How many times have you watched a server walk out of your restaurant in search of greener pastures and bigger tips? It’s sad, but it happens in every restaurant — knowing the industry and its difficulties, it’s easy to see why.
Being a server can be as grueling as it is rewarding. Servers walk miles back and forth across the restaurant every day while balancing trays, connecting with guests, delivering food, cleaning up spills, placating screaming babies, remembering allergies, rolling silverware, shining wine glasses, and keeping the manager in the loop about issues. This is all done while keeping bright, guest-friendly smiles on their faces.
It’s... kind of a lot.
Like many other positions in the restaurant industry, servers have a high turnover rate for many reasons. Even servers with minimal experience know they can get another job at another restaurant with no problem, maybe even the day after quitting.
If they’re not getting along with a manager or they’re sick of serving a particular clientele, what’s to keep them from walking and finding another job that could put more money in their pocket?
“If I do a better job, I'll make more money. If I try a little bit harder, there’s no ceiling for me. I can find a better restaurant to work at and keep moving up as much as I want to,” says Gabrielle Grant, who worked in the restaurant industry, both front and back of house, for over 10 years. “As a server, I'm in control of that. When you’re doing well, it’s really awesome.”
Bringing new ideas into an old system
For more than a century, restaurants have relied on the tipping system and a hierarchical employee structure to keep the doors open and food on customers’ tables. It’s one of the only industries where employers rely almost entirely on guests to pay half their staff’s wages.
With such thin profits in such a tricky industry, many restaurateurs have understandably been nervous to try out alternative ways — like open-book management and going gratuity-free — of running their restaurants. Diners have also expressed that although they support restaurant staff getting paid more, they still struggle with higher menu prices, which is one of the most common ways for restaurants to increase wages.
There are a lot of ways to make your restaurant a rewarding place to work. Some restaurant management models require an overhaul of the books, but others can be tried and tested before taking the plunge.
In this article, you’ll hear from real servers about why outside-the-box management and business models keep them clocking in day after day.
Explore open-book management
Mei Mei, a Chinese-American restaurant in Boston, MA, runs on an open-book management model, meaning that managers and owners share the details of the restaurant’s finances — like profit and loss statements — with their whole staff.
The theory is that keeping an open book empowers staff to realize that their actions — and their choice to work as efficiently as possible — have a real impact on the business. Like many other open-book management operations, Mei Mei also has a revenue- or profit-sharing program as a way to incentivize employees to make changes to increase profit for the business.
Aidan Dunbar, a server at Mei Mei, said in a blog post on Mei Mei’s website that he appreciates how management is “open and transparent about how things are done, and showing me the whole picture, which makes everything just much clearer.” He also likes working “at the kind of place that would invest in its employees.”
In Somerville, MA’s Union Square, Juliet Restaurant also runs on a profit-sharing and open-book management model. They’ve also been gratuity-free since opening. Server Sam Mangino says it’s empowering “to talk about periods and overhead and cost of goods and labor costs.” She added that “to know not only what those numbers are but what they mean is really huge.”
“We have a lot of people who are working at Juliet who don't necessarily want to work in restaurants long-term, but they're there because they can learn about the numbers, they can learn about our business model, and they can learn how to run a business,” she continued.
We have a lot of people who are working at Juliet who don't necessarily want to work in restaurants long-term, but they're there because they can learn about the numbers, they can learn about our business model, and they can learn how to run a business.
Heather D., a server who has been in the industry for fifteen years, has never experienced open-book management in a restaurant. “The only [financial] insights the companies I’ve worked for have given are goals in sales and whether we met them or not,“ she said.
She continued, “At the last restaurant I worked at, the general manager was pretty open with the employees about how expensive it was going to be to put in new flooring, new blinds, and new booths, but not much other insight was given on profits, cost of goods, and expenses. Occasionally we’d be told about the price of certain food items to stress the value and to help us sell them.“
Open-book management is effective, but it’s not all roses. Transitioning your restaurant to an open-book model takes time and asks for deep dedication from both leadership and employees. You have to be willing to pull yourself away from the day-to-day crises in order to prop it up and make it start working for you.
