McDonald’s celebrated for innovation over hourly paid employees

Zero hours are standard practice in the restaurant industry, but McDonald’s is bucking the trend by offering its hourly paid employees a choice over whether they want to stay on a flexible contract or swap it for a guaranteed minimum hours contract, where they would retain all the terms and conditions that they had before.

The move is ground-breaking in the business and has won them this year’s Workingmums.co.uk Innovation in Flexible Working Award.

The business introduced guaranteed hours contracts [GHC’s] in November 2015 initially as a pilot in three restaurants in St Helen’s, Merseyside, for three months. The initiative was then expanded across the UK estate. Whilst McDonald’s says zero hours are something that work for McDonald’s employees because of the flexibility they offer, there were a growing number who wanted a choice. McDonald’s were keen to offer all their hourly paid employees the option of moving onto a contract that guaranteed them a minimum number of hours each week if they so wished.

“We listen to our employees. We want to support them and to make sure we got the process right for our employees so we took the decision to have a slow deployment process,” says Ruth Walsh, HR Manager. By the end of 2017, guaranteed hours contracts will have been rolled out across the whole of the UK estate, in both company-owned and franchised restaurants – affecting some 122,000 hourly paid employees.

Uptake of Guaranteed Hours Contracts

The uptake of guaranteed hours contracts has been around 10% across the country, but can depend very much on the area.  In restaurants with a high number of students, for example, the uptake can be as low as 5%. Ruth says many of its employees like the flexibility of zero hours as parents can take time off in the school holidays and students can take time out for exams. What the GHCs give is “an element of choice”.

GHCs currently guarantee four, 16 or 30 hours with breaks factored in. For instance, someone on a 30-hour contract will be scheduled 33-34 hours to incorporate breaks. Employees can top these hours up if they wish and contracts are offered in line with normal working hours. The 30-hour contract enjoys the most take-up as the main interest in GHCs is from full-time employees and managers.

There is no eligibility criteria: GHCs are available to all hourly paid employees. For existing crew, McDonald’s aims to match the GHCs with the hours usually worked by the employee and employees can change back to a flexible contract at any time if guaranteed hours don’t work out for them.

The last employee satisfaction survey results were released in November 2017 and satisfaction rates for employees who had taken up a Guaranteed Hours Contract were up by 6% on average. The next step in the deployment stage is for the GHCs to be offered as an option at the recruitment stage.

There has also been interest from others in the same sector and in retail and the initiative was highlighted in the Taylor Review of Modern Working Practices. Ruth Walsh says there is a strong business case to back it up – being flexible and offering choice means it can attract and retain the best staff.

The business case

McDonald’s submission to the Workingmums.co.uk’s Top Employer Awards states: “Offering this flexibility has a huge impact on the business, enabling our employees to work in the way they want when they want, helping us to retain our most talented employees, leading to improved business efficiency and productivity. Offering guaranteed hours contracts is a proactive move for us, our main motivation being to give our employees choice, giving them the flexibility that enables them to choose hours that suit their needs helping them to balance work with their lifestyle and commitments.”

McDonald’s has long been known for its flexible working, for instance, it offers a friends and family contract which allows employees working in the same restaurant (from the same family or who are friends) to share and cover each other’s shifts, with no prior notice required, to best suit their personal arrangements.

Zero hours contracts have come in for criticism in the last few years with concerns about employment rights and exploitation rife. McDonald’s says all its hourly paid employees are on permanent contracts and receive the same benefits such as sick pay and holiday pay as those on fixed hours. It does not use exclusivity clauses or ask people to be on call. 

Ruth says McDonald’s ensures the flexibility it offers works by employing enough staff to accommodate it. She adds that this flexibility also means that the gender balance at shift manager level is fairly evenly balanced. “Flexibility is at the core of what we do,” she says.

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