DeeDee and I are always excited when we receive a question from our email communication with you. We received a question recently from a restaurant owner, who will remain anonymous, but wants to share his question and our answer.
Here it is:
The restaurant owner’s establishment is in a town that the local government authorities are considering raising the minimum wage well above the federal mandate. We have been watching this trend for some time. It has already happened in some locations. The owner whom is also the chef, is shall we say…..”Distressed”, as he knows it is not if but when this change is signed into a law. As we know the ones whom make the rules are often not affected by them.
Our thoughts are as follows….. Firstly, the business owner is wise in getting ahead of the challenge/problem. Ignoring what will impact your business is wrong and always leads to rushed and often poor results. Having worked with many owners in the restaurant and service industries, the metrics that are always on the “menu” for discussion are food costs and everything “employees”. The business of serving food to consumers is typically a low wage occupation as servers and other support staff in the dining room makes up these low wages with tips supplied by the dining patrons. When the mandate comes that the minimum wage is increased for all business, those businesses will have to have a working model that meets or exceeds the new rules.
Let’s look at the advantages; as we see opportunity here. Staff turnover in this industry hovers over 60%. That is a lot of lost productivity in new hires, training, uniforms and the list goes on. If you could minimize turnover costs, what would that mean to your bottom line? Sometimes doing the right thing is painful in the beginning, however being an employer of choice that employees are knocking on your door to work for, will reap success for all. By taking a proactive step and changing your model today you are one step ahead of your competition and the best servers are now choosing to work with you.
Restaurant patrons watch the news and are not blind to what is happening in your community. Dining out is at an all-time high. We suggested a no more tipping policy, clearly posted on the menu and table top cards. Instead a service charge is added to the bill automatically. Prices on menu items should also be looked at carefully. Consider raising them a dollar or two. Everyone in the restaurant employ would benefit as the monies collected are distributed among all from food preparers, servers, host or hostess and the dishwasher alike. Along with this strategy the employees of the restaurant have to understand and buy into; that a service forward attitude, good customer experience, and food presentation are keys to success. This success is shared by all and not just you. They have control over how much they make and they also keep a watchful eye on each other to ensure that everyone is pulling their weight. We have seen this practice successfully implemented and you would be amazed to see the dynamics change. The way the staff now all focus in the same direction, each one helping the other to be better is awesome to witness.
Verbalizing the need for your staff to work harder and smarter to exceed the customers experience is important. Cross train everyone so that there isn’t an “it’s not my job” mentality and any person can jump into the others role if the need arises.
Have you had a big night, full tables, waiting line? Consider a bonus once a threshold is met. Great things can happen in the work place when you issue a challenge and make work fun. Additionally, this type of practice encourages your staff to get a full house often. If they reap more rewards for a night at capacity, they will push to get that full house.
Use your email list and social media to keep your business on the minds of your patrons. Ask your employees to post their network of friends and family about specials and events. Their first post can be about the change that dining guests no longer need to calculate tipping and that this policy change is to benefit your hard working staff whose goal is to increase the experience of your patrons. This solution was well received by the patrons of the restaurant owner we were working with. We believe this model is sustainable for many businesses that have tipped employees.
Commit to regular meetings with your staff, stay connected and communicate with them. Let them know that with this change in pay also come higher expectations. Giving requires receiving in order for there to be a win-win outcome.
Please continue the discussion and post your thoughts. If you have a problem or challenge, contact us. There is no cost for you to take 10 minutes of your time and reach out to us.
To Your Success!
Richard and DeeDee Ford