Monday, September 7, 2015

Finding and retaining restaurant staff

In this current time of economic recovery one of the fastest and best sectors of growth is the restaurant industry. It seems people are cooking less and dining out more and so there has been an explosion of restaurants throughout the country, both by chain restaurants and independent restaurateurs. 

What hasn't been matching this growth is the labor force. Nationwide there is a shortage of restaurant labor, from bussers to executive chefs and general managers. This creates a cycle of constant turnover, especially when staff can easily jump from job to job.

This begs the question, how to attract and then retain quality staff? Here are a few areas where restaurants are trying new approaches.

Wages

All over the country there is debate and politics going on with raising the minimum wage. Some cities have already done it, most notably San Francisco, Oakland, and Seattle.  
  
Most servers are paid minimum wage with the expectation that they will make a decent amount in tips. In some markets many Back-of-house (BOH) staff (cooks, dishwashers, etc.) also make above the current minimum wage because the market is so competitive to hire them. 

Tipping vs Service Charges

Most of the general population does not know that minimum wage for servers can be different than other workers. In some states servers are only paid $2.13 an hour. The rest of their livelihood is from tips. 

Another fact much of the public is ignorant of is that tips cannot be shared with BOH according to the Fair Labor Standards Act.  The disparity of tipping between Front-of-House (FOH) and BOH was discussed in a recent Washington Post article. Because of this more restaurants in major cities are adding a BOH tipping line whereby patrons can leave a small tip specifically for the BOH. This has proven confusing to many since they don't understand the workings of a restaurant.

Most people are accustomed to the addition of a 18-20% service charge for when they have a large party of, say, eight or more. Another change in the industry is to get rid of tipping altogether and just add a service charge to every bill. This has especially become a more popular option in those higher minimum wage cities such as San Francisco and Seattle. Service fees can benefit both FOH and BOH staff, unlike tips. Those most against it are, not surprisingly, the servers. In many cases, though, they find out that service charges are just as good and easier than tipping.

Profit Sharing and/or Benefits 

Restaurants, like All the Sea Creatures Restaurants in Seattle, use a 20% service charge to level out pay inequities and increase the pay of all staff to at least $15 per hour without increasing the prices on the menu. But they and other restaurants are also taking an extra step to retain workers by offering 401K plans and health insurance. There are even restaurants who help to pay off a chef's culinary student loans.


There are a few that are going even further with profit sharing. Zazie in San Francisco not only offers an employer match 401K plan, health insurance, and dental insurance, but profit sharing as well. Yes, it's meant raising the menu prices, but customers have understood and adopted to the change. 

Raising Menu Prices

In the case of Zazie, prices were raised as much as 20% but customers didn't mind in the end.  The reason? Well if you are already paying 20% of the bill as a tip, how is that different from raising the menu 20% and then eliminating tips? In reality, it's a wash.  

The ones who mind are those customers who either are low tippers to begin with, or those who still believe that tipping is a reward system and so they fluctuate their tips depending on how they perceive service.  



In the end local restaurants will be weighing their options carefully because the stakes are high. They may chose to try one or more of the options. With the ever increasing number of restaurants and yet no great increase in the restaurant labor force, it will be interesting to see the paths taken to attract and retain restaurant staff.   

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