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Employee Retention of McDonald's

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Pratik Kukreja
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Employee Retention of McDonald's - April 14th, 2011

Employee Retention of McDonald : McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving more than 58 million customers daily.[3] In addition to its signature restaurant chain, McDonald’s Corporation held a minority interest in Pret A Manger until 2008, was a major investor in the Chipotle Mexican Grill until 2006,[4] and owned the restaurant chain Boston Market until 2007.[5]
A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.[6]
McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include alternatives considered healthier such as salads, wraps and fruit.

As anyone in the restaurant business knows, employee retention is a constant struggle. It’s hard enough finding someone reliable and capable, but when you do, how do you entice him/her to stay?
Employees leave for a variety of reasons, of course, but one of the most common is that they want a different environment and they don’t think they can have that without changing jobs.
McDonald’s Europe decided to do something about this perception. In September 2006, it launched its McPassport program, an official certification program designed to support the movement of restaurant employees throughout the European Union.
“The McPassport is a physical document, resembling a real passport, that certifies crew competencies and thus enables a McPassport holder to be eligible for a McDonald’s job in the 25 countries of the European Union,” says Carmen Vroonen, spokesperson for McDonald’s Europe.
To earn McPassport certification, employees must be trained and earn a “good” rating or above in the following stations: service, dining area, hospitality, production, fried products, grills, buns, and dressing. No minimum seniority is required to apply for certification.
McDonald’s Europe hopes the McPassport program will appeal to its employees and that they will see it as a tool to help them with long-term goals.
“Many of our employees have a desire to travel at various points in their lives,” explains Vroonen, “some before going on to full time study after school, some between university and embarking on their career, and some just to satisfy a travel bug. McDonald’s operations are consistent throughout the world, and we have an opportunity to assist people to find work when they have taken the decision to move away from home.”
If an employee decides to leave one McDonald’s restaurant, that particular operator must look for another employee, but at least the chain itself isn’t losing a reliable employee. So, one restaurant’s loss is another restaurant’s gain. And all the time—and money—spent training that employee is not lost since the new employer can take advantage of it. That means a fatter bottom line, and perhaps even more important, less stress for managers and operators.
“Our restaurant managers are always looking for motivated people with the right skills to serve our customers,” says Vroonen. “The McPassport holders have received all the training they need, and they have experience working in a McDonald’s restaurant.
Employees come out ahead too because the chain actually provides the mode to help them find openings. McPassport holders can visit www.yourtalentmcd.com to search vacancies in other countries. If interested, they are invited to move through the website; since they’re McPassport holders, they will be considered for the position.

Since launching McPassport, Vroonen says both employees and operators have been excited about the program. The first McPassport holders are currently working in the United Kingdom, Spain, and Italy.
On the surface, it stands to reason a similar program would work well in the United States with employees taking advantage of job opportunities in other states.
“We have shared our McPassport program with other areas of the world; there was recognition that the McPassport offers a lot of opportunities to our employees,” says Vroonen. But Tara McLaren, a spokesperson for McDonald’s in the United States, says there are no plans to implement the program at this time.
Still, it’s interesting to ponder how differently one worldwide brand handles the same problem. There’s no doubt culture and societal elements play a large role in both attracting and retaining employees. It all boils down to knowing who your workers are and what motivates them.
It’s possible the McPassport program would be as effective in America. U.S. workers might not find it as alluring to travel to other states in the same way European workers want to visit other countries when they’re young. After all, working in Indiana and Kentucky would probably be similar, but the same is not true of an overseas employee who moves from the United Kingdom to Italy to work.
McDonald’s employees and operators aren’t the only ones embracing the McPassport program. The European Commission is happy about it too because the program helps promote one of its initiatives as well: worker mobility.
“There is very little mobility culture amongst most of the European workforce,” says Vladimir Spidla, European commissioner for employment, social affairs, and equal opportunities. “The European Union and Member States have a vital role to sensitize all citizens to the rights of workers to circulate freely within the EU. The support from leading companies such as McDonald’s is crucial to the development of a long-term mobility culture.” Currently only 2 percent of Europeans live and work in an EU country other than their country of origin. The aim of the European Year of Workers’ Mobility program has been to create awareness among European citizens regarding their job mobility rights.

McDonald’s released its 2011 Corporate Responsibility Report, which detailed its work toward in the areas of community relations, nutrition and wellbeing, and environmental progress. Indeed, the most reported news to come out of the report was the global company’s new commitment to improve the sustainability of its supply chain – for example, making sure its palm oil (in which is fries are fried) is certified sustainable by 2015, and working toward ensuring that its beef and poultry wasn’t raised in deforested parts of the Amazonian jungle.

The company chalks up its new environmental commitment to its values, 7 principles the Corporate Responsibility report mentions frequently – particularly the one about operating the business ethically.

The report also covers, in detail, the issues around employee retention, learning and development, and diversity. What is interesting is that while the values are frequently called into play in this section as well, the section dealing with employee experience is largely devoid of any references to sustainability.

