The restaurant industry operates on a thin margin where changes in ingredient prices, equipment, and wages can make a big impact on the bottom line. Roles for people working at restaurants are varied, as is a person’s level of compensation. Some might be salaried, some get tips and some don’t. These moving parts among people and day-to-day operations can present a challenge for businesses when it comes to employee retention.
Does Reward Influence Employees?
We know that salary, bonuses, and benefits (Reward) are important to people. However, we don’t usually see Reward as a driver of engagement in Benchmark Reports for other industries, like New Tech and Professional Services. In our Retail and Hospitality Benchmark, which includes the restaurant industry, Reward was rated as a driver of Commitment for the first time. In other words, for those in the Retail and Hospitality industry, reward heavily influences a person’s decision to stay at or leave their company.
How Restaurants Manage Reward
Recent initiatives worldwide, and notably in New York and California, to raise the minimum wage will impact restaurants. To prepare for this change and focus on employee retention, restaurants are trying different methods of reward.
Some restaurants have eliminated tipping, including an appropriate amount for service into the price of each menu item. This gives more control over how wages are distributed among employees, leveling the playing field for front and back of house. Others have decided to implement service charges, which are then split according to the manager/owner’s discretion.
Restaurants will need to get creative with their budgets and margins to afford better compensation for their employees.
While low Reward scores in the Retail and Hospitality Benchmark Group show that people believe they are not compensated fairly in comparison to others in a similar role, they score highly in both company recommendation and pride.
These excerpts are from the Culture Amp 2016 Retail and Hospitality Benchmark Report. For more insights on this industry, download the full report.