Tim Hortons Sees Labour Shortage Ease with Aid Drying Up
Tim Hortons anticipates a gradual easing of its labor challenges as pandemic assistance programs conclude, according to a recent quarterly update released by Restaurant Brands International Inc. (RBI), the parent company. RBI also operates Burger King and Popeyes Louisiana Kitchen. The company reported sales of $1.8 billion in the third quarter, marking a $254 million year-over-year increase, which successfully positioned Tim Hortons back on track with pre-pandemic sales levels.
The significant labor shortages impacting operations during the third quarter were a key factor in the company’s performance. Duncan Fulton, RBI’s chief corporate officer, noted that franchisees were frequently grappling with a lack of staff, often struggling to cover shifts due to employee absences or difficulties in securing new hires. Fulton explained that Tim Hortons locations were typically missing up to a third of their pre-pandemic workforce, and that franchisees were witnessing a constant need to scramble for coverage, frequently asking employees to step in on short notice. This situation is further complicated by the competitive landscape, as locations like Canadian Tire, Shell gas stations and local grocery stores—all vying for the same pool of available labor.
Approximately 30 full-time and part-time staff are generally required at each Tim Hortons location. The labor shortage is not isolated; Statistics Canada reported an all-time high of 89,100 vacant jobs in the food service and accommodation sector during the second quarter of 2023. This widespread shortage has forced numerous restaurants across Canada to reduce operating hours, decrease seating capacity, or temporarily close for a few days each week due to inadequate staffing.
Tim Hortons franchisees are employing a variety of strategies to attract and retain employees. While Fulton emphasized that the company is expecting an “influx” of workers as pandemic assistance programs conclude, he also highlighted the incentives currently in place. These include bonuses for employees who refer a friend, as well as rewards for those who remain employed for a specified period. Financial Post analysis reveals that many Tim Hortons owners are already offering wages exceeding the minimum, often by several dollars, due to the hyper-competitive labor market. This dynamic understandably drives expectations for improved wages, working conditions, and benefits.
However, these higher labor costs may ultimately translate to increased prices for consumers. Matthew Dunnigan, RBI’s chief financial officer, acknowledged this potential “elevated volatility” during a conference call, stating that the company will closely monitor and adjust prices to mitigate the impact. The strategic shift reflects a recognition of the current economic pressures.
Despite these challenges, RBI remains optimistic about the future. Fulton pointed to the prospect of a more favorable labor market as government aid programs end, anticipating a surge in available workers. He asserted that the increased competition for talent is likely to drive up wages and benefits, fostering a more stable and productive workforce. Ultimately, the company is banking on a shift in the labor dynamics, confident that a competitive landscape will lead to better outcomes for both employees and the business.
