Chipotle Mexican Grill is living out a good, old-fashioned, American success story. The Mexican food chain has been able to successfully build and scale over the past several years, bringing an innovative approach to fast food, and even thrusting several well-established, name-brand restaurant chains to second-tier status. Simply put, Chipotle is changing the way we think about fast food.
News came down from Chipotle headquarters recently that the company would be making a monumental policy shift, expanding its benefits packages to all employees, not just salaried workers. Nation’s Restaurant News reports that that as of July 1, all Chipotle workers will become eligible for full tuition assistance for educational pursuits, sick pay, and even paid vacation time. The announcement was formally made by two Chipotle executives, recruitment strategy manager JD Cummings and brand creative lead William Espey, at the annual Summer Brand Camp event in Dallas.
“We just made an announcement internally that we are now going to be offering sick pay and paid vacation time for all employees at all levels of the company, including all entry-level employees,” Cummings said, per Nation’s Restaurant News. “And we’re going to be offering the full-tuition reimbursement that we offer salaried employees to all hourly employees.”
“It’s an incredible statement by our leadership about how much we want to invest in the best people we have and to keep them with us,” he added.
Chipotle’s policy changes reflect what is starting to become a trend in the food industry. Starbucks has already put some of the same policies in place, most notably free tuition for workers who hope to continue their educations, for example. Both Starbucks and Chipotle are taking a certain amount of risk by pushing a socially-conscious agenda, and they’re both doing it for a couple big reasons.
From a business perspective, by embracing this policy shift, Chipotle is hoping to capture certain advantages and cost savings to strengthen its bottom line. By giving employees paid days off, and even money to further their education, it makes it less likely that employees will get fed up with their job and leave after a short amount of time. That means less expense for Chipotle in recruiting and training new workers, and employees who feel respected and thus happier — leading to increased production and higher customer satisfaction.
Other companies, not just Starbucks, are starting to see the advantages of higher wages and more robust benefits packages for low-level employees as well. We’re seeing wage increases in the retail sector from companies like Wal-Mart, which, just a few years ago, is probably the last thing anyone would have expected to see.
The other big advantage Chipotle’s leadership is hoping to cultivate from this announcement is the emboldening of the company’s name as one of America’s most socially conscious companies. By becoming well-known in the business community for being a fair employer that provides a healthy, relatively inexpensive product, Chipotle is betting that consumers will choose to eat at its restaurants rather than, say, McDonald’s, which has been under the gun for decades about both its products and business practices.
Chipotle has already gone ahead with plans to address genetically modified foods on its menu, and now this step of publicly announcing plans to better the company’s relationship with its workers is bound to win over some customers. And Chipotle already has a good head start to begin with — the chain is gaining a lot of credit for throwing a stick in the proverbial spokes of the fast food industry, which is losing huge amounts of foot traffic to new fast casual restaurants.
That’s happening for a few reasons, but as chains like McDonald’s become more expensive without much improvement in terms of food quality, diners are obviously willing and able to spend their money elsewhere. If other chains can’t offer significantly lower prices, than what’s the point of going to them at all when you can get a higher-quality meal for around the same price?
Chipotle is clearly trying to swing its momentum even further by announcing these policy changes, even if it does end up hurting the company in the short-term, or cause its stock to fall. There are clear long-term advantages to what the company’s leaders have decided to do, and Chipotle isn’t afraid to give things a shot.
If it does prove to be a success, it could be one more way in which Chipotle rewrites the rules of quick-service restaurant operations.
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