Why Restaurants Need To Invest In Their Most Valuable Asset - Their People
Best Served & Fireside at Five #1
by Andrew Parr
This article is the first in a series of five that will focus on different aspects of the restaurant industry. The series is based on five panel discussions created through a collaboration of Jensen Cummings’s Best Served Live and Connor Holmes’s & Gertie Harris’s Fireside at Five. Cummings has also developed the Paragon Pillars, the “North Star” guiding all of his conversations. The Paragon Pillars set the lofty goals of creating an environment in which restaurants can attain 75% employee retention and satisfaction coupled with 19% net profit at flow state. Jensen Cummings also gets a high five on the assist with this piece. Fireside at Five finds its genesis from FDR’s Fireside Chats. Its mission is to provide a welcoming environment where passionate and engaged professionals can connect with other diverse colleagues in a facilitated and intentional format.
Today’s contributing panelists include James Beard Foundation Award nominated Caroline Glover, Chef and Co-Owner of Annette; Austin Carson, Co-Owner of Restaurant Olivia; Erin Boyle, Chef and founding member of The Denver Chef’s Guild as well as Board Member of CHOW; and Bryant Dulin, serial entrepreneur and Founder of KOBEYO. Glover’s restaurant hires all employees at the same rate and shares tips across all non-management members of the team. Carson’s restaurant adheres to a hospitality included pay model. With CHOW, Boyle is focused on employee mental health and wellness. Finally, Dulin’s KOBEYO is a technology company which created a job search tool placing the most highly qualified candidates with employers while striving to support people living their best lives.
The Paragon Pillars place Why and Who before What, How, Where and When. This 1st panel is focused on Who, with the specific underpinnings being wages, benefits, culture and education to drive 75% employee retention and satisfaction. The question posed to the panelists by Cummings, was what everyone is currently seeing as employee desires or what are they providing right now for employees and how they may differ from what has always considered to be “the standard” in the industry.
Boyle, as a member of non-profit organizations that serve the restaurant community, kicked-off the conversation. Considering our current local and national COVID-19 environment, it should come as no surprise that she led with safe, sanitary and mentally healthy work environments; and followed immediately with a clearly defined sick day system. Boyle said she is hearing frequent requests for a tip pool system including the back of the house, which requires that all employees make at least full minimum wage and prevents use of the tip credit minimum wage available in at least 46 states and territories. From a soft skills perspective, employees are asking for employer transparency in financials (yes, employees can actually be part of the solution if they know what the problem is); management and employee empowerment, particularly when it comes to preventing guests who refuse to follow health guidance from entering the restaurant; and simply talking to employees as individuals to better understand what is important to them.
Dulin’s perspective is from the outside looking in, and his point of view is unique and noteworthy. The first consideration is existing industry wages relative to work output balanced against current unemployment benefits. I know, that’s a mouthful — feel free to read it again. We are talking about pay rate versus how hard you have to work to earn that pay relative to unemployment income for not working. When this is combined with Boyle’s observation that the number one employee concern is for safe, sanitary and mentally healthy work environments you see why, particularly in this industry, there may be a reluctance for employees to immediately return to work. Dulin also noted that restaurant workers are in the process of re-evaluating the industry overall and trying to determine which of their skills are transferable to other industries. This could lead to top talent fleeing the typical restaurant employment, either for another industry, or as Dulin suggested, to own and operate their own ghost kitchen while looking in the rearview mirror at being someone else’s employee.
Glover started her segment with a reference to what used to be and how it needs to go away. She noted employers taking advantage of employee’s (particularly cook’s) passion and using that to pay lower wages leading to back of the house pay that is downright exploitive. Under the old model, it was exceptionally commonplace for the most dedicated cooks to come to work sick, work hard and “push through,” to the extent of puking in the trash can only to return to their station and keep on keepin’ on. With Glover’s “equal pay” model, employees are averaging between $28 and $36 per hour when pooled tips are combined with full hourly minimum wage. Additionally, since Colorado’s minimum wage has gone up $0.90 an hour every year since January 1, 2016, all employees have seen the benefit of a de facto raise every year. This model provides far more equity for all positions in the restaurant, allowing employees to work only one job and make a professional living in line with other occupations. Glover also has profit sharing for every original employee that opened the restaurant and offers health insurance after six months of employment.
