Would a Creative Management Structure Fix Your Restaurant?

The restaurant industry has a long history of short employee retention spans. Traditional restaurant models rely on tipping servers, subminimum wages, and hierarchical management structures. however, this hasn’t often led to substantial profit margins or employees who want to stick around. That’s why some restaurants have begun experimenting with nontraditional models in the hopes of breaking ground on a better future.

When you alter your management style to align with employees’ expectations and create an ideal, even collaborative workplace environment, you let them know that you’re invested in them. In turn, they’re more likely to put in a greater effort for you. The restaurant industry can be a sustainable career with the right compensation—and that doesn’t just mean monetary benefits. Here are just a few creative approaches that let staff members know you’re in it for the long haul with them, so you can reduce turnover and improve your operations and bottom line.

Creative Management Structures

The model you choose influences hiring and retention rates as well as employee morale which in turn has an effect on customer service, and thus your profits too. There’s a lot of dominos that get knocked over with any given management structure, so it’s important to choose correctly.

Benefits

Health, vision, and dental plans are pretty far and few between in the restaurant industry. Most of the time, workers don’t get a benefits package when they rehired. In a tight labor market, you’ll want anything that improves recruitment and retention. Offering benefits gives you an edge on the competition helps you stand out, so employees will want to hitch themselves to your wagon.

Safe and Inclusive Environment

According to a 2019 report from the Bureau of Labor Statistics, the restaurant industry’s annual turnover rate is 74.9%. That’s insanely high, and part of it is because of the low pay and poor treatment workers receive on the job. Thus fostering a better workplace environment is hugely beneficial for everybody; employees who feel respected and safe tend to stick around, especially since that type of workplace is so hard to come by.

It begins at the hiring process. Hire diversely to bring more voices to the table and understand their needs and interests. You can partner with certain organizations that place refugees, ex-cons, and people from the foster system into restaurant positions to open up such a dialogue. Then educate your staff: Host cultural, diversity, and sensitivity orientations as part of their job training so they have a rubric for behaving appropriately with coworkers and guests. This will promote inclusivity and empowerment amongst your staff.

You should also take steps to combat sexual harassment in the workplace. The restaurant industry is a notoriously popular employer for women and immigrants, who are at greater risk of mistreatment from customers. They’re also the ones who tend to face the consequences of others’ bad behavior. One restaurant implemented a three-light system in response to this issue, where staff members simply notify the manager about a bad situation by telling them a color. Then the supervisor handles it, no questions asked. Yellow means uncomfortable looks or a bad feeling, where servers can request supervision or a new table assignment if they so choose; orange is for questionable comments or gestures, and the manager automatically takes over the table for them; red is an escalation of too many orange flags, inappropriate comments or touching, and leads to the customer being immediately removed from the restaurant. Staff members don’t have to justify or explain the colors they say, so they feel safe and empowered to raise concerns whenever they arise.

Open-Book Management

This model creates an open dialogue between workers and management, thus fostering trust and communication. Basically, upper management tells the employees everything about their revenue and business structure so staff members see how they each fit into the bigger picture; they understand exactly how their position helps out the restaurant on a larger scale, which encourages greater investment in the establishment. It also lends you more credibility as a manager because they can see how much you’re really taking home at the end of the day, as opposed to blindly assuming that you make bank while they scrape by on below-minimum wage.

Of course, this structure comes with some extra accountability on your end but it also lends staff greater job security, provides you with lower Costs of Goods Sold, and higher staff retention.

Employee Profit-Sharing

Also known as revenue-sharing, this model encourages work through incentives. Essentially, employees get extra payment on top of their regular compensation and bonuses depending on the restaurant’s profitability in any given time frame. This type of reward system doesn’t have to go hand-in-hand with open-book management but it often does, since everyone directly benefits when the restaurant does well—and they can see exactly how certain behaviors influence profitability, too.

Gratuity-Free

Also known as tip-free or hospitality-included, this model eradicates the usual tipping structure. Instead of letting servers take a little extra home while getting paid a suboptimal wage (the federal tipped minimum wage is $2.13), restaurants instead pay a living wage and health insurance.

Lower wages go hand-in-hand with employment discrimination and harassment, particularly because the restaurant industry is staffed by a lot of vulnerable, marginalized people. Without a living wage, they don’t have enough stability to speak up about disrespect and unfair treatment. Gratuity-free service models give workers more power to set boundaries and cultivate a safe work environment. There are still only a couple hundred gratuity-free restaurants in the U.S.A. today, but the idea is gaining traction as workers increasingly get on board with it. The more contended your workers are, after all, the better your customers’ experiences will be.

Mission-Driven Community Advocacy

A profit-share model—profit-share, not profit-sharing—connects employees around a good cause. Talk to your staff and determine what really matters to them, and then donate a portion of your proceeds to that cause or people in need in your community. Not only does this bring your employees closer to the business, encouraging them to work harder because they’re working for charity too, but it improves customer relationships when they know you’re involved with community action.

Which Model Is Right For You?

Like all else in business, there’s no one-size-fits-all solution. Different models work for different restaurants. Don’t be afraid to test out different systems, talk to your staff and customers, and see what’s most likely to get employees motivated and excited to put in a hard day’s work. With a management model that breaks from tradition, you’ll improve employee morale, better customers’ experiences, and see your profits skyrocket.

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