• Announcing Our $10M Series A Funding Click here to learn more.

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Announcing Our $10M Series A Funding

Sprockets Receives $10M to Make Hiring Process More Equitable for Employers and Job Seekers

Sprockets Receives $10M to Make Hiring Process More Equitable for Employers and Job Seekers 1016 425.31 Sprockets

Today, we officially closed our Series A funding at $10mm with participation from Forte Ventures, Healthy Ventures, Thayer Ventures, Lytical Ventures, Blu Ventures, and VentureSouth. The investment will help Sprockets further help business owners hire and retain the very best hourly employees, even during a labor crisis. 

Sprockets CEO and founder AJ Richichi said, “We are building a better way to hire. This capital will help us bring an equitable and efficient hiring process to millions of companies and job seekers nationwide.”

Our hiring platform reveals which applicants are right for your needs, empowering you to build a strong, cohesive staff that will stay long-term. Trusted by some of the world’s biggest brands, it’s proven to boost 90-day employee retention by an average of 43%.

 

 

What Does This Mean for You? 

Sprockets understands the frustrations you are currently facing at your business are so much more than not knowing how to staff during unprecedented times.

“Many feel handcuffed by government stimulus payments, COVID-19 shutdowns, inflation, and generational changes to candidate behavior,” Richichi explained. “Companies that deploy our software are statistically faster, less discriminatory, and less prone to error.”  

This round will allow Sprockets to undergo dramatic growth and expansion in order to lessen your hiring headaches and ensure an easy, seamless use of our hiring platform. 

Our Growth and Accomplishments

The funding comes a few months after we achieved 10x growth at the peak of the labor crisis.  

Sprockets helped thousands of customers and hundreds of thousands of candidates in the QSR and hospitality industries in 2021. We are so proud of what we have accomplished but know there is much more work to be done. 

“We sincerely appreciate the overwhelming support from customers, partners, investors, and team members,” Richichi said, expressing his gratitude.

Our company is also lucky to have investors who share our passion for fixing a broken hiring process. Tom Hawkins, founder and managing partner of Forte Ventures, states, “The Sprockets technology solution is invaluable to hiring managers in QSR, hospitality, and multiple other industries with hourly workers. Imagine the change that Sprockets will have on worker satisfaction and career stability within a segment of the population that has historically been ignored by most of the HR tech players. We’re excited to have led Sprockets’ Series A financing and look forward to supporting the management team moving forward.” 

Other investors who participated in our Series A round can attest to Sprockets’ success, particularly in the face of a labor crisis. “Businesses need easier and faster ways of making good hires,” Anya Schiess, co-founder and general partner at Healthy Ventures said. “Sprockets solves this problem with candidate-focused automation.

Richichi, along with the rest of the Sprockets team, is grateful for this rare opportunity. “We are challenging a hiring process that’s been static for hundreds of years, and being rewarded with great traction,” he said. “We’ve been fortunate enough to sign the world’s biggest brands, integrate with industry leading technologies, and build a world-class team.”

Hiring Success Story: 95% Employee Retention in 90 Days

We recently helped a 50+ location Bojangles group achieve 95% employee retention in just 90 days. With the help of Sprockets’ Applicant Matching System, the franchise was able to achieve an ROI of 14x and uncover over $134,000 in savings. The employees they hired with Sprockets stayed longer than those who were hired without, proving the ability of our platform to accurately predict applicant success and increase employee retention. It’s possible for your business to achieve similar success. To learn more about how our AI-powered platform can help change the future of your own hiring, schedule a free, 15-minute demo here.

 

A business conference and text reading, "Sprockets Joins the National Owners Association to Better Serve Customers and the Community"

Sprockets Joins the National Owners Association to Better Serve Customers and the Community

Sprockets Joins the National Owners Association to Better Serve Customers and the Community 1016 528 Sprockets

Restaurants have struggled with costly employee turnover for years, and staffing challenges have only gotten worse with the recent labor crisis. So, we decided to double down on our efforts to meet the needs of businesses. In addition to continuously upgrading our hiring platform, we’ve become a member and supplier partner of the National Owners Association (NOA). This is a major step on our mission to create a more equitable, efficient hiring process that improves the experience for employers and applicants alike.

What Is the National Owners Association?

