Why let your staff keep their tips
Tips have ordinarily found the pocket of servers the world around. Traditionally on lower wages, hospitality staff supplement their basic wages with the tips that they earn in a shift.
Many restaurants, bars, cafes and hotels take a slice of the tips their servers earn, however. This prompted a legislation change in the UK at the backend of 2019 – which is still awaiting ratification.
Letting staff keep their tips
Unemployment and uncertainty in the hospitality sector in 2020 has influenced wages, tips, customers and their likelihood of tipping. The pandemic has also affected business, and tips may well be a useful end of month bonus.
To counteract any argument, we have outlined five benefits of letting your staff keep their tips:
Waiting staff, bartenders and other hospitality staff are often working for an hourly rate. While it may be a good amount per hour, servers face a number of challenges, such as:
– Not being offered enough hours
– Needing to work two jobs to supplement their wages
– Having to compete with other staff members for the best hours
If a company is willing to take away their tips from this equation, it causes an additional problem for their monthly finances.
Tips earned in the UK are not added to the hourly rate of a worker. Despite the tips being taxed, staff can still come away with more to support their families live well each month.
One of the biggest challenges facing any hospitality business is staff retention. It was reported in 2018 that three in ten UK hospitality employees leave their job within the first year of their start date. This mind-boggling statistic needs to be helped in any way possible.
Tips represent a key point of contention for staff in bars, pubs, cafes and restaurants. Staff may feel that tips go to undeserved parties when split evenly, or that the company is greedy taking a slice of the money. This is never going to help the myriad problems that exist in every HR department. A tipping system that works fairly for all staff will, fingers crossed, mean better staff retention is achieved.
Staff motivation to work:
Waking up in the morning or leaving the house for the evening to go to work is never easy. Hospitality staff often working unsociable hours to cater and serve people, so motivation quickly becomes a vital aspect of their work.
While it comes down to many different aspects, tipping can become a vital reason for your team to stay motivated. Adding incentives to their role in your business will boost motivation, and tipping is a great incentive that already exists.
Tips given to those who earned them:
Not every penny earned by tips is necessarily to do with a particular server. It depends on many factors, but, in general, servers earn more in tips by merit. Friendly, happy and helpful staff are more likely to earn a big tip. It is unfair on those that go the extra mile to exclude them from tips or split them equally.
By letting your staff keep their tips, they are more inclined to do everything for their customers. This ethos translates into good business and removes another bone of contention for staff members.
Customers prefer giving tips to staff members:
In a similar vein as tips going to those who earn them, customers have a place in this. We have all tipped in different varieties. It might depend on how much change we have, the quality of the service or even the atmosphere within the cafe, restaurant or hotel.
As a general rule, customers are more likely to part with more cash to those that impress them. An outstanding, helpful and friendly service will earn more in tips than a service that is sub-standard and unimpressive.
Motivation to earn tips equals offering your customers a better service – even if that is a subconscious reaction.
Legal Responsibility in the UK:
In response to growing concerns about the tips that businesses across the UK were taking, the Employment (Allocation of Tips) Bill was announced in the Queen’s Speech on 14 October 2019.
Despite the global pandemic halting the next readings of the bill, businesses will soon have to allocate their tips in a fairer way – meaning more tips will find the pockets of servers and staff members.
The government in the UK has set out a Code of Best Practice for tips. Despite being voluntary, it is in place to help ensure that tips are handled fairly. Considerations include:
– How are tips distributed?
– Are cash and card tips treated differently?
– What deductions are in place for tips?
– What happens during annual or sick leave?
These factors may well encourage businesses to think differently about tips, but until the Bill is passed in the future, employers do not have a legal responsibility to fairly distribute their tips.
Why should your staff keep their tips?
Motivation, staff happiness, staff turnover and morale are all impacted by tips. If you can influence these elements through your policy on tipping, it’s the easiest thing you will ever change in your business.
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