Mac the life

01 January 2000
Mac the life

McDonald's has had a lot on its plate lately. But if accusations of being environmentally unfriendly and charging too much VAT on its burgers aren't enough to cope with, the fast-food giant has recently been caught in the GMB trade union's sights over pay.

Steve Pryle of the GMB's young members bureau says the company's hourly wage hike in January, from £3.25 to £3.50, is still too low. "Our last figures showed that McDonald's earns £2,500 profit from each employee, so it could well afford to pay a minimum of £4 an hour."

Despite this, the company has announced an ambitious recruitment drive. It is repeating last year's target of taking 5,000 staff on board to meet its expansion plans, and is pumping £85m into 100 new restaurants throughout the UK.

"While there is a customer need for us, that will continue," says head of human resources Lynn Meade.

But in an industry beleaguered by a poor image and recruitment problems, the puzzle is how the company attracts such a large number of highly motivated staff. Its wages certainly aren't significantly high, still falling below the predicted minimum wage of about £3.60.

Meade argues, however, that McDonald's hourly rates are competitive for the fast-food sector, topping those at Burger King, and are in tune with the calibreof staff it needs to attract and retain.Thus, in regions where competition is hot,rates are £3.75, rising to £4 in London, whereas at Burger King they are £3.39 rising to £3.43.

She also points out that before the pay increase the average rate was, in fact, £3.93. After the increase that figure is expected to top £4. "We also award performance-related pay increases twice yearly, which supplements the minimum rate," adds Meade.

perks of the job

More importantly, Meade believes the GMB has ignored the fact that the hourly rate is augmented by the benefits, conditions, training, career opportunities and flexible hours.

This package is pushed in recruitment drives. "We have to show that we offer good training and a good introduction to work. Most of our [recruitment] difficulties are where there is a lot of competition for staff," says Meade.

Staff are not sourced from any one area, although the company favours recruiting hourly paid people locally and maintains links with schools and colleges. Neither are there any specific entry requirements for those at trainee manager level, although 35% of the intake last year were undergraduates.

But it is McDonald's policy for giving incentives to staff that the company believes is its strength. Certainly, the fast-food giant is one of the UK's largest employers of young people, with about 70% of its 55,000 staff aged 16-20.

"Some 50% of our managers have come from hourly paid levels," says Meade, adding that 440 moved over last year and that expansion will open up further opportunities. "We offer good career opportunities. Someone in their late 20s can be running a business that turns over £1.5m to £2m a year and get a good all-round grounding in how to run that restaurant - marketing, ordering, buying and recruitment."

Training is high on the agenda. The company, which made a UK profit after tax of £61m in 1996, earmarks £12.5m a year for this purpose. Meade points out, however, that the real spend on training is difficult to quantify because a lot of it is done on the job.

This applies particularly to hourly paid staff, who work mainly in food preparation. As they progress, they are given experience of working with the public and move on to specialist tasks such as helping to train others or run birthday parties.

For young people who want short-term employment, Meade says this experience provides a good introduction to work. "People who have worked at McDonald's remember the importance of teamwork and acquire those transferable skills."

Managers also undergo practical training, but there is more emphasis throughout their careers on ploughing through work books. They also have to attend week-long courses and one-day seminars either at the company's management training centre in London or at its regional training centres.

Despite the formal training structure, Meade stresses that the company broadens its recruitment pool by accommodating personal needs. "We can offer people flexible employment that fits in with family responsibilities. This also suits people who are semi-retired, or students."

About 75% of hourly paid workers are part-time. She cites parents who stipulate that they cannot work during the school holidays. Meade denies that this level of flexibility causes logistical problems. Instead, she says, it works well, as school and college students tend to want to supplement their earnings in the holidays by working extra hours.

"It dovetails nicely. The managers know how to plan for it," she says. "That's something some employers have caught on to relatively recently, butwe have been doing this since we started."

The nature of the business lends itself to this versatility. Split shifts are rare but staff can choose to work anything from three hours to eight. Similarly, outlets tend to open between 7am and 11pm but those, for instance, at airport terminals trade 21 hours a day.

"We are open many hours a day, so it works well for people who want to start early or finish late," says Meade.

This flexibility makes it difficult to gauge staff turnover, however, as students come and go two or three times a year. Meade observes that, in general, turnover in the regions is lower. "Some people have been here for 20 years," she says.

Both managers and hourly paid staff get benefits on top of their salaries. Managers get the usual things such as a car, a pension scheme, private medical care and share options. These can apply even down to the level of restaurant manager, which Meade believes is unusual for most companies.

There are also benefits for hourly paid staff such as free meal allowances, free life assurance, private patients plan, scholarship programme, share purchase plan, profit-related pay scheme and service awards.

As far as the job of recruiting a further 5,000 full- and part-time staff this year goes, Meade is confident. She may be at the cutting edge of recruitment now, but she started out, like many, in the kitchens, and is convinced that although pay is a big factor in attracting and maintaining staff, it is not always a priority. "We feel it is one of our great strengths that we do train well and we do offer good career opportunities." n

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