Cheers and tears – that’s how thousands of Hard Rock employees reacted when they heard their salaries are about to get a lot higher.
As inflation mounts and fears of a recession linger, Hard Rock International and Seminole Gaming will spend more than $100 million to significantly increase wages for half of the US workforce, more than 10,000 employees.
The increases are significant, exceeding 60% in some cases, with starting wages between $18 and $21 per hour for employees in 95 different jobs, including cooks, housekeepers, public safety areas, call centers and front desk clerks. In Florida, where the company is headquartered, some team members could be paid $16,000 more than the state’s minimum wage, Hard Rock said.
Jim Allen, chairman of Hard Rock and CEO of Seminole Gaming, said he is confident the investment will help the company retain employees and avoid turnover, even if it will have a major impact on bottom line.
“We could have significantly reduced the total capital we are willing to spend on our employees, hypothetically, maybe increase $2 or $3 per hour instead of $6 or $7 [an hour]Allen told TBEN, “but I looked at it and said, ‘Let’s be the leader. Let’s lead the way.'”
Allen said he wanted to show his appreciation, and he’s betting there will be a significant return on investment, with colleagues performing at the highest level to ensure guests have a memorable experience.
But, Allen added, he is also concerned about skyrocketing inflation and its impact on workers. “We have really changed the lifestyle and living standards of thousands of people,” he said.
Inflation is impacting the company, resulting in some slowdown in July, Allen says. Rising interest rates and pressure on Americans’ savings could put pressure on Hard Rock for the second half of 2022 and the first two quarters of 2023, he said.
The company is already seeing pressure from currency worries as the strong dollar makes it more expensive for European tourists to visit the US, he said.
Russia’s ongoing invasion of Ukraine — which has pushed up energy and other living costs in Europe — is also hurting the company’s prime cafes, gateway cities such as Barcelona, Athens and London, Allen said. Tourism has fallen by 40% in some cases, he said.