NOA is a group of restaurant owners and suppliers that collaborate on issues such as finances and franchising to improve the system for all parties involved. That includes the owners, their employees, and their customers. Guided by their core values of integrity, honesty, transparency, and respect, members are able to share expertise as well as find guidance and inspiration from each other. We’re proud to be part of this organization and celebrated our new membership with a charitable donation of $2,000 to the Ronald McDonald House, on behalf of NOA, to help families in need.

What This Means for You

We strive to get better every day for the sake of our customers, and joining NOA is part of that ongoing process. Our membership allows us to attend meetings, view industry insights, and communicate with foodservice professionals to better understand the challenges they’re facing and solve them even more effectively. Look for us at the NOA Annual Meeting — we’d love to meet and show you how Sprockets can boost your employee retention by 43%!

Stabilize Staffing Levels With the Sprockets Platform

Someone on a laptop screening high quality candidates

Of course, you don’t have to wait to see us at the NOA Annual Meeting to solve your staffing challenges with Sprockets. We’re more than happy to give you a free demo of our hiring platform. In only 15 minutes, you’ll discover how Sprockets empowers you to make the best hiring decisions every time by revealing which applicants will succeed like your top performers. It even integrates with popular HR tools, like McHire!

A picture of AJ Richichi and text reading, "Scribble Features Sprockets’ CEO as a Leader of Innovation"

Scribble Features Sprockets’ CEO as a Leader of Innovation

Scribble Features Sprockets’ CEO as a Leader of Innovation 1016 528 Sprockets

How does a dorm-room project evolve into a rapidly growing tech startup that’s changing the way people think about hiring? The team behind Scribble, a project launched by the South Carolina Department of Commerce, sat down with AJ Richichi to find out. Check out the interview below to discover the story behind Sprockets and its innovative solution. You’ll meet our CEO and hear his thoughts on the current state of hiring, artificial intelligence, entrepreneurship, and more.

AJ Richichi: Creating a More Effective, Equitable Hiring Process Through Artificial Intelligence

How Hiring Is Flawed

Change isn’t easy, especially when it comes to changing a process that businesses have trusted for years, but it’s necessary if we want to fix a broken system. The traditional hiring process is biased, time-consuming, and ineffective. Plus, companies are struggling to maintain staffing levels and lose thousands of dollars each year due to high employee turnover. AJ Richichi helps people solve all of these issues using the Sprockets platform.

As Richichi mentions in the interview, “White-sounding names get 50% more callbacks than non-white-sounding names. The average general manager will ask between seven and nine illegal interview questions every single phone call. We want to give everyone a fair shake, regardless of where they’re from, where they went to college, and what they look like, to get employment.”

Richichi’s Innovative Solution

Sprockets users don’t need to worry about staffing issues, wasted interview time, or potential bias. Our AI-powered platform reveals which applicants will succeed like a location’s top performers using a three-question survey and a simple scoring system. It empowers business owners and operators to hire the best workers every time without even looking at a resume. Plus, it’s proven to boost employee retention and reduce the amount of time spent on the hiring process so people can focus on daily operations.

Eliminate Bias, Save Time, and Reduce Employee Turnover

The Sprockets platformA lot has changed since Richichi’s days in the dorm room, but one thing remains the same: his passion for matching people to possibilities. Sprockets is now a trusted hiring solution for top brands like Domino’s and Taco Bell. Plus, it integrates seamlessly with other popular HR tools, such as McHire and TalentReef.

“We have been empowered to more quickly focus on the candidates that closely match our hiring profile, generating a higher success rate of new hires in our system and eliminating wasted interview time. We feel great about our progress, and the impact was nearly immediate.”

– Bob Fenzel, VP of Wingstop

Schedule a free demo today to predict applicant success with Sprockets, ultimately reducing costly employee turnover!

A fast food cashier with text reading, "McHire, Powered by Paradox, Integrates With Sprockets to Improve Employee Retention"

McHire, Powered by Paradox, Integrates With Sprockets to Improve Employee Retention

McHire, Powered by Paradox, Integrates With Sprockets to Improve Employee Retention 1016 528 Sprockets

Reducing costly turnover at McDonald’s franchise locations is easier than ever with the release of an integration between McHire, powered by Paradox, and Sprockets. Our AI-powered solution now works directly with McHire, helping you source applicants quickly and reveal who will perform like your best crew members.

McDonald’s franchise operators see a 43% improvement in 90-day retention, on average, with Sprockets. It’s time for you to enjoy the same success!

