What are some of the creative ways that bar and restaurant owners and operators are investing in their workers right now?
Bar & Restaurant News spoke with several industry leaders and consultants, who suggested upskilling and advancement opportunities, revenue sharing, digital tip payouts, health insurance and tele-health, and other strategies.
Offer Upskilling and Advancement Opportunities
Kam Talebi, CEO and owner of Minneapolis, Minn.-based Kaskaid Hospitality, which owns and operates several restaurants – including CRAVE, Butcher's Tale, and Union Bar & Grill – said the only way to recruit great restaurant staff, and keep them, is to pave out a clear path for a lifetime career (from hosting to management, or from washing dishes to executive chef, etc.).
“There are still upscale restaurants where you can get a job in the kitchen, come in in your spare time to learn from the chef, and work your way into the chef’s job,” said Talebi. “However, some places still prefer a culinary degree. The former is more cost effective.”
According to Talebi, many restaurant jobs can be a dead-end career at some establishments, and employees know that. These employees might love cooking and/or taking care of customers, but they might not see a way to advance, unless they decide to find a job somewhere else or start their own restaurant. Talebi explained that employees have to be able to move up within a restaurant or bar – from dishwasher to chef, etc. – in order to take their jobs seriously and care about the overall health of the company.
Talebi also pointed out that when the COVID-19 pandemic happened, a huge section of restaurant employees realized that they had actually been in survival mode for years and were “rudderless.” During the pandemic months, when they were collecting unemployment, many of them proactively decided to pursue new paths – often outside of the bar and restaurant industry. “This is why so many restaurants are having such a difficult time recruiting and retaining employees – a large swath of the talent pool got into different industries,” said Talebi.
At his restaurants, Talebi recruits with the promise of upskilling and advancing employees within the company. “We’ve even created several roles in the kitchen and front of house so that employees have more places to be promoted between entry level and management,” he said. “This is the only way that I know of to attract and retain the best food workers. They have to have a future and vested interest in the business as a whole.”
RELATED: Retaining Employees: Here’s How to Attract and Keep Staff Happy at Your Bar or Restaurant
Implement Revenue Sharing
Nikita Khandheria, CEO of Ditas in Sausalito, Calif. – a fine dining destination, occupying the former principal yacht club of San Francisco – said they offer revenue sharing opportunities for their team members.
“Our employees – especially the managerial team – are helping set-up and run this business alongside me,” said Khandheria. “They deserve to have a piece of the success, as they are helping build the foundation. Not only does this keep them motivated, but it allows me to make the operation scalable. Those who have a piece of ownership are less likely to leave the company and take their institutional knowledge with them. We offer revenue shares to our management team after six months.”
Khandheria said she finds it empowering to give her employees investment opportunities at a subsidized rate. “Being in the San Francisco area and being a math, computer science, and economics nerd, investing has always played an integral role in building a company,” she shared. “By having options like sweat equity and revenue shares, it allows your employees to see the bigger picture and to really work together as a team.”
Besides revenue sharing, Khandheria likes to let employees get involved with projects as consultants, as a way to diversify their interest in the establishment and to let them learn something new.
“People stay at jobs for three reasons: resume building, pay, or to learn something,” Khandheria noted. “I may not have the biggest name in the industry. I may not be able to offer the highest pay, but I am always offering opportunities for my employees to learn. Whether they are learning how to get VC funding, or consulting on my AI projects, it is important to offer new opportunities to people within the company.”
Use Digital Tip Payouts
CJ Dimino, director of restaurant operations at Hop City Craft Beer & Wine – with locations in Fayetteville, Ga., Atlanta and Birmingham, Ala. – said he was quick to recognize that faster payments have become crucial to retaining restaurant talent in today’s economy.
“You miss tips for even one day and all hell breaks loose,” said Dimino. “We’re in one of those multi-use developments – you’ve got restaurants, apartments, offices… any employee could go two doors down and get another job instantly, if they wanted,” he said. “So, this solution had to be perfect.”
Dimino turned to a workforce payments platform, Branch, to send instant digital tip payouts to their employees at the end of each night. “It speeds things up a lot,” said Dimino. “On a Friday night, the manager is responsible for paying out the whole staff at the end of the night, which is maybe 30 people. In the past, that was stuffing 30 envelopes with tips – and that is time-consuming, just the physical manual labor. I’d say it saves between one to two hours of management time each day. Now the process takes 10 minutes, tops.”
Prior to switching to Branch, Dimino said he and his team were using a complicated spreadsheet that he built to tip out employees. “There were different fields for different prompts; you’d put in people’s names, job information, and all of these other fields through manual data entry,” he explained. “Any time you do that, there will be potential for error, whether it’s transposing numbers, putting the wrong thing in the wrong field – there’s a million different things that could happen. [These solutions] eliminate that 100 percent.”
