As a hospitality consulting agency, we at Carbonate work with bars and restaurants of all types, categories and sizes, and one question all of our clients are currently asking is: “How can we find the right people to work for us?
”It’s no surprise that restaurants are facing an epic employment crisis right now. With so many restaurant workers losing their jobs during the pandemic, many left the industry to pursue careers in new fields, while others left the country. According to a November 2021 National Restaurant Association (NRA) survey, 77 percent of restaurants reported being short staffed – and we’re still hearing these complaints today, as the sector is down by one million jobs from pre-pandemic levels.
Restaurant jobs have traditionally been a way for someone without much formal education to work their way up to the top, ascending through the ranks from dishwasher to senior management. According to the NRA, eight out of 10 restaurant owners started in entry level positions. However, these days fewer are entering the industry as a long-term career path.
With the current labor challenges, bars and restaurants have been forced to reevaluate how they do business in order to attract the talent they need. With already slim profit margins, traditional methods – like increasing wages – are not enough. At the same time, restaurants have been exposed for toxic work-cultures, wage theft, gross inequalities and more. Now, a growing number of restaurants and bars are looking at ways they can better serve the industry and help support their staff, thus helping find and retain employees.
Tipping
Tipping has been hotly debated for the past several years. The hierarchy ingrained in a tipping system can mean that a server or bartender in a busy restaurant can make as much on a Friday night as a line cook does the entire week. Additionally, data has increasingly shown that the practice can contribute to racism, sexism and harassment.
As the inequities built into the traditional system come to the forefront, some restaurants are adopting new models in an effort to attract and retain staff, and foster a culture of inclusion. Good Good Culture Club (San Francisco, Calif.), nominated by Bon Appetit as one of the “50 Best New Restaurants in the Country,” sums this up perfectly on their website, publicly proclaiming, “We believe all staff should benefit equitably. The public should not decide which of our staff members earn more gratuity. There have been inequities and imbalances baked into restaurant pay scales for far too long. We are looking to disrupt this archaic system and build a better one. For this reason, we structure our 20 percent fee equitably. Our entire restaurant family benefits, not only some.”
Different ways restaurants have attempted to change the traditional tipping model include:
- Gratuity inclusive pricing (divided equally among all hourly workers)
- A mandatory service charge at the end of a bill
- Mandatory pooled tips divided among front and back of house
- (Much more rarely) An additional line item at the end of the bill with the option to tip the kitchen
Gratuity inclusive pricing is a model in which all menu items are marked up in price to offset the removal of tips. These funds are distributed equally between the front-of-house and back-of-house, and hourly staff may earn a prorated portion of sales. While many restaurant owners worry that higher prices will scare customers away, some have seen success with this approach. Bluestem Restaurant & Market (San Francisco, Calif.) adopted this model when they reopened after the pandemic. While they were worried, feedback from both consumers and staff has been overwhelmingly positive. Inclusive gratuity was a move that Bluestem adopted not only to help reduce inequalities, but also to help alleviate the stress and anxiety of being dependent on others’ discretion to earn a fair wage. The most oft-cited reason for keeping a traditional tipping system is that it is harder to find servers because they earn more money with tips. The overlooked part of this argument is that those tips are a gamble – there is no guarantee on any given night what that income will be.
“We really wanted to eliminate financial insecurity,” explains Adam Jed, a co-founder of Bluestem Restaurant & Market. “We wanted to offer our employees a living wage and full benefits, like most other industries do. We guarantee them 40 hours a week, regardless if the restaurant is busy or quiet. It costs us. But it felt like the right thing to do.”
Even with the best of intentions, eliminating tipping isn’t as easy as it sounds. The Union Square Hospitality Group (New York City) became one of the pioneers and champions of the “hospitality included” (a.k.a. no tipping) model in 2013, only to reintroduce them in the throes of the pandemic. Before deciding if moving to an alternative tipping model is right for your business, it’s necessary to consider all of the potential benefits and drawbacks involved.
Benefits
Benefits are another way restaurants are upping the ante, offering more financial support for their staff. Restaurant workers have rarely earned health care, dental insurance, sick pay or time off – all of which can be critical to maintain a healthy and happy workforce. According to Toast’s 2019 Restaurant Success Report, only 31 percent of restaurants surveyed provided health insurance.
