News

How will Tim Hortons manage ongoing labour concerns and shortages? Shareholders want to know.

By Sarah Couturier-Tanoh and Anthony Schein

You pile into the car on a Saturday morning. Maybe you’re leaving for a summer weekend, getting started on a day full of errands, or taking your kids to soccer practice. On your way, you stop for coffee and breakfast at the local Tim Hortons drive-thru.

You anticipate the wait to be no longer than a few minutes, as a team of busy staff members take and fill your order, carefully tracked and timed on a computer screen.

This particular morning, the line is longer than usual, cars are inching forward, and behind the counter, the short-staffed team is trying their best to run through orders. The team is struggling to keep pace, and as the cars slow down, hourly sales slow, too.

Over the course of the pandemic, no workplace has been immune to the effects of “the great resignation.” We have all read the stories of restaurant owners picking up shifts as dishwashers, reducing their operating hours, or even offering wage increases and hiring bonuses as the result of the unusually tight labour market and worker mobility.

Across North America, workers have felt empowered to quit jobs that left them unsafe, undervalued or underappreciated.

Accommodation and food services are the sectors recording the largest increase of job openings, with an average turnover rate in the fast-food industry reaching 150% in the U.S.

High turnover is not only challenging for employees providing training and management, but also has an economic cost to companies as they suffer the loss of job-specific skills, disruption in production and incur additional costs from hiring and training new workers.

Since 2018, SHARE has engaged Restaurant Brands International–parent company of Tim Hortons, Burger King, and Popeyes–on the company’s “human capital management” strategy. Shareholders have twice made their view clear, with votes during 2019 and 2020, emphasizing workers as at the heart of the success of the company. Despite these votes and perspectives, the company has been falling short in providing investors with sufficient information about its workforce strategy.

In the midst of the Great Resignation, SHARE has filed a labour-aligned proposal, for a third time, which will be voted on at the company’s June 15, 2022 AGM.

The proposal, filed by SHARE on behalf of the Atkinson Foundation, calls on the company to report on:

  • their internal strategies, programs and incentives, and how these enable franchisees to adopt competitive employment standards, including wages and benefits;
  • the effectiveness of its current strategy through the disclosure of aggregated human capital performance indicators and information;
  • and a breakdown of human capital performance indicators by franchisees. The actual operators of RBI’s restaurants are almost entirely independent franchisees. These small business owners enter a licensing agreement to operate under one of the company’s brands. In exchange for various fees and a share of profits, operators are provided with shared marketing, recipes, training, and operating systems.

Human capital performance indicators include job accountability, employee commitment, employee creativity, employee professional knowledge and organizational tenure, among other indicators.

Human capital indicators have been proven to be an accurate measure when analyzing a company’s ability to build a rewarding and supportive workplace, something that is critical for retention and promotion.

In theory, an independent franchisee can set their own human resources and wage policies. In practice, most of an operator’s costs are fixed (including purchasing of everything from cleaning supplies to packaging and food from the parent company), meaning there is little flexibility for individual restaurants to set pricing on their own.

95 percent of the total workforce is employed in franchise operations. By refusing to provide basic human capital data on franchisees’ performance, management asks RBI shareholders to blindly trust its efforts.

Without sufficient transparency on its human capital performance, shareholders are unable to assess the challenges faced by management in addressing ongoing labour shortage issues.

Research indicates that frontline workers, and low-wage and lower-level employees are more likely to be looking to leave, at rates significantly higher than historical norms. RBI does not make wage data available to its shareholders, however, public resources indicate that Burger King cashiers earn an average of just $9 USD/ hour in Texas. This is in stark contrast to the $16/hr needed to be considered a living wage for a single adult in Texas, home to the largest concentration of the company’s restaurants in the U.S.

This report is critical to RBI’s labour rights, workforce accountability, and shareholder transparency.

For more information, view the full exempt solicitation filed by SHARE.

Avatar
Written By:

SHARE

Looking to interview a SHARE staff or board member for an upcoming article or report? Send us an email at [email protected] to get in touch.

More By This Author