Why You Should Add Sprockets to Paradox’s McHire Platform

This integration empowers you to hire the ideal applicants every time, ultimately improving retention and reducing the costs associated with crew turnover. McHire is a recruiting application developed for McDonald’s by Paradox, and Sprockets instantly predicts their likelihood to succeed and stay long-term. You’ll know everything you need to know about applicants before interviews and even see which ones are worth interviewing in the first place.

What Other McDonald’s Franchise Operators Have Experienced

Numerous McDonald’s franchise owners are already enjoying the benefits of using Sprockets with Paradox’s McHire platform. In a recent case study, we found that Sprockets improves 90-day retention by 43% and annual turnover by 22%. This integration also means GMs can focus on all of the important day-to-day decisions they need to make by saving an average of 37% time on sourcing, screening, hiring, and training crew members. Here’s what one Sprockets user had to say:

“It is simple to implement and easy for my hiring managers and GMs to look at the surveys… If you’re on the fence, just the price should push you over because if it saves you one bad hire per year, you’re up money. That’s a no-brainer.

– Curtis Wilhelmi

McDonald’s Franchise Operator

How to Install the Sprockets Integration

Visit our integration page now to add the precision of Sprockets to McHire! The Sprockets team will get the gears turning and quickly set you up for success. You’ll be hiring the ideal crew members, improving retention, and reducing the costs of turnover before you know it!

For more information on McHire visit https://signup.mchire.com/

A man on a laptop with text reading "25 States Reducing Unemployment Benefits"

Which States Have Decided to Reduce Unemployment Benefits?

Which States Have Decided to Reduce Unemployment Benefits? 1016 528 Sprockets

The COVID-19 pandemic has created one of the worst economic downturns since the financial crisis of 2008, leading both federal and state governments to quickly bring relief to millions of Americans who suddenly lost their jobs. State leaders agreed on the need to increase the number of unemployment benefits being provided to their citizens during this time.

Now, states have begun to open up once again, prompting governors to propose dates when federal unemployment benefits should be reduced. The following includes a list of the states that are seeking — or have already approved — a plan to reduce unemployment benefits.

States Reducing Unemployment Benefits

It’s important to note that the official expiration date for the Federal Pandemic Unemployment Compensation (FPUC) is September 6, 2021. Although federal funds would still be available to states, many leaders have chosen to end the programs before September 6 in an effort to encourage people to get back to work. This means that benefits such as the extra $300 per week supplement will be removed.

June 12 | Alaska, Iowa, Mississippi, Missouri

June 12 is the earliest date set to terminate benefits. These reduced unemployment benefits will affect Americans in Alaska, Iowa, Mississippi, and Missouri. Dr. Tamika L. Ledbetter, Alaska’s Department of Labor and Workforce Development Commissioner, has stated that Alaska’s economy is open, and employers are ready and willing to bring people back to work. The same sentiment is shared among the other three states who have chosen June 12 to bring an end to COVID-19 unemployment benefits.

June 19 | Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia, Wyoming

Just a week later, the states of Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia, and Wyoming will end the COVID-19 unemployment benefits. Governor Kay Ivey of Alabama defends the move by saying that many business owners have come to her stating that they are having a difficult time finding people to hire. 

Opponents of this move point to small business owners and other self-employed Americans who would normally be denied unemployment during COVID-19 but are keeping themselves afloat due to the additional federal funds and removal of certain restrictions.

June 26 | Arkansas, Oklahoma, Utah, Florida, Georgia, Ohio, South Dakota, Texas

Spearheaded by Texas Governor Gregg Abbott, the states of Arkansas, Oklahoma, Utah, Florida, Georgia, Ohio, South Dakota, and Texas will effectively opt out of 2021 unemployment funds from the U.S. Department of Labor on June 26. Texas Governor Gregg Abbott stated that those on unemployment benefits are equal to the jobs available in Texas.

June 27 – July 10 | Montana, South Carolina, Tennessee, Maryland, Arizona

Some of the last states to reduce unemployment benefits include Montana on June 27, South Carolina on June 30, Tennessee and Maryland on July 3, and Arizona on July 10. Although these are some of the latest dates on the list, they are still a far cry from the September 6 deadline set by President Biden and Congress.

Business Owners Are Turning to Sprockets’ Staffing Solution

A man looking at job applicants on a tabletIt’s challenging to attract applicants, especially the ideal ones for open positions with the current labor crisis. Luckily, Sprockets offers an AI-powered solution with all of the tools necessary to quickly stabilize and maintain healthy staffing levels. 

