefer to live off unemployment benefits. This view is supported by a study released in March by the National Bureau of Economic Research, which found that a 10 percent increase in unemployment benefits during the pandemic led to a 3.6 percent drop in job applications.
Childcare is also an issue, as many potential workers are unable to juggle work with raising their children. A Census survey taken in late March showed that 6.3 million people were unable to work because all of their time was focused on taking care of their children. This survey also found an additional 4.1 million unemployed people refusing to go back to work due to their fears of contracting or spreading the coronavirus.
According to McDonald's, the company usually gets bombarded with job applications leading into the summer as franchises all over the country ramp up their recruitment efforts. The company has had to intervene by hosting a system-wide webcast to talk about best practices in staffing.
Franchise owners at McDonald's and other fast-food restaurants unable to fill up their openings have decided to delay the reopening of their indoor dining rooms, which were shut down last year at the beginning of the pandemic.
"It's just craziness out there," said Dunkin' Donuts franchisee John Motta, who also serves as the chairman of the Coalition of Franchisee Associations. "People are closing early, people are not opening lobbies."
"This is the COVID of 2021," added Motta. "This is the pandemic of 2021 – lack of people to work."
Learn more about how the coronavirus pandemic has affected small businesses by reading the latest articles at Pandemic.news.
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