“Great people give great service and you can only get great people by paying the right wage.” Those were the sage words of Joseph Evans, Finance Director of Oakman Inns, one half of an engaging and thought provoking panel at the Casual Dining Show last week.
Chaired by Mark Linehan, the session was entitled: Fair Pay: Are we at a tipping point? The other panellist was Harry Cragoe, owner of The Gallivant, a Three Star rated hotel restaurant in East Sussex which recently introduced a very forward thinking pay structure.
Harry explained the reasons behind his decision to introduce a minimum £9 per hour wage and to scrap service charges and tipping.
He said it’s impossible to divide tips fairly based on length of service and position. Instead he’s designed a system whereby staff are rated and assessed on a number of metrics including hitting targets, customer feedback and more. From this they’re given a monthly and quarterly bonus. At the end of each year they’re given a ‘share of the profits’. The Gallivant has a profit budget and once this is exceeded, every pound over the budget is divided equally among the staff.
“Regardless of price, the bottom line is that the service it has to be a fair exchange for the money the customer is paying,” Harry added. “Great service adds value, and so by raising wages your staff will provide a better service. Although your prices will inevitably go up, the great service can make up for it.” And if happy staff breed happy customers then it would appear that The Gallivant is halfway there, as Harry revealed that the team meeting when he announced the new regime was the first at which staff had broken into applause.
Joseph was keen to stress the imperative for the industry of creating a working environment that provides an attractive career for young people.
“One of the most important things you can do is to be positive to teenagers about the role, their role and their prospects at the business,” he added.
He did acknowledge that the Living Wage would have an impact on prices but said the precise effect was not yet known.
“We need to train, retain, promote and give a career to teens. If you offer young people the chance to learn and develop professional skills, they can quickly move out of the bottom tier jobs and progress to management positions.”
Joseph said he didn’t believe businesses should make a profit on tips left by customers, but neither should they make a loss
Mark closed the session saying: “If we don’t invest in staff then what should we invest in?”
And that should be the takeaway message for every considerate employer.