Why Taco Bell’s Viral $100,000 Salary Test Isn’t Ridiculous

Taco Bell has announced that later this year it will begin testing a $100,000 salary for restaurant general managers at select locations. Like all splashy announcements related to the beloved Yum Brands Inc. chain, the news has instantly gone viral, prompting many on the internet to instantly declare: “I should quit my day job.”

However amid this sea of “Earn Más” memes is one undeniable truth: the unemployment rate continues to hold at 3.5%, the lowest it has been in 50 years. In other words: fast food chains are ponying up higher wages in order to attract workers as their talent demand is seemingly exceeding supply.

And with a goal to hire 100,000 new U.S. employees by 2022 to hit $15 billion in global system sales, Taco Bell’s investments against these economic headwinds and industry pay disparity make perfect sense.

In addition testing raising its manager salaries from $50,000 – $80,000 to $100,000, Taco Bell has also announced that it will be offering all of its employees 24 hours of paid sick time per year, as well as launching its “Makers” program for restaurant members seeking leadership experience. The company is also launching its Live Más Scholarship, which will award $6 million in 2020 to fans and team members.

While these announcements have taken the internet by storm this week, Taco Bell isn’t a newcomer to unique hiring tactics. In April 2019 ahead of the busy summer season, the company hosted 600 Hiring Parties which included conversations with managers and current members, free food, trivia and photo mementos of the experience.

While these hiring events sound more akin to a fun college hangout session than a traditional employment application, Taco Bell has operational logic for winning over applicants early with tchatchkes: every second of employee efficiency impact’s Taco Bell’s financials at a macro scale, and quality employees and strong training contribute.

For example in Q4 of 2018, Taco Bell generated an extra 4 million additional transactions thanks to a speed of service improvement of 3 seconds at lunch and 2 seconds at dinner. YUM! CEO David Gibbs explained, “Their focus on excellent execution is generation operating profit growth, while offering customers faster service and a better experience.”

While Taco Bell’s $100,000 test is enticing, it certainly isn’t the first chain to experiment with or offering high manager salaries. In-N-Out offers its managers an average salary of $160,000. For fair comparison, In-N-Out is a private company that may operate without board approval and operates mostly in California where both cost of living and wages tend to outpace the country. Regardless, In-N-Out employees largely recommend the working at the company so In-N-Out may be an interesting success benchmark for Taco Bell’s test.

Regardless of whether or not the chain rolls out this $100,000 salary raise to all managers, Taco Bell may have already made strides in the talent war: Despite popular studies suggesting that $70,000 is the salary ceiling that provides best day-to-day happiness, the six figure salary still remains a symbolic of American earning power success. And with this blitz of publicity and memes spreading across the internet, it’s hard to deny the halo that Taco Bell just generated itself.