— As McDonald’s seeks to beef up its workforce, it’s also trying to upgrade its image as the poster child for low-wage jobs by redefining the term “McJob."
The company said Monday that it plans to sign up 50,000 new workers on a single day later this month — a hiring spree that would expand its workforce by more than 7 percent.
Like many fast-food chains, McDonald’s typically ramps up its payrolls every year to prepare for the busy summer months. This year, the fast-food giant decided to use its announcement as a platform for company managers to stress the career potential of a company and industry that has come to be associated with low-wage, dead-end employment.
In its press release, McDonald’s said it would use the nationwide recruitment drive to invite applicants to “learn that a McJob is one with career growth and endless possibilities."
“That's my story,” Jan Fields, McDonald's USA president, told CNBC. “I started 33 years ago working french fries. I'm now president of McDonald’s U.S. My story really isn't that unique."
More than half of McDonald's franchisees and 75 percent of restaurant managers started at entry-level jobs, according to the company.
The view of McDonald's as a low-wage employer was solidified in 2003, when Merriam Webster added the word “McJob” to its dictionary and defined it as a “a low-paying job that requires little skill and provides little opportunity for advancement."
At the time, the company’s management decried the publisher’s move as a “slap in the face” to millions of restaurant workers. Now the company is hoping to turn the term on its head by using its hiring spree as a chance to redefine what it means to work at the world’s largest fast-food chain.
To get the word out, McDonald's will be supplementing its recruitment drive with an ad campaign that describes the advantages of working under the golden arches — including flexible hours, medical benefits and opportunities for advancement.
"The (ads are) really highlighting the people at McDonald's and dispelling the myths that there isn't opportunity working here," Marlena Peleo-Lazar, global creative officer at McDonald's USA, told Ad Age. "We really wanted to highlight our crew."
McDonalds has good reason to try to dispel that myth. As the job market begins to show signs of improvement, the company’s existing workers may find it easier to land a better-paying jobs. Job turnover typically rise as economic conditions improve; turnover in the restaurant industry is already over 100 percent, meaning that workers last less than a year on average, according to Sara Senatore, a restaurant industry analyst at Bernstein research.
McDonald’s is a dominant player in an industry that is among the lowest-paying in the U.S. The median wage for workers in food preparation and serving is $8.89 a hour — a little more than half the $15.95 median hourly wage for all occupations, according to the Bureau of Labor Statistics. The median annual wage in the sector is is $20,800 — less than half the median annual salary of $43,400 for all occupations.
“McDonald’s has the disadvantage of being the biggest by far in the industry,” said Sanatore. “Even if what they do is in fact not only industry standard but even better, they’re still going to be held up as the poster child for what is a low-wage, low-skill industry “
The details of McDonald’s hiring announcement, may fall short of dispelling its low-wage image. In its press release, the company said it would spend $518 million in wages to hire those 50,000 workers, an average of $10,360 per worker.
Some of the new positions will be part-time. McDonald’s said it will be hiring at all levels – from front-line hourly workers to management. A McDonalds spokeswoman said hourly employees typically make more than minimum wage, often more than $8 per hour. The federal minimum wage is $7.25 an hour, although the minimum is higher in some states.
McDonald's has been hurt less by the economic slowdown than restaurant chains with higher-priced menus, analysts say. The company has also seen good response form a variety of new products and from an ongoing company-wide overhaul of its stores. In test markets, a new “reimaging” campaign has boosted sales between 6 top 7 percent, according to Jeffrey Bernstein at Barclays Capital.
“McDonald's has never done a re-imaging program of this magnitude in the U.S with both interiors and exteriors completely redesigned,” he said.
Worldwide, McDonalds sales grew by 3.9 percent in February, the available monthly results. But U.S. sales came in below analysts’ expectations, growing by 2.7 percent.
Like many businesses, the fast-food giant is also struggling to hold the line on its process as the cost of raw materials moves higher. Though food prices have increased, fast-food chains have had a tough time passing along those increased costs with higher menu prices. That’s likely to continue to keep a lid on wages.
“The thing that people forget is that if you want to spend $1 on food McDonald’s can’t have huge labor costs,” said Senatore. “So part of the strategy of keeping food prices low is that labor costs have to be kept low, too.”