The Sprockets platform features free posting to popular job boards ($400 value), personality assessments, virtual recruiters, and a sophisticated applicant matching system that reveals which applicants will perform like your best employees. It’s proven to be effective, improving 90-day retention by 43%, and it’s loved by business owners across several top brands. Curtis Wilhelmi of McDonald’s states, “It’s a no-brainer!”

A woman holding a paycheck with text reading "9 Companies Offering Hiring Bonuses to New Workers"

These Companies Are Currently Offering Hiring Bonuses

These Companies Are Currently Offering Hiring Bonuses 1016 528 Sprockets

The COVID-19 pandemic has resulted in many companies offering hiring bonuses to employees amidst the uncertain job market. The bonuses provide additional motivation to workers and set organizations apart from other businesses. Furthermore, hiring bonuses are a cost-effective method because they are a one-time cost, unlike salaries. The incentives can average around 20% of an employee’s annual salary, but the figure varies from company to company.

Some of you might wonder, “What is a hiring bonus, and how can I get one?” Let’s dive into the topic and show you a few of the businesses that have decided to offer sign-on bonuses to attract potential workers.

Here Are 9 Companies That Are Currently Offering Signing-Up Bonuses:

1. Amazon

It is the second-largest retailer after Walmart, employing approximately 1.2 million people. The pandemic led to a surge in online shopping, causing the company to hire more delivery and warehouse workers to keep up with the demand.

The current Amazon hiring bonuses are for new employees who pack and ship online orders. For example, some workers can get a $1,000 sign-on bonus and an additional $100 if they have received the COVID-19 vaccination. There are opportunities in several states, such as Kentucky, New Jersey, and Washington.

2. McDonald’s

One of the world’s most prominent fast-food service restaurants, serving approximately 69 million customers, is also offering hiring bonuses to new crew members. Since franchisees own many McDonald’s locations, the incentives can vary significantly. In some cases, workers can receive a $500 sign-on bonus as well as a $50 incentive just for showing up for an interview!

3. Chipotle

Chipotle has introduced several incentives to attract applicants during the COVID-19 pandemic. One recent development is a $200 employee referral bonus for crew members and an additional $750 for an apprentice or general manager position. The increase in bonuses and wages is due to Chipotle’s recent expansion plan, which seeks to fill 200 new locations with staff.

4. Christus Health

This non-profit organization with over 600 locations is offering opportunities for health workers in various specialties with sign-on bonuses of approximately $6,000 to $10,000. The incentives aim to increase their applicant pool during a time when health care workers are desperately needed in communities across the country and the world.

5. General Dynamics Information Technology

General Dynamics Information Technology offers opportunities for technicians and engineering specialists, and their new hiring bonus is approximately $10,000. They also offer an $8,000 bonus to current employees who refer a new employee. The jobs are widespread across various states in the country.

6. Bartlett Plumbing and Heating Company 

People can earn hiring bonuses for HVAC work, as well! Bartlett Plumbing and Heating Company has full-time openings for employees in Michigan with sign-on bonuses of $1,000 that are paid after 90 days of employment.

7. Expanding Horizons

Expanding Horizons is an adult foster care group that offers rehabilitation services to patients with mental illnesses and brain injuries. The company has several open roles with bonuses of $500 after working for three months and a 2% wage increase after six months.

8. Hilton Hotels

If you’re looking for a sign-on bonus in the hospitality industry, then you’re in luck. The Hilton group of hotels and resorts currently offers hiring incentives for various full and part-time positions, including front desk agents, housekeepers, overnight cleaners, and room attendants. Many of the positions offer hiring bonuses of between $300 to $1,500!

9. Continuum Behavioral Health

This organization provides services to people with learning and behavioral disabilities. It has an immediate need for board-certified behavior analysts, providing $5,000 signing bonuses to fill positions in various locations across the country. There are both full-time and part-time job openings in these areas. Continuum Behavioral health also offers competitive salaries and remuneration packages, offering flexible working schedules.

An Additional Solution for Employers During the Labor Crisis

SprocketsAre you a business owner or manager considering the possibility of offering hiring bonuses to attract new employees? It can be an attractive option for both you and job seekers, but it only provides part of the solution to the current labor crisis.

