McDonald’s, Uber, Lyft forced to use creativity to lure workers amid labor shortage
A white-hot economy has created staff shortages in an increasingly wide range of industries, prompting some employers to withhold higher wages and creative bonuses to lure much-needed workers into the fold .
Leisure and hospitality jobs in the United States, which have suffered the biggest losses from COVID-19, have increased in recent months. These positions accounted for more than half of May’s employment gains, according to the Labor Department’s monthly report.
Yet, with many employers struggling to fill vacancies, it is not clear whether these gains will be enough to close the employment gap, which is why large companies are trying to offer employees more money. work incentives.
Among besieged restaurants, McDonald’s (MCD) recently became the latest to offer sweeteners to potential new hires. According to a Wall Street Journal article, the Golden Arches offer perks like child care and tuition assistance, in addition to a higher hourly wage.
Another example is the Transportation Security Administration (TSA), which is offering hiring bonuses of $ 1,000 as part of its campaign to add 6,000 screening officers by the end of September. The agency has so far hired around 4,000 people, a TSA spokeswoman said, as more travelers – some of them unruly – take to the skies.
The tight labor market is forcing many employers to rethink how they will engage and reward workers. Increasingly, the debate over employee benefits mirrors conversations about how employers can attract remote workers to the office.
After spending more than a year at home, people are starting to venture out in droves again, even in the face of growing concerns about the Delta variant of COVID-19. However, ride-sharing giants Uber (UBER) and Lyft (LYFT) continue to struggle to get drivers back on the road, resulting in longer wait times for customers and higher trip prices.
While the labor shortage isn’t expected to end anytime soon, both companies are hopeful that the supply-demand mismatch will recover in the current quarter. But if the imbalance persists, they might consider making fundamental changes that would satisfy drivers.
Uber plans to fund education and career development programs, The Journal recently reported. A spokesperson for Uber, who declined to comment, pointed to the company’s announcement in April to provide a $ 250 million stimulus to drivers.
On the other hand, Lyft is looking for ways to cut driver spending, a spokesperson told Yahoo Finance.
“We are committed to ensuring the success of drivers using the Lyft platform, which is why we have invested in short-term incentives and are also investing in long-term upgrades to the Lyft products that drivers use to do so. their work, ”the spokesperson said. mentionned.
“The new features and the partnerships we have on-going will help make earning income with Lyft even easier, more efficient and more rewarding,” they added.
Why salary increases and bonuses are “not sustainable”
The current landscape highlights how companies “are trying to move from a bonus situation to a benefit because just offering bonuses and a higher salary is not sustainable,” said Michael Sherrod, instructor at the Texas Christian University’s Neeley School of Business, in an interview.
Even still, these efforts will not immediately solve the job problem, Sherrod added, especially in the odd-job economy.
Companies that employ temporary workers have come under extreme pressure to classify them as full-time employees, a battle that came to a head after California passed labor reforms designed to improve wages and working conditions .
“I would lobby for a third designation of a type of worker that falls between a full-time W2 and an independent contractor,” Sherrod suggested.
“I think this will be the only solution that will actually allow concert companies to keep hiring people, but without giving them all the things they need to keep someone full time.”
Still, many drivers got a taste of what it’s like to work outside of the gig economy. Some have moved on to other jobs or are waiting for their unemployment benefits to end, while other gig workers have become more frustrated with carpool compensation, especially when prices rise.
Even with the high fares passengers are paying, drivers are not getting their fair share of the reduction, reports suggest. Meanwhile, activists pushed companies to pay their workers a “living wage”.
“You have a lot of people on YouTube, for example, who are drivers, who are constantly calling strikes, asking for more pay or whatever,” Sherrod said. “And some of them are gaining a bit of traction. So you will see constant upheavals.
The labor shortage has prompted a growing number of workers to extract more value, so it may only be a matter of time before Uber and Lyft – and indeed, other companies. – don’t listen.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
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