Irene Li of Mei Mei on Open-Book Management and More
Open-book management empowers restaurant employees through financial transparency and visibility into how each employee contributes to the business.
Addiction in the Restaurant Industry
Build Community Advocacy Into Your Business Model
Hannah Foster is a server at The Roost, a Longmont, CO restaurant with a specific mission. It was started by Sean and Rebecca Gafner as a way to support their nonprofit organization, The Rooster Party, that funds adoptions.
10% of all gross sales at the restaurant go towards supporting adoptions in their local community — there’s even an adoption funding request form on their website.
Since the restaurant uses a POS that tracks sales data, Foster actually gets to see how much of the restaurant’s revenue is going back to the community and how small transactions add up. “A lot of people come in specifically because they are giving back to the community, so that's pretty cool,” she said.
Working for a restaurant that’s built on a larger sense of community-driven purpose keeps servers happy and dedicated to their jobs.
Don’t Cut Servers on Slow Days
In most restaurants, a slow shift means cutting servers, which puts servers in a weird position. Imagine having to get ready and come into work, only to arrive and be asked to leave, without making much (if any) money for your troubles.
Not a great feeling for servers, but we get why cutting servers has become the norm.
It can be expensive to keep servers “on” if it’s a slow night and there aren’t enough customers to warrant them being there. You’re also legally required to pay the non-tipped minimum wage to these employees.
But at Juliet, they use a “no forced cuts” policy, and they’ve seen success with their servers.
Mangino explained, “We always have the option of whether or not we want the night off. We're never told we're going to get cut. So if we have a really slow night, the option is we're going to do a lot of cleaning or one of you can take the night off – and there are some days where I'm like, ‘I'm so tired. I do want this night off.’ So at least if I'm not getting a day’s worth of pay, I get to make that choice on my own.”
New staff management models, like profit-sharing and open-book management, could make your team a whole lot happier.
Understand the pros and cons of going tip-free
The idea of eliminating tips doesn’t appeal to many servers. While tips make for a somewhat unstable income, servers can rake in the dough. Former server — and current Toast employee — Amanda McNamara recalls walking out of a shift at a family-friendly sports bar with over $1,000 in cash on a game day.
When she was a server, Gabrielle Grant thrived on the energy of the chase. She told us that when she worked for tips, her only job was to make sure every customer was happy. If she did a great job, she received instant recognition for it. “Servers and bartenders know what they’re getting themselves into. They chose this job. If I sign up for a job knowing how I’ll make money, that’s on me,” she said.
In DC, where Gabrielle is from, there was a 2018 ballot initiative to phase out the tipped minimum wage, called Initiative 77. She says her local restaurant community was largely against it. “You would be walking down 14th Street, which is a super busy street for restaurants, and it was all 'vote no, vote no.'”
Hannah Foster of The Roost doesn’t feel particularly strong about the idea of working in a gratuity-free restaurant, especially if the hourly wage is already good. “I guess it probably wouldn’t be that bad, but I just don't know of any places that do that. Especially here in Colorado,” she said.
Zoë Carlton was a server for two years, and she said she would only consider working in a gratuity-free environment “if the wage matched the tips [she] made.“ She’s left the industry, but it wasn't because of what it felt like to work for tips, she explained. It was more due to the industry’s drinking culture.
Amanda McNamara says that long-time servers have honed the craft of earning money through tips, and they may not want to risk giving that up. “People who are career front of house are absolutely amazing when it comes to showing genuine hospitality and getting their tips as a reward,” she said.
However, Amanda does see the benefit of going tip-free. If one of the restaurants she worked at announced they were overhauling the system and eliminating tips, she said she’d stay to see it rolled out. “I would have just been very curious because most restaurants don't do that. I think it’s very revolutionary, and I think it's a shift in thinking from short-term gain to long-term gain,”
She continued, “The way the tipping structure now exists, it's all about short-term gain. You work hard, you get your money right now. Whereas a salaried or hourly structure with benefits gives you more of a long-term gain. A paycheck may be coming in a week and a half [rather than on the same day], but you’ll also be able to make that go further. And the same goes for benefits: They may not come into play right now, but they do when you're sick, they do when your car breaks down, or when your kid gets sick.”