It’s crucial to not only attract applicants, but also make sure that they are the ideal fit for your business. Otherwise, you risk costly employee turnover and having to go through the hiring process all over again. That’s where Sprockets comes in. Our AI-powered platform has all the tools you need to increase applicant flow, screen candidates, and help you hire more employees like your top performers. We even offer free posting to top job boards and “Virtual Recruiters” who handle most of the work for you. It’s not magic — it’s logic.

Schedule a demo now to discover how Sprockets can solve your staffing problems and improve overall employee retention!

Someone holding money and text reading "Which States Are Offering Back-to-Work Incentives?"

Which States Are Offering Back-to-Work Incentives?

Which States Are Offering Back-to-Work Incentives? 1016 528 Sprockets

As a labor crisis looms in the US with a perceived shortage of workers, several states have opted to reduce unemployment benefits and offer back-to-work incentives instead. This movement is intended to lower the country’s unemployment rate and help struggling businesses maintain healthy staffing levels, although some economists disagree on its potential effectiveness. Find out which states have implemented — or plan to implement — these return-to-work incentives.

States Offering Back-to-Work Bonuses

1. Arizona

On May 13, Arizona proclaimed that it would no longer be partaking in the Federal Pandemic Unemployment Compensation (FPUC) initiative. Instead, they plan on using federal funds to provide their residents with a return-to-work incentive. If residents return to full-time work, they can receive a bonus of $2,000. If you cannot return full-time but instead could work part-time, then you could still expect a bonus, but it would only be $1,000.

The only conditions that are required to receive this incentive are that you must already be receiving unemployment aid, you cannot be paid more than $25 per hour at the new position, and individuals must complete at least 10 weeks of work with the new employer.

2. Colorado

Colorado has seen a decrease in new filers for their state unemployment benefits, but they are offering a return-to-work bonus to continue this trend. This will come as a $1,600 incentive for those who received at least $25 in weekly federal aid between March 28 and May 16. The money will be offered to people who work full-time by May 29 and remain employed with the same employer for at least eight weeks. If you were unable to return to work during that time but were still receiving benefits, residents could still receive up to $1,200. This is called the Colorado Jumpstart Incentive, and it is predicted to total at $500,000 by the end of its use.

3. Connecticut

Having created the Back to Work CT program, Connecticut will provide a $1,000 one-time payment to its 10,000 long-term unemployed residents. It has been designed to encourage those who have been out of work for a lengthy period of time to find work and return to the way things were before the pandemic started.

To be eligible, workers must have filed for unemployment with the state prior to May 30, must find and keep a full-time job for eight consecutive weeks, and not receive unemployment benefits while they are employed. As long as they follow these guidelines, there could be a lucrative payout coming to many residents.

4. Montana

This state was one of the first to stop participating in the FPUC program. Leaders chose to offer a return-to-work bonus of $1,200 to those who rejoin the workforce. The state has pledged $15 million to this program, but it is on a first-come, first-served basis. This initiative is meant to help up to 12,500 workers within Montana, even though their recorded unemployment rate is less than that. The main reason for this is because there has also been an influx of people moving into the state and seeking to start over after the devastating impact of the global pandemic. They wish to make sure that those who are coming in will also have a chance at this great incentive, but it is only available until the end of October.

5. New Hampshire

Trying to faze out their participation in the unemployment benefits offered by the federal government by mid-June, New Hampshire leaders are offering back-to-work benefits in the form of a bonus. With $10 million pledged to this, they will offer a one-time payout of $1,000 for those who are able to maintain full-time employment for eight consecutive weeks. For part-time employees, they will be offered a smaller amount for doing the same. Part-time employees will see $500 added to their accounts to help them as well.

To be eligible, workers must make less than $25 per hour and meet the attendance requirements. This should help to get employees back into positions as the state starts to reopen and even encourage people to move in and take advantage of this program.

6. Oklahoma

Similar to other states, Oklahoma has announced its intent to withdraw from the Federal Pandemic Unemployment Compensation program by the end of June and instead replace its bonus with one of its own. The first 20,000 residents to return to work would receive a $1,200 one-time bonus payment. This money will be paid by the American Rescue Plan program instead of by the state government. Only those who have received unemployment benefits between May 2 and May 15 and who complete six consecutive weeks with a single employer will find themselves receiving the incentive, which will go out in mid-July.

Additional States Considering Return-to-Work Incentives

These six states listed above might soon be followed by others with leaders who’d like to reduce weekly unemployment benefits and offer back-to-work bonuses. The list includes West Virginia as well as North Carolina.

