Seems like it was just yesterday when I struggling to find something appropriate to write for my 100th post. My how time flies when… This 200th post is coming out with little fanfare, but on a subject that all restaurateurs, at least in Portland, Seattle, San Francisco, Los Angeles, New York, or any other city not in a red state, should be paying close attention to.
How to manage the inevitable dramatic increase to the minimum wage
One restaurateur in town, with two restaurants (that unfortunately I cannot name due to some weird thing that goes on in this warped brain of mine), has decided to face this head on by eliminating tipping altogether, and by cross training his servers and his line cooks–that’s right, so his waiters are going to learn to work in the kitchen, and his cooks are going to learn to work out in the front-of-the-house. I will leave it for you to decide which of those is of more concern.
He will be also scheduling employees to work 40 hours a week to qualify for health insurance and raising his prices about 18% to pay for it. I love this idea. Not so much because I agree with it, or how he is handling it necessarily, but rather because he is being proactive on the subject.
When I meet with consulting clients now, I bring this up. It would be naïve to think that changes aren’t coming in this area.
So what are you going to do about it?
I don’t necessarily have the answer to this–every place is different and will require different solutions–but one thing I do know: If I am the owner of a restaurant, I am going to spend some time thinking about it, and coming up with two or three possible solutions, before I have to.
There is a famous restaurateur in Seattle who is planning a similar plan for his 3 restaurants. His approach will be different, but with the same idea in mind. He will end tipping and just add a 20% service charge to every check to make wages and benefits more equitable for his staff.
It is happening, folks, better get used to it. I have a number of ideas of how to handle such a thing, depending on the size of the restaurant. Large restaurants, with big volume are going to require a different approach than the smaller restaurants.
Maybe not. This is not going to be a one-size-fits-all solution. It is going to take some imagination. The transition for this will not be smooth for many places. It is also going to take patience from both the restaurant and its employees, but also from the customer. Those customers are just like a lot of waiters, and expect things to play out a certain way, and don’t like it when they don’t.
I recommend planning for it NOW. Why wait? Why get caught unawares? Come up with a plan that fits your restaurant. Remember also that the solution you start with may not be the one you ultimately use. Start the conversation. Part of this transition will be changing the mental approach of your employees…