Some of the largest QSR brands are leading the way with increasingly comprehensive benefits. Chipotle offers hourly workers potential quarterly bonuses tied to store performance, education assistance, paid time-off, optional health and dental insurance or 401(K) match, and a free meal during every service. They also offer access to many other programs including a mental health hotline and discounted gym memberships aimed at fostering the employee’s well being.
While huge multi-unit operators have more capital, and their larger size can help them negotiate better deals, small independent businesses are also making waves by offering more benefits. Controversial surcharges to receipts to cover employee health care have been popping up for over a decade. Many restaurants favored this approach so as not to raise prices and to help educate guests on the costs of actually running a restaurant. San Francisco’s legendary Zuni Cafe has a mandatory 25 percent surcharge; 20 percent is a “fair wage” fee and another five percent is the San Francisco Health Mandate Fee – both are listed out on the customer’s bill (the health surcharge is becoming increasingly common in California restaurants).
Shifting Service Models
Pandemic shutdowns, coupled with emerging restaurant technology, gave bars and restaurants an opportunity to change their service models. This has manifested itself in everything from mobile ordering and payment, to cross-training staff to cover more roles, to hybrid service models enabled by technology.
During the pandemic, Toast was quick to introduce a mobile order and payment system enabled by QR codes. Guests could order and pay at the table using their cell phones without having to grab a server’s attention. This applied not only to the first order, but to ordering additional drinks or desserts as well. Restaurants using this technology appreciate how it allows them to serve more people with less staff – a huge benefit during a labor shortage.
Curio, another bar and restaurant in San Francisco, Calif., adopted another mobile and payment system called CheqOut. “I am super grateful to have been able to implement it quickly and easily,” shares Patricia Gums, director of restaurant operations and private events. “It made a huge impact on being able to service our guests when we were understaffed, even when we were at full capacity.”
Gums credits the system with helping them cope with the labor crisis and avoid the temporary or partial closures many restaurants experienced. However, the restaurant reverted back to servers taking and processing orders once the restaurant was again fully staffed, wanting to restore more human interaction between the restaurant and guests.
Another way restaurants are serving more people with less staff is by cross-training staff to cover multiple roles. This means that the same person might deliver an order to one table, bus a few dirty plates from another, and then start making a drink for a third. This cross-training is not only helping break down traditional hierarchies in the dining room, but also giving more people opportunities for growth. Many workers appreciate it too, finding the job more interesting and less repetitive, and appreciating a more equitable team mentality. On the flip side, some may resent having extra tasks added to their role, especially those such as cleaning.
Enabling Non-Traditional Schedules
Another less visible tactic restaurants have adopted to help attract and retain workers is accommodating varied work schedules. Parents of school aged children might prefer to work during the day when the kids aren’t at home, and be home at night so they don’t have to hire a caregiver or rely on someone else to watch the kids.
Bluestem took this a step further when they reopened. After reaching out to long-time staffers, they helped create positions tailored to peoples’ needs. They guarantee all hourly staff a minimum of 40 hours a week to help alleviate the financial anxiety around hourly work and in order to help ensure all staff can pay their rent. One server helps with photography, taking pictures of menu items to use on social media or for the restaurant’s digital menu; another has been trained to use the inventory software, a job which can be done from home part-time.
Setting Guest Expectations
If a restaurant or bar decides to go down this road and change their service model or compensation structure, it’s crucial it be clearly communicated. Benefits (both real and intangible) should be promoted in job descriptions, and efforts should be shared on social media and on your website. This can help you not only attract potential workers, but explain to your guests how much you care, and why your pricing is what it is. In addition to helping attract potential workers, these efforts could also appeal to guests – people like supporting brands that share their values. This helps build a stronger, loyal relationship not only with your team members, but also with your guests.
These changes aren’t easy and can take time to implement and get accustomed to, but an opportunity now exists to rethink the structure of our industry, and how it can better serve workers, operators, and guests.
Leith Steel is a senior strategist and head of insights at Carbonate. With more than 20 years of experience in the culinary arts, media relations and brand strategy, Steel spearheads the creation of the agency’s annual trends report, and executes strategic public relations campaigns rooted in industry insights. Carbonate is a brand communications and creative services agency specializing in food, beverage, hospitality, lifestyle, travel and food tech. To learn more about Carbonate and its services, visit CarbonateGroup.com.
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