What These Bonuses Mean for Employers

Someone on a laptop screening high quality candidatesIf you’re a business owner in one of these states, you might begin to see an increase in the number of potential hires searching for employment. However, how do you attract these job seekers, particularly the ideal applicants for your team?

The answer is simple: Sprockets. Our AI-powered platform takes what makes your top-performing employees great and finds shared characteristics with incoming applicants. Sprockets even offers free posting to popular job boards as well as “Virtual Recruiters” who alert you when they find stellar candidates, allowing you and your managers to focus more on daily operations rather than the hiring process.

Schedule a demo today to see how Sprockets can augment sourcing efforts, identify the ideal applicants, and improve your employee retention!

A woman showing a laptop screen of the Sprockets hiring platform

SENTIO Becomes “Sprockets” as We Set Our Sights Even Higher for 2021

SENTIO Becomes “Sprockets” as We Set Our Sights Even Higher for 2021 1016 528 Sprockets

Big things are happening here at Sprockets! We recently received a $3.4mm venture raise after all of our success in 2020. This investment puts us in an even better position to serve customers in the new year with feature expansions and integrations with other major hiring tools that you utilize. During this time, we’re transforming ourselves to convey our mission more effectively: to harmoniously unite the right people with the right possibilities.

Whether you’re an applicant or employer, you can rest assured that Sprockets has what you need. We’re defining the future of the hourly workforce with our Applicant Matching System.

New Name, Same Mission

While our name has changed, our commitment to you has not. People need to get back to work, especially after such a turbulent year, and you need to find the best of the best for your business to achieve success in 2021. Our data-driven platform is still the go-to solution for matching the right people to the right possibilities with pinpoint accuracy. When you succeed, we succeed!

Change isn’t always easy, but this one is. We want to assure our current customers that this doesn’t affect how you interact with our hiring platform. You don’t need to do anything differently besides enjoy the new and improved look of our company. Use our platform, as usual, to continue finding the right candidates for your team. Of course, feel free to contact us with any questions or concerns you might have. We’re always here to help, especially during transition. 

The Story Behind “Sprockets”

Have you ever really watched a relay race? It’s a thing of beauty to see a group of athletes working together, seamlessly handing off to one another with perfect choreography, moving forward in tandem toward the same goal. Like a relay athlete or a sprocket in a machine, the right employee joins colleagues to drive an organization forward in efficiency and harmony.

Simply put, “Sprockets” represents our mission more clearly. “Sentio” means “to understand,” but we go far beyond understanding workplaces and candidates. We determine if candidates will fit — and work harmoniously — with other coworkers, thrive in their unique environments, and stay long-term.

Exciting News and Plans for the Future

We’ve always been a forward-thinking company, and that remains the same as well. The updates to our name and appearance offer a taste of what’s to come as we shape the future of hiring. You can look forward to many more improvements and enhancements to your experience with our platform, especially since Sprockets recently acquired a $3.4 million raise from venture-capitalist investors. We’d like to thank the following companies for their contributions and confidence:

It’s rare for any South-Carolina startup to receive investments from outside the Southeast, which is why it’s truly remarkable how a company such as ours was able to attract world-class funding during a global pandemic. This invigorating news has us excited for the future as we look to make 2021 the best year yet for Sprockets and all of our loyal customers!

Sprockets: It’s Not Magic — It’s Logic

If you don’t currently use our platform and are interested in enjoying the success that so many satisfied customers have achieved, we’d love to help. Take a moment to book a meeting with one of our team members to learn more about how Sprockets’ sophisticated solution to hiring can reduce employee turnover, saving you time and money. It might be the best decision you make for your business!

Impact of COVID-19 on the QSR Industry

Impact of COVID-19 on the QSR Industry 150 150 Sprockets

COVID-19 has had a tremendous impact on the quick-service market, posing new challenges for both operators and hiring managers. We are truly in uncharted territory as our industry manages the changing landscape. Here’s an early take on the good, the bad, and the ugly. 

 

The good…

 

QSR’s thrive during economic hardship

During the last economic recession, the general public turned to more convenient and cost-effective food rather than fast-casual and fine dining. 

After the housing crash in 2008, as an example, Subway added 6,000 locations to keep up with demand (Forbes), McDonald’s grew revenue by 4.5%, and Yum Brands outperformed the S&P 500 (Yahoo Finance). 

