Changes are happening in real-time, though. At 22-unit bartaco, one of the brand’s early pandemic tactics was to pivot to a QR-based dine-in model. Customers join a waitlist via bartaco’s app, or call in. They receive a text their table is ready. Once there, they use a mobile device to scan a QR code where they can order and pay. The brand anchored its virtual host system with Wisely and supported the QR experience with OneDine.
Given how the nature of serving guests suddenly flipped, bartaco decided to develop a more efficient labor model. It began to pool tips. Bartaco did so for the entire restaurant, including the back of the house, and put everyone on minimum wage instead of a taxed tip wage.
Results proved compelling, CEO and cofounder Scott Lawton says. “What we found is really incredible, which is we shaved 5 or 6 [percentage] points off of our labor pre-pandemic. And our average income of our staff is [now] between $23 and $25 an hour, including our dishwashers.”
Bartaco also ran 30 percent store-level EBITDA, despite being down 20–25 percent in sales compared to 2019. In terms of broader labor changes unfurling, and those that might surface under a Biden administration, bartaco feels insulated. “I don’t want to pay a tax-tipped wage because that exposes me to all those issues,” Lawton says. “The idea is pay full minimum wage and you’re not exposed. We can manage $15 an hour under this new construct because we can run the dining room much leaner.”
Before COVID, $15 was essentially the average wage for kitchen employees at bartaco. They’re making more today. Pooling helped stem turnover, too, Lawton says, and improved the quality of cooks and other back-of-house staff.
Retention was critical before COVID, of course, but is taking on added urgency of late. According to Black Box Intelligence, the number of restaurant jobs lost due to the pandemic remained at about 2.1 million employees during October and November.
The weak labor market fueled an environment in which wage pressures softened for frontline team members in limited-service restaurants, the insights company said. Average hourly wages for limited-service frontline workers stayed flat year-over-year at the national level during Q3. Meanwhile, full-service cooks saw average hourly wages increase rapidly (as Lawton attested).
Back-of-house positions were harder to fill before the pandemic and now may require some additional pay to attract and retain the best talent.
As staffing levels were cut in full-service restaurants, those that remained were likely more seasoned and tenured cooks, which also contributed to average wages showing bigger increases.
Lawton believes this trade-off could endure after COVID.
In the front of the house at bartaco, a server’s earning potential has undeniably changed, he says. You’ve likely forfeited those busy, spike nights. “So we’re looking for staff that is more, maybe not career servers, but people who are bright, energetic folks that understand team play and are excited to make a very predictable and great income,” Lawton said.