It appears the company’s sustainability strategy – while considerable – is reserved for outreach. But internally, it’s a different story. The company focuses its internal efforts at retention, it’s Employee Value Proposition on “Family & Friends, Future, and Flexibity.”

McDonald’s acknowledges in the report that, as part of the fast food industry, turnaround is a problem for the company. So it works hard to provide an environment where staff feel emotionally connected to the company (and individual location) – whether that means providing learning and development opportunities, upward mobility, or morale-boosting activities.

For example, in 2009-2010, the company held its first global employee singing competition, the Voice of McDonald’s Contest, which included nearly 10,500 participants from 51 countries. The grand prize of US$25,000 was awarded to Chenee Capuyan from the Philippines.

The company has also been recognized several times for its work in gender diversity and the promotion of women. In fact, nearly 50% of all of McDonald’s-owned restaurants are managed by women. In 2009 (the last year for which there is data) 26.5% of worldwide top management team (VP and above) are women.

I'm not a big user of McDonald's, but I get that the rest of America is. I'm usually looking for a leaner option when I'm out and about, although I've been known to slide through the drive through to order plain hamburgers from time to time - a lean option that is pretty reasonably priced in my area ($.90 per)...

But enough about my sensitive tastes. The WSJ recently did a feature on the home of Ronald McDonald thinking through an employment brand revamp, to better engage employees and cut turnover.

Their current annualized turnover number? 44% per the article. Can that be right? I would have guessed it much higher. From the WSJ via the wire at the Baltimore Sun:

"Such numbers can mean big money for McDonald's. A senior executive recently put the chain's annual employee turnover at 700,000 - or nearly 44 percent of the company's 1.6 million employees worldwide.

Managerial turnover is around 20 percent globally, while that of crew members averages 80 percent to 90 percent, with significant differences by country, Floersch said. He wouldn't disclose statistics for individual markets but pointed to China and Germany as having among the lowest annual turnover.

McDonald's is putting particular emphasis on deterring people from quitting within the first three months of being hired. If they stay beyond that, their productivity - and the company's return on its training investment - both improve.

Also, the fewer new employees a restaurant manager needs to recruit, the more money that store is likely to make. An experienced crew and manager can add as much as $100,000 to its annual sales, the company estimates. And low turnover can save perhaps $10,000 in annual overhead.

To cut turnover, managers are interviewing crew and other employees to determine what they value most about their jobs, and what might be done to improve them.

One key topic these days is health insurance. "We're working with our owner-operators to provide medical coverage at reasonable rates," Floersch said.

Because of its size, McDonald's can obtain a significantly lower group rate from its primary health insurer, the Blue Cross & Blue Shield Association. So far about 70 percent of its franchisees are under the company's umbrella plan. The amount of an employee's co-pay is determined by the franchise."

So, I thought the 44% number overall was low - after all, aren't the majority of their workers the folks on the line within the retail locations. If you gave me the 80 or 90% number, I would have accepted that - but 44%? Maybe that's the global number and the loyal Chinese worker is making up for the 150% burn rate stateside.

The following information highlights McDonald's benefits for Staff (e.g., home office, division or region office) employees located in the United States. Highlights of McDonald's Corporation benefits for U.S. Restaurant Management and Crew employees can be found on the USA Careers site.
McDonald's benefits program is designed to attract, retain and engage talented people who will deliver strong performance and help McDonald's achieve our business goals and objectives.
For McDonald's Corporation U.S. employees at corporate, division and region offices, our many benefits are organized into four categories:
Your Health and Protection

Our health and insurance benefits
Medical
Vision supplement plan
Dental
Flexible spending accounts
Short and long term disability
Employee and dependent life insurance
Accidental death & dismemberment (AD&D)
Travel and business travel accident insurance
Your Pay and Rewards

Our compensation, reward and recognition programs
Base pay
Incentive pay
Company car program
Recognition programs
Investing in Your Future

Our savings, investment and financial management programs
Profit Sharing and Savings Plan (includes our 401(k) feature)
MCDirect Shares
Mc$ave
Credit union
Financial planning services
Helping Balance Your Work and Life

Our work/life benefits
Vacation
Holidays
Anniversary Splash
Sabbatical program
Summer Hours
Leave of absence
Alternative Work Approach
Adoption assistance
Child care discount
Educational assistance
Matching gifts program
Employee Resource Connection
Auto and home insurance group discount program
International Fitness Club Network
BeyondWork Internet discount program
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Last edited by bhautik.kawa; July 19th, 2016 at 06:09 PM..
   
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Business Education
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Re: Employee Retention of McDonald's - June 4th, 2015

I don't love my employee? Then within you few days you will be an employee. This is true and it happens if you do not retain your employee. Employee are the one who build an organisation and when they are not satisfied then you organisation is totally nullified. Juist mark my word :I don't love my employee? Then within you few days you will be an employee
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