Restaurant Brands International’s CEO Jose Cil recently shared in their earnings report: “we’re encouraged by early signs of improvement in sales trends across many of our major markets”. 

 

Many QSR brands are growing during COVID-19

For the third consecutive week, restaurant chains witnessed year-over-year same-store sales improvement versus the previous period (Black box Intelligence). Papa John’s had its strongest month ever while adding 1,000,000 people to their loyalty program (QSR). Domino’s and Pizza Hut added nearly 40,000 employees to manage the overflow of delivery orders (Business Insiders). Popeye’s Chicken increased sales by 30% in Q1 (RBI Earnings Report). 

McDonald’s CEO Chris Kempczinski shared his belief that during uncertain and frightening times, people will turn to the “familiar”. “Our overall view is as markets start to open up this desire to really return to familiar favorites, to brands that are known is very, very powerful. And I think the fact that we also have a strong orientation toward convenience and value that I think are also two key elements.”

 

Less competition

This is a hard, sobering fact for the restaurant space. As the world re-opens, there will be fewer and limited independent restaurants. Most independents were forced to shut their doors, lay off their staff, and halt operations without the support from a franchisor. In fact, a recent survey conducted by the James Beard Foundation found that 80% of independents weren’t sure their restaurant would survive this crisis. For those who survive, about 60% describe their revenues as “severely depressed” (National Bureau of Economic Research). 

 

The bad…

 

Hiring just got very complicated

Since President Trump declared a national emergency, nearly 30 million people have filed for unemployment. The huge influx of unemployment has overwhelmed the government, resulting in delays and shortages of unemployment benefits. As of April 15th, nearly half of the workforce has not received their unemployment benefits (NPR). Recently displaced workers are, therefore, more motivated to get back to work with the uncertainty of their next check. 

As other industries shutter, you should expect far more applicant flow. What may seem like a blessing, however, could lead to more time spent in the hiring process. It will be overwhelming for your hiring managers to sift through the hundreds, and even thousands, of resumes to find the right applicants. Do you feel confident that your team will pick the right people? 

 

Employee turnover is increasing for new reasons

Employee turnover has been increasing year-over-year in the QSR industry. COVID-19 will accelerate that further. Here are a few obstacles our users are facing are they strive to retain your team. 

  • Childcare responsibilities
    • 22% of grandparents provide childcare at no cost, but COVID has slashed this number significantly (Vox)
    • The average cost for two young children outside school in more than $20,000 annually (Center for American Progress)
    • As childcare centers and schools reopen, teachers are refusing to go back to work further delaying the predicament. In Seattle, teachers have created a union-esque fight against returning to work (Seattle Education Association). 
  • Employees make more off unemployment
    • The average caregiver makes $22,470 per year, or $1,800 per month before taxes (Glassdoor). 
    • Based on the state, unemployed workers receive between $300 and $500 per week. Unemployed workers in 29 states are currently getting an extra $600 per week (USA Today). That could result in upwards of $4,400 of potential monthly income plus the $1200 per person and $500 per child (IRS). We are starting to hear that caregivers are opting to file for unemployment and quitting their jobs. 
  • Employees are getting sick or are afraid of getting sick
    • As of May 8, nearly 1.3 people have been diagnosed with COVID-19. That number is expected to increase. 
    • The Occupational Safety and Health Act grants workers the right to refuse to work if they believe workplace conditions could cause them serious imminent harm (Time Magazine). 
    • The National Labor Relations Act (NLRA) states that workers do not need to go to work if they feel unsafe for “health and safety reasons (Time Magazine)”. 

 

The Ugly…

 
QSR’s will struggle to hire the right people because of their current technology.

We started 2020 with historic low unemployment rates. Many hiring software solutions are therefore built to solve the “labor shortage” problem and neglect proper screening features. As your team must get more selective and efficient, one-click applications and QSR social networks are no longer the only software you need. It is important that you have a screening tool to help automate the influx of new candidates from 15%+ unemployment. 

 

Turnover will get very, very expensive.

With an uncertain economic future, one way to control costs is to reduce your turnover. According to the Society of Human Resource Management, it costs $4,969 to hire, train, and replace an hourly worker. With a staff of 50, you’ll need to hire roughly 66 people (or 5.5 per month). That’s if you maintain the industry average turnover rate of 132%. So, hiring 66 people for $4,969 equals $327,954 in turnover costs. This includes, but is not limited to, resources to interview, train, and onboard. 

