Chipotle Shows that Minimum Wage is Irrelevant


Chipotle has cultivated a human resources strategy, which at its basis is intended to build from within. Rather than focus on recruiting talent for high paying jobs, the company focuses on entry-level positions, at entry-level pay scales, and developing employees over time. Most senior roles are filled with people who started off at the lowest levels. The result is empowerment. Employees are not only given a job, they are given a future.

The key to this type of model is showing employees the wide array of opportunities available to them. Rather than simply expecting that all employees will want to advance within the organization, the company breeds a culture focused on respect, sustainability, and growth. The model places a focus on retention. Most importantly, employees see their peers moving through the organization, providing direct evidence that opportunities for advancement exist.

Its ironic that by focusing on the lowest paid jobs, Chipotle is, in reality, making a strong argument for individual employee empowerment as opposed to government regulated wages. While some may argue that raising the minimum wage benefits restaurant employees like those at Chipotle, the company instead follows the logic that higher wages are indeed attainable, but based on performance and tenure. It goes a step further to develop a strong culture based around this idea of building its resources from within.

The Chipotle human resources model highlights key insights for any start-up. Employee retention is a big problem for most new ventures. Finding the right talent is an equally sizeable issue. While there is no easy way to identify the perfect talent for your venture, building a human resources program focused on sustainability will ensure that your program will pay dividends for years to come.

Another challenge faced by most start-ups is the cost related to hiring new employees. Often, there just isn’t enough money to pay employees anything more than minimum wage. The Chipotle model offers a strategy for how to reward employees even if competitive wages aren’t available. Most often start-ups dangle the carrot of stock option compensation in lieu of high wages, but Chipotle’s model may be a viable alternative. As an employee gains more knowledge and moves up within the company, gradual salary increases may benefit both the employee and the company itself.

The model also tackles the need for employees to become skilled at multi-tasking. At any start-up, its important for employees to multi-task. The Chipotle human resources model cultivates an environment focused on expanding an employee’s skill set. An employee who has grown up within an organization will be better able to multi-task as they have covered numerous skills during their time at the firm. Exposing employees to a wide array of activities has benefits beyond mere enhanced productivity. It also is instrumental in improving a workplace’s atmosphere by keeping the employees motivated and interested.

While you can argue that Chipotle is passed the start-up stage and no longer qualifies as a recently launched venture, its human resources philosophy has been part of its core culture since inception. The model it has created is something that a lot of new firms can emulate. Successful implementation will lower employee turnover and create a stronger corporate culture.

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