When you bite into your next cheap Pizza Hut or KFC meal deal, consider the real cost to the workers who prepared it.
KFC/Pizza Hut workers currently earn slightly less ($0.42c) per hour than their counterparts working for other chains or the local kebab shop down the road. And they do not earn penalty rates for working overtime or on weekends.
But all this changes in September and December 2012 when current workplace agreements cease with KFC/Pizza Hut owner Yum Restaurants. After this time, KFC/Pizza Hut workers will work under the Fast Food Industry Award (FFIA) as ruled by the Full Bench of Fair Work Australia last year. Yum Restaurants is currently appealing against this ruling. If successful, employees will be back to earning a lower wage and will lose out on penalty rates.
According to the Daily Telegraph’s recent report on the case, under the FFIA:
· Shifts must be at least three hours long
· The FFIA pays $24.71 on a Sunday compared to $16.61 under the Pizza Hut award
· KFC/Pizza Hut Part timer who works 15 hours a week on Tuesday night and Saturday and Sunday is $62.61 a week worse off under the Pizza Hut award than under the Fast Food Award. Thos working under the 'Pizza Hut Award’ earn $256.50 and those working under the ‘Fast Food Award’ earn $319.11.
If Yum Restaurants are successful in their appeal it would be interesting to see if staff retention rates fall. According to the Daily Telegraph piece, workers aged under 19 make up 80% of the fast food workforce. With 369 KFC and 219 Pizza Hut stores in Australia, this statistic is sure to hold true for Yum Restaurants’ employees.
University and HSC students who cannot rely on Government study assistance need to work in addition to juggling lectures, assignments, friendships, family, sports, a social life and other commitments. These are the same people making your pizza and your fried chicken, and they are being paid less than anyone else in the industry to do so.
Given the age, one can only assume that Yum Restaurants take for granted high staff turnover. After all, these kids will be desperate enough to work for anything and if not, they'll just leave, and there's plenty more where they came from, right?
I have lost count of the amount of clients who commenced their career working for two years or more at one of the fast food outlets. If you think about it, staying where they are makes sense; for example, a degree lasts at least three years, and if a teenager aims to work right through the HSC, that's also a possible three years at the one outlet. Working up to a Supervisory level in the same workplace is also something many employees hope to achieve before they plan another career path. This opportunity develops management skills and is invaluable experience.
But they won’t stay if they know they can get a better deal somewhere else.
Employees regardless of age appreciate being valued and rewarded. Those aged under 19 also value stability, and whether they know it or not, a life/work balance. Young people give up weekends with their family just as much as adults.
Yum Restaurants and many KFC/Pizza Hut franchisee owners in the short term think of the next one or two annual reports and see only increased costs and decreased profits under the new award. Perhaps Yum Restaurants hasn't considered the real cost of high staff turnover.
As a small business owner, I know how challenging it can be to attract and retain the best people. I also know how much it “costs” to train new staff. It takes time away from core business and service can be affected for that period of time. A high turnover rate only exacerbates this problem and soon the product or service suffers to such a point where a business is not only losing staff but customers, then profits.
Not attracting the best staff also affects productivity. The most efficient staff won’t leave other chains (where they are paid more) just to work at KFC or Pizza Hut, nor will a bright and efficient 15 year old just entering employment want to work there. I also know my employees value reward and recognition and their productivity increases as a result. People aged under 19 also value all of these things too, just as much as companies value fast profits.
Yum Restaurants may earn a fast profit by not investing in their people, but it will ultimately be bad for business.