 


 

At Sprockets, we are striving to learn from our customers daily. We currently help operators in brands like McDonald’s, Taco Bell, and Chick-fil-A with hiring the right people and reducing turnover. If you have any questions or comments, please do not hesitate to reach out to us. We would love to hear from you. 

 

Staffing Roundup Part 2: Insights from Sprockets’ Home Health Providers

Staffing Roundup Part 2: Insights from Sprockets’ Home Health Providers Sprockets

COVID-19 has had a tremendous impact on the home healthcare market, posing new challenges for both operators and hiring managers. We are truly in uncharted territory as our industry manages the changing landscape. 

The good news is there are signs of increased business as patients shift from assisted living to home health. The bad news is that owners and hiring managers are busier than ever before. 

Our hope is that this article will provide some insight into the various challenges facing home healthcare based on what we are hearing from our clients. 

 

An increase in caregiver applicants is straining the hiring process

Since President Trump declared a national emergency, 22 million people have filed for unemployment. The huge influx of unemployment has overwhelmed the government, resulting in delays and shortages of unemployment benefits. 

As of April 15, nearly half of the workforce has not received their unemployment benefits (NPR). Recently displaced workers are, therefore, more motivated to get back to work with the uncertainty of their next check. 

What we’ve heard from our clients:
  • “We are anxious to move forward with implementing Sprockets, as we have had an increase in applications due to the fact that we are still hiring when so many are now unemployed.” 
  • “We are seeing a HUGE influx of caregiver applicants. It’s hard to even manage.” 

 

Home-health patient loads are growing, increasing demand on caregiver staffing

Home Healthcare Aide is now the third fastest-growing occupation in the U.S., according to the Bureau of Labor Statistics. This statistic is the result of home-health locations seeing patients in need of less intensive care shifting from hospitals and assisted living facilities to isolation friendly home healthcare. The prevailing thought is this trend will remain in place through 2021 as a societal shift occurs in caregivers.

Below are a collection of hot takes from various industry leaders:
  • Kevin Colman, president of Home Healthcare Solutions: “I’m preparing for each day to probably get busier,” he said, predicting home-based care providers to see business peak in the next few weeks. “We are anticipating … patients being discharged [from hospitals quicker] and coming back to their homes or their communities, which [means] a whole separate set of risks.” (Home healthcare news)
  • Jennifer Sheets, CEO of Interim Healthcare: “We’re preparing for a surge of patients coming out of the hospital, and we’re already taking care of COVID-19 patients now. Certainly, I think that’s going to increase pretty quickly as we get further down the curve of COVID-19 exposure.” (Home healthcare news)
  • Greg Davis, the Owner of Patriot, said his business has surged as patients who need less intensive forms of care are discharged by hospitals trying to free up beds for anticipated COVID-19 cases. (Washington Post)

 

Employee turnover is increasing for new reasons

Employee turnover has been increasing year-over-year in the home health industry due in large part to the U.S. is in a good economy with a tight labor market. While the economic shift caused by COVID-19 has minimized turnover due to a tight labor market and reduced sourcing issues, it has created some unique challenges.

The following evidence points to new turnover risks owners must mitigate:

 

  • Childcare responsibilities
    • 22% of grandparents provide childcare at no cost, but COVID-19 has slashed this number significantly (Vox).
    • The average cost for two young children outside school is more than $20,000 annually (Center for American Progress).
    • As childcare centers and schools reopen, teachers are refusing to go back to work further delaying the predicament. In Seattle, teachers have created a union-esque fight against returning to work (Seattle Education Association).
  • Caregivers make more off unemployment
    • The average caregiver makes $22,470 per year, or $1,800 per month before taxes (Glassdoor). 
    • Based on the state, unemployed workers receive between $300 and $500 per week. Unemployed workers in 29 states are currently getting an extra $600 per week (USA Today). That could result in upwards of $4,400 of potential monthly income plus the $1200 per person and $500 per child (IRS). We are starting to hear that caregivers are opting to file for unemployment and quitting their jobs. 
  • Caregivers are getting sick or are afraid of getting sick
    • “Eric Bloniarz of FirstLight Home Care, said some of his employees have begun staying home out of fear of the virus, putting added pressure on those, like Brownlee, who continue to work. To pick up the slack, he has started recruiting new aides from the growing ranks of workers laid off from struggling bars and restaurants over the past two weeks.” (Washington Post)