Planning for Restaurant Wage Increases
As I sift through internet headlines on minimum wage increases, I see a common thread weaving throughout each title; war. “War of the Wages,” “Wage Wars,” “The Minimum Wage War” have all hijacked my entire screen. It’s as clear as glass – this topic is a heated one where everyone has an opinion yet the way in which the increases should be handled is, unfortunately, not quite as clear. There is no magic solution that unifies everyone’s decision.
Restaurant owners who’ve already taken the increases head on have seemingly stirred the pot through implementing new practices in which they thought were right for their operations. I personally think there’s much to be said about owners who see change on the horizon and take control of their own destiny by making intelligent decisions, devising a plan and sticking with it – no matter what the public outcry may elicit.
We’ve been over this before; not everyone is going to be happy with your plan, and that’s okay. Through all the commotion about what your guests may think of adding a surcharge, or increasing your menu prices, it’s easy to gloss over the fact that your team has been stuck smack dab in the center of the debate; and of course, they too have their own opinions on the matter. They’ve ultimately been jammed in the middle of a tug-of-war.
How To Handle When The Wage Wave Crashes On Your State
When a wage increase hits your state (if it hasn’t already) you will need to make a final decision regarding the best way to manage the increase. It is essential to keep your team members in mind. It’s quite obvious that right off the bat they’re affected. They’ll now receive a higher rate of pay for their contribution to your restaurant. So how will adding surcharges, increasing menu prices, or aggressive labor scheduling affect them as well? Once again, it’s all dependent upon how you handle each change.
I mentioned in our last blog post, about Menu Price Increases, that we’re a tip-oriented culture so a surcharge may be perceived as the restaurant hoarding extra money rather than funneling it back to the employees. It’s a valid concern if you don’t educate your guests and your message is confusing. IS the money going back to the employees? Are surcharges going towards healthcare for your team or is it going elsewhere? Let’s say that you decide you’re going to add a surcharge, and it will indeed filter back to healthcare for your team. In this case you may be setting yourself up for lower employee turnover because you’re providing them great benefits; ultimately benefiting yourself when you’re not paying for a revolving employee door to your restaurant. However, will your tipped employees receive lower tips because patrons are incurring the surcharge? Could that possibly keep the revolving door spinning?
Keep in mind that adding a surcharge is not a sole factor that will affect your team members in regards to how they’re tipped. Should you increase prices on your bestseller or maybe increase prices less dramatically across your entire menu, your guest check average will go up, right?
Well if guest check averages are higher, in theory, tips would increase as well; this again coming full circle to lower turnover being that bigger tips typically mean happier employees, and happier employees generally mean longevity.
Labor Management & Scheduling
Now before I wrap this up, let’s take a quick moment to go over skeleton schedulers. I’m referring to the operators who are thinking that aggressive labor scheduling may be their best option to equalize higher wages. Clearly this one will hit your team pretty hard if their shifts are cut to a minimum. If you don’t have enough staff to satisfy consumer demands, are you still providing that same great value to your guests that you pride yourself so dearly on? Will you be able to provide a space for your team to find longevity? Frankly, there are pros and cons to every adjustment you’re going to have to make when addressing minimum wage increases – make sure you know exactly how your best ambassadors will fare in the tug-of-war.