Invest in Employees Through Health Insurance
One of the major ways to invest in employees is through health insurance. Unfortunately, many independent bar and restaurant operations can’t afford to offer health insurance, said Izzy Kharasch, a Chicago-based consultant, president of Hospitality Works, and frequent speaker at Bar & Restaurant Expo. “The main reason is the cost of those benefits and because such a large number of staff are under 30, there is a lack of participation.”
For staff that is older, there is a real concern that they get some type of health care/benefits. Kharasch found a way to bridge this issue, which gives his restaurant clients’ staff an opportunity for healthcare (not health insurance), which has lowered turnover for some operations. They implemented tele-medicine or tele-health through Teladoc, a leader in virtual healthcare.
“Eighty percent of the reasons we go to the doctor can be covered via tele-medicine,” said Kharasch. “Employees love that they can see a doctor 24-hours a day, get their prescription immediately and not miss a day of work. The fact that this covers their entire family is a deal closer for our teams. Many of the employees tell me that they appreciate that mental health is covered as well. My clients pick up 100 percent of the costs and nearly all employees, regardless of age, participate in the program.”
Focus on Increasing Overall Employee Job Satisfaction
Chris Schneider, host of The Bar Business Podcast and consultant under The Bar Business Coach brand, said owners can find innovative ways to provide their teams with benefits that increase employee job satisfaction, promote a healthy workplace, and lead to less turnover.
When addressing unique employee benefit programs with his clients, Schneider encourages them to think about two main categories – marginal expense with moderate impact and moderate expense with large impact.
Some “marginal expense with moderate impact” ideas that Schneider recommends include:
- Provide a family meal daily (usually between lunch and dinner shifts; roughly 5 p.m. for most establishments, or before opening, if the bar or restaurant is only open in the evening). This does not have to be something that is offered off of the menu but should be a complete and filling meal that employees can rely on, said Schneider.
- Offer an employee food discount for employees who are not on shift or want something at times other than the family meal.
- Provide frequent and informative training and tastings to help employees develop and show that you care about their growth. Schneider said these can normally be arranged through suppliers at no cost, especially when changing a wine, beer, or cocktail list.
- Gamify key performance indicators at the venue. For instance, Schneider said you can give team members points for hitting specific goals, such as average sales per guest, number of specialty cocktails sold, average service ticket times for bartenders, or average ticket times for the kitchen. Then based on points earned, awards/prizes can be given out. These can include things like free goods from vendors or other merchandise and swag.
- Schneider said another great incentive is to arrange a trip to a supplier production facility, such as a brewery for the front of house, or a farm that supplies meat for the back of house, and then use the trip as an incentive for a small number of employees.
Some “moderate expense with large impact” ideas that Schneider recommends include:
- Telehealth services. There are multiple companies that offer telehealth services, Schneider said. Most of these providers are large health insurance companies or hospital groups, and some even offer unlimited service for under $10 per employee per month.
- An employee wellness reimbursement program should be considered. Outside of providing actual healthcare, Schneider said it isn’t hard to set up a program that reimburses employees for expenses that promote health and wellbeing. For instance, gym memberships, acupuncture or chiropractor visits, etc. Even a benefit of $50/month is something unique that very few other bars and restaurants do, he said.
- Paid sick leave. “This is a huge benefit for employees in states that do not have statutory paid sick leave,” Schneider noted. “Giving employees as little as 10 days paid sick time a year is a huge benefit and differentiator over other businesses in the area that do not.”
Erin Flynn Jay is a reporter and publicist based in Philadelphia. She’s also an occasional contributor to Questex’s World Tea News and Bar & Restaurant News. Other writing credits include Next Avenue and Woman’s World, among many others.
Are you registered for our Crave and Crave on the Menu newsletters? Sign up today!
Plan to Attend or Participate in the 2024 Bar & Restaurant Expo, March 18-20, 2024
To learn about the latest trends, issues and hot topics, and to experience and taste the best products within the bar, restaurant and hospitality industry, plan to attend Bar & Restaurant Expo 2024 in Las Vegas. Visit BarandRestaurantExpo.com.
To book your sponsorship or exhibit space at the 2024 Bar & Restaurant Expo, contact:
Veronica Gonnello (for companies A to G) e: [email protected] p: 212-895-8244
Tim Schultz (for companies H to Q) e: [email protected] p: 917-258-8589
Fadi Alsayegh (for companies R to Z) e: [email protected] p: 917-258-5174
Also, be sure to follow Bar & Restaurant on Facebook and Instagram for all the latest industry news and trends.