Top Strategies for Hiring and Retaining Employees Today
Oyster Sunday’s Elizabeth Tilton explores the opportunities for alternative compensationMaggie Borden
July 23, 2021
As part of our Open for Good campaign to help restaurants survive the COVID-19 crisis and rebuild a more resilient, equitable industry, we’re offering food and beverage professionals business resources and advice from finances to marketing and beyond. Below, Elizabeth Tilton, founder and CEO of Oyster Sunday, an operating system for independent restaurants, shares strategies and insights for hiring and retaining employees in the current post-reopening climate.
- The restaurant and hospitality industry has a long history of problematic workplace culture (sexual harassment, substance abuse, wage inconsistencies, discrimination, classism, racism, etc.). The pandemic only further revealed these issues and how the traditional restaurant business model perpetuates a lot of these problems through its vulnerabilities.
- The traditional business model has stopped a lot of well-meaning operators from investing in employees and offering meaningful benefits. In a report by Urban Institute in 2017, 1 in 4 restaurant workers are uninsured.
- The current national hiring crisis is due in part to workers having to choose between their well-being and compensation – it’s not just about salary, but other factors like healthcare, childcare, transportation, and more—and what the hospitality industry offers vs. other types of employers.
- But the pandemic has also prompted innovation from restaurant owners and operators, who are exploring alternative business models.
- Three broad categories of alternative compensation models:
- Gratuity-free, employee profit sharing: often called “hospitality included”— is a system where servers don't accept tips and are instead paid an hourly living wage, often offering employee benefits like health insurance. Restaurants raise menu prices to be inclusive of service—tipping is built in, wages are higher, and there is less of a disparity in pay between front and back of house
- Cooperatives (co-ops): co-ops rely on employee engagement through profit sharing and employee governance, and tend to emphasize cross-training. You need strong company culture and clear leadership to convert successfully to a co-op. Learn more about food businesses across the country who have transitioned to co-ops.
- Employee Stock Ownership Plans (ESOPs): employees are given stock in the company as part of their compensation, making them shareholders. This is often advantageous to the company when it comes to taxes, and essentially ends up being a retirement plan for the employees—they never actually hold stock directly, but are paid out in cash when they quit or retire.
- There may be elements from these alternative models that can be applied to your restaurant. For example, even though many co-ops are grocery stores (think: Zingermans in Ann Arbor, MI), cross-training employees could be integrated into restaurant training protocols (especially if your business is also offering consumer packaged goods (CPG) as an alternative revenue source).
- Plus, there are changes that have occurred during COVID-19 that may stick around, such as shifting FOH workers from hourly to salaried. With reduced staff and reduced hours, some businesses have transitioned their FOH staff to salaried workers during the pandemic. Some employees may seek alternative employment because they want the ability to have higher compensation due to tips, but many may appreciate the stability that comes from not being reliant on covers. Salaries are also more predictable as a cost for operators over time vs. changing hourly workloads.
- What other kinds of benefits can you offer?
- Insurance: medical, dental, vision coverage
- Preventative Care, Mental Wellness, and Physical Wellness: gym contributions, therapy services, etc.
- Continuing Education: finance and operation transparency; scholarship opportunities; on-premises training and cross-training; external staging opportunities (partnerships with other restaurants); digital classes
Family Planning: maternity, paternity, and adoption leave; transition back to the workplace; childcare; elderly care; childhood education