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Papa John's is giving its pizza makers bonuses of up to $400, as restaurants cling onto staff in the labor shortage

FILE PHOTO: The Papa John's store in Westminster, Colorado, U.S. August 1, 2017.  REUTERS/Rick Wilking
The Papa John's store in Westminster
  • Papa John's is handing out bonuses of up to $400 to many of its employees.
  • Existing staff can get up to $400 in increments, and $50 for referring a new hire.
  • Staff at corporate-owned restaurants are eligible. It didn't say how it would decide exact bonus amounts.
  • See more stories on Insider's business page.

Papa John's is paying bonuses of up to $400 as the restaurant industry scrambles to retain workers amid a huge labor shortage.

About 14,000 staff at company-owned restaurants, and in its supply chain, can get up to $400 paid in increments over the next six months. Papa John's didn't say how it would decide how much each staff member gets.

It's also rolling out referral bonuses to recruit more staff. Staff can get $50 for each new hire they refer to the company - and new starters can get a $50 hiring bonus, it announced Thursday.

The bonuses apply to staff at the chain's nearly 600 company-owned restaurants, which represent nearly a fifth of its restaurants in North America, alongside its quality control centers (QCC). Across the corporate restaurants and QCCs, Papa John's employs about 14,000 people.

Read more: These 9 food tech startups are capitalizing on the labor crunch with tools that help franchisees hire or automate the restaurant workforce

The pizza chain said the staff benefits it introduced during the pandemic were now permanent. These include expanded health, wellness, paid time-off, and college-tuition benefits.

Papa John's said that its bonuses, alongside extra investment in full-time staff at its higher-volume company-owned restaurants, would cost it around $2.5 million by the end of 2021.

"The incredible hard work and commitment of our team members, which powered Papa John's tremendous performance and transformation over the past 18 months, is just as important to our sustained long-term growth," Rob Lynch, CEO of the pizza chain, said in a statement.

"Similar to programs being offered by our franchisees, these new bonuses for our team members in our corporate restaurants and quality control centers reflect the value we place on growing, retaining, and supporting our dedicated team."

The US is suffering from a severe shortage of workers, and restaurants have been especially hard hit, with a third of former hospitality workers saying in a Joblist poll that they won't return to the industry.

The US Chamber of Commerce has called the national labor shortage a "national economic emergency" and warned it could hold back the recovery from the pandemic.

Together with rising ingredients costs, the labor shortage is pushing menu prices up at some restaurants. Some are struggling to pay rent.

Fast-food chains are trying perks to attract new hires and to cling onto existing staff. One McDonald's restaurant said it would give iPhones to new hires while another handed out $50 to anyone who showed up for an interview. The company is also raising wages in its corporate-owned restaurants by an average of 10%.

The Federal Reserve said that the labor squeeze could last months - but Bank of America expects the job market to recover by early 2022.

Read the original article on Business Insider

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