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Here’s A Tip

Here’s A Tip

Food preparers and servers are the worst paid of any professional group, averaging about $25,000 per year. Some employees who work for tips earn a base pay as little as $2.50 per hour (source: New York Times). There are large dislocations and relocations occurring in labor post-pandemic, and the main challenge I see around this issue is how the restaurant industry is going to react. Many restaurants are operating at lower capacities not because of restrictions but because of understaffing. Forced to consider their prospects, many of the former workers are opting for more secure positions with better pay, health benefits, and retirement packages.

I doubt an option is to hire inferior help willing to work for lousy pay. If you’re consulting with the restaurant business, it’s time to be aggressively disruptive and change the model. The few examples of “no tipping” and higher wages at major restaurants I’ve read about have failed. Someone with some innovation and energy could change this sector for the better.

In Boston alone, about a quarter of the restaurants have closed for good.

Think about this the next time you get your check and are filling in the tip.

Written by

Alan Weiss is a consultant, speaker, and author of over 60 books. His consulting firm, Summit Consulting Group, Inc., has attracted clients from over 500 leading organizations around the world.

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