The way the tipping structure now exists, it's all about short-term gain. You work hard, you get your money right now. Whereas a salaried or hourly structure with benefits gives you more of a long-term gain. A paycheck may be coming in a week and a half [rather than on the same day], but you’ll also be able to make that go further. And the same goes for benefits: They may not come into play right now, but they do when you're sick, they do when your car breaks down, or when your kid gets sick.
Katie Rosengren is a general manager at Juliet. While she used to work as a server in tipped restaurants, she came to realize the flaws and instability in the system over the years. She says, “You could have an off day, you could really mess up a table, or you could feel like you really did a bad job and someone will still tip you 20%, which is great and wonderful. Or you could be so on, do every single thing right and have done a perfect job by the book, and still get a 12% tip because it really doesn't matter.
She explained that, from her perspective, a gratuity-free environment actually pushes servers to provide better guest service — as counterintuitive as that may seem. “[In a tipped environment,] there isn't really an incentive to do a better job. When you’re paid well by your employer, are incentivized to do a good job because of profit-sharing, and are promoted for your hard work, it’s such a better and healthier environment to work in.”
“People know what they think is fair to tip, and that's what they're going to tip regardless of what you do. And when you realize that as a server, it's pretty defeating actually.”
Her servers agree. Sam Mangino says that tipping incentivizes servers to be more hospitable to tables that might be spending more money. But at Juliet, every guest gets the same level of hospitality.
People know what they think is fair to tip, and that's what they're going to tip regardless of what you do. And when you realize that as a server, it's pretty defeating actually.
“At Juliet, our owners and the management team are really, really clear about what our hospitality standards are. You go to every table and provide them with that level of Juliet hospitality — no matter who they are or how much money they're spending. When I go to a table at brunch where someone is having a $20 meal versus someone who's coming for our three- or five-course meal, I go to that table with the same level of hospitality. Because tips don’t come into play.”
Mangino added that the front- and back-of-house divide is nonexistent at Juliet because of the lack of tipping. “I will say our dynamic between front of house and back of house, at Juliet, since none of us are working for tips, feels a lot more equal than what I’ve experienced in the past.”
Share Profits With Your Team
Profit-sharing (also known as revenue-sharing) is a great way to give non-tipped workers a little financial boost whenever the restaurant is doing well. It can incentivize your team to work toward the success of the business and take stronger ownership of their work.
At Juliet, profit-sharing is distributed among staff four times a year. Mangino told us, “There’s a benchmark number for profiting, and as long as we show that we're on track for that well within the first quarter, we start getting the payouts incrementally throughout the year. How it worked last year is, after the first quarter, we got 10% [of the profit sharing pool], and then after the second quarter we got 20%, 30% in the third quarter, and so on like that. This way it doesn’t leave you waiting until the end of the year to get your full profit-sharing check. It comes incrementally throughout the year.”
She said it was nice to get a bigger paycheck every once in a while on top of having the benefit of always knowing how much she’ll make in a week — thanks to her hourly wage and not relying on tips.
There are many ways to do profit-sharing, but what Mei Mei has done is set short-term challenges for the team to take on, with a corresponding reward. One challenge involved asking the staff to think of ways to cut down on COGS (Cost of Goods Sold) for four weeks — and all the money that was saved due to any ideas and changes the team implemented was given back to the staff.
When you’re steering a restaurant from the helm, it’s scary to stray off the beaten path. There are risks involved, no doubt. But implementing new management and business models can work wonders on your servers and the rest of your staff if the model is right.
If you had the chance to keep your team happy, encourage them to work harder together, and decrease staff turnover — all while providing an outstanding dining experience — would you give it a shot? While the ideas and management models shared above might not be a good fit for your restaurant, chances are you have other creative, outside-the-box ideas waiting to be explored.