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Shake Shack tests four-day workweek for managers

CEO Randy Garutti says incentive needed to recruit, retain supervisors

Shake Shack, which has seen labor pressures with its rapid expansion, is testing a four-day workweek to help recruit and retain qualified store-level supervisors, the company CEO says.

The pilot program, which the New York-based brand announced last week at an investor conference, has been deployed the chain’s Las Vegas market, where it operates a handful of locations including a store on The Strip.“It has never been harder to find great people to lead great restaurants,” CEO Randy Garutti said during the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas, Nev.

Garutti said the company is trying new ways to retain and attract qualified restaurant-level leaders as it grows across the country.  

“If we can figure that out on scale, it could be a big opportunity,” Garutti said of the four-day work week. “We’re not promising it yet, but it is something we’re having fun trying and seeing how our leaders like it on a recruiting basis.”

Beyond Las Vegas, company spokeswoman Kristyn Clark told NRN in a follow up interview that the chain has been testing the four-day, 40-hour work weeks at restaurants in Los Angeles, Dallas, San Antonio and Detroit. The Las Vegas shacks have been testing for over a year, while the other markets have added the new schedule over the last 2 to 8 months.

“In these locations, our managers have shifted to 40 hours over four work days. They are paid the same and retain all the same benefits.. It’s still very early — we’re doing a lot of listening,” she said.

The test is part of the chain’s ethos “to invest in and take care of our teams. We’re always striving to innovate – in our food offerings, in our restaurant design, in our culture,” she added.

The test comes as Shake Shack manages rapid growth.

In the final quarter of 2018, it opened 20 restaurants. This year, it plans to open 36 to 40 domestic company restaurants and 16 to 18 licensed stores.  

When those stores open, they come with customer lines out the door. Garutti said the company could be opening up to 100 stores a year, as it is bullish on growth. But in a tight labor market, it is hard to find that many well-trained managers needed to maintain the company’s high standards of hospitality and service.For the fourth quarter ended Dec. 26, Shake Shack posted a net loss of $958,000, or 3 cents a share, compared with a $12.5 million loss, or 47 cents a share, from last year, same quarter. Last year’s loss was tied to one-time tax related expenses of $12.7 million. Total revenue for the quarter increased 29.3% to $124.3 million, compared to $96.1 million for the same quarter, last year.

Shake Shack has more than 200 restaurants systemwide.

Contact Nancy Luna at [email protected]

Follow her on Twitter @FastFoodMaven

Update: March 27, 2019 This article has been updated with additional markets where the model is being tested.

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