Carson began with the dark and important notation that the entire industry was a house of cards with only a 6% profit margin for most independently owned and operated restaurants. COVID sped up and really exposed in a very raw way the exceptional vulnerabilities of the industry that already existed. He drew the analogy of the individual’s body and mind to a car — if you put on too many miles too quickly, it is unhealthy. The frenetic pace and physical requirements of restaurant work is akin to putting 50,000 miles on a car in one year. Some of the objectives Carson and his team espouse for their employees include an internal goal of $30 per hour for every employee under the hospitality included model; helping their employees look at their wages through the lens of a banker and working to provide wages that will allow them to qualify for a home loan, a car loan, or an apartment; and supporting employee health and well-being through a four day work week.
Each participant wrapped up with some final thoughts. Glover talked about adding financial transparency and shifting some of the responsibility to employees to reach a better profit margin (a significant education opportunity for employees as well) while rethinking the overall concept of a restaurant. Carson discussed the need for patience and compassion on behalf of guests in these trying times for everyone. He wants to get to a place where owner / operators are not working unsustainable hours, where employees are not de-incentivized to move up to management because of poor starting wages, and very decidedly implored restauranteurs to tear apart the entire budget as we know it and find a way to a new model. Boyle indicated that consumers are paying far too little for food and have been for a long time. This may be unpopular with those same consumers, but it is a stark reality for everyone up and down the line contributing to the output of every restaurant. Finally, Dulin discussed the only way moving forward is through scale, and one suggestion to achieve that is through cooperative purchasing systems. One way to get there right now is through Hive VOC, a company that provides cooperative purchasing on items spanning over 11,000 individual line items.
Each of the panelists, deftly moderated by Cummings, has illuminated some serious talking points about the Who in our industry, and Cummings tied it all back to the Paragon Pillars and achieving 75% employee retention and satisfaction. To that point, Boyle said, “It is ok to be touchy-feely in an industry of bad asses, and that it is imperative to listen to other people and to yourself about what is sustainable.” While this industry has always been hyper competitive, and while some leaders have been willing to share accolades with others, the time is now, as demonstrated through collaborative panels such as this, for the industry to look inward and develop the relationships with cohorts to bring the rising tides that raise all boats. Certainly, one conversation cannot solve all of the problems and provide a checklist of easy to execute solutions, however, sharing challenges and options out loud and without shame makes everyone stronger and provides the opportunity to truly connect the dots in an industry where neighbors don’t typically ask each other for help; you know, because we are bad asses!
WRITTEN BY
Andrew Parr is a restaurant and hospitality industry leader with over 25 years of experience including operations, consulting, project management, & mentorship. He is the Founder + Chief Advisor at Angry Olive Consulting in Denver, CO.
Facebook and Instagram @angryoliveconsulting.
Linked In: https://www.linkedin.com/in/andrewparr/
Additional information on Best Served + Fireside at Five and The Paragon Pillars:
Best Served + Fireside at Five chats can be viewed on YouTube
· Chat 1 of 5: Why Restaurants Need to Invest in Their Most Valuable Asset – Their People
Best Served Fresh episode discussing the Paragon Pillars
Additional resources related to the topics of this article are provided as food for thought and not as specific endorsements of the authors or contents of the links:
Restaurant Employee Mental Health
· Food service workers on the brink
Restaurant Pay Models
· Equal Pay / Entire hourly team in tip pool
Cooperative purchasing for restaurants
· Group purchasing organizations
· Hive VOC
Minimum wage and tip credit minimum wage
· Washington State minimum wage
Andrew Parr is Best Served Creative’s “Herald of How,” AKA Chief How Officer. Understanding why we do what we do and who we serve, Andrew digs into the nuts and bolts of how we get it done. He craves one-on-one interactions and thrives with the written word. The ability to contribute to our Read channel by penning articles covering a variety of subject matter and running down rabbit holes for research quenches his desire to learn.
Andrew has over 25 years of restaurant and hospitality industry experience and his education includes a BA in Psychology and History from the University of Wisconsin along with a JD from Mitchell Hamline School of Law. Andrew was born and raised in Milwaukee, WI, and currently resides in Denver with his wife Jody and their dog Cooper.
