Canadian HR Reporter

CANADIAN HR REPORTER September 19, 2016 FEATURES 31 METRO TORONTO CONVENTION CENTRE Register Today For 140+ learning sessions; 8 inspiring keynotes; 200+ trade show exhibitors; 20 industry panel discussions; 2500+ delegates & peers. Canada's Premier Human Resources Conference Save $275! Register By Oct 16, 2016 hrpa.ca/AC2017 #HRPA2017 Career management Managers can have diffi culty pro- moting servers to salaried posi- tions because of the possibility of earning tips as servers, says Mc- Adams, which makes succession planning and leadership develop- ment extremely diffi cult for res- taurant owners and operators. "It's incredibly diffi cult to fi nd restaurant managers because people would rather work as serv- ers — they make more money and they work less hours," he says. Managers may look out on the fl oor and say there are six good people who could become lead- ers, says McAdams, but the peo- ple will decline, saying, "'Instead of working 30 hours and having fl exibility and making very good money, I'll have to work twice as long and make less money' so there's really no motivation for people to move up the ranks, so there's also a real shortage of qual- ity restaurant managers." And in the kitchen, low wages make it diffi cult for employers to retain chefs who are keen for bet- ter hours and better pay. " is is actually the tragic part is you have higher enrolment in culinary schools now, colleges for the most part, than ever before… and they take a one- or two-year course in culinary, they come out and they're making $12.50, $13 per hour. Two years later, they're making $13.50 an hour and they realize pretty quickly there is no future, there's no living wage there," he says. " at is a very, very common problem that is actually at the cri- sis level, I think." The ability to earn tips also appears to attract transient staff keen on the prospect of quick, easy money, says McAdams. "We're at the point now where we can say tipping is the lead cause of the transient nature of the full-service restaurant business in North America. "In North America, we have this huge turnover in our kitch- ens because of low wages, we have huge turnover in the server posi- tion because a high percentage of servers are what I call mercenary servers — they come into the in- dustry because serving is quick cash and 'I need to pay off my stu- dent loan.'" Possible solutions About 20 years ago, restaurants started saying managers should be better paid by receiving a share of tips as servers were taking an in- equitable amount of the wage pile. But that led to animosity as often the managers worked behind the scenes while servers were busy on the fl oor. "Honest to God, it creates this organizational chaos and it was amazing to us how much time that managers told us they actu- ally had to spend over solving is- sues and clearing things up and sorting things out and confl ict management because of this prac- tice of tipping that could, for the most part, be alleviated if we went to a non-tipping system and paid people wages," says McAdams. That's one possible solution, which would see, for example, a 15 per cent increase to menu items and a no-tip policy. But the prob- lem there is "sticker shock," says McAdams, as restaurant owners worry customers will go to the competition if they have lower prices (and tipping). And a 15-per-cent service charge to the bill, with no tips, means customers often resent having to pay a fixed service charge and not having the fl ex- ibility to tip at their own rate. But restaurants could pay higher hourly wages for all staff . Servers would then be willing to work any shift because they're compensated the same and "that gives management and ownership that 15 per cent as part of their revenue — and that works," says McAdams. Another solution is to stop rais- ing minimum wage rates for serv- ers, so "the owners would have more money to pay less hourly wage to the servers and more hourly wage to the cooks," he says. "Unfortunately, when you raise the wages of the servers, you're actually taking away the ability of owners to give more money to the cooks where it's needed and… you're giving servers more money that they really don't need, and taking away the owner's ability to pay the $16 for the cook. 'I have to pay my servers $10 an hour so I can't pay the cook $15. And they don't have control of that money.'" Fixed service charge a challenge BIG < pg. 29 Changing tips With tipping an embedded social norm, making much- needed change is a challenge, as seen in a recent survey. Forty-six per cent of Canadians prefer to stick to the traditional practice of tipping, while 40 per cent like the idea of a fi xed service charge and higher base wages, found a 2016 Angus Reid Institute survey of 1,505 adults: "The no-tip compensation model has been hailed in some quarters as the future of dining out: A simple solution to the unpredictability of wages for restaurant workers and a way to remove what many customers see as an obligation, rather than an optional reward for good service. But Canadians don't appear poised to overwhelmingly embrace a move to this new system, in spite of the fact that the majority see tipping as a mechanism for employers to underpay wait staff as well as others in the hospitality industry."

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