Why Underpaying Restaurant Employees is a Recipe for Disaster

Develop a relationship with your people and they will be hard working, loyal, and trustworthy.

May 15, 2023 Monte Silva

Editor's note: This is the first article in a new column from restaurant expert Monte Silva. More on the series can be found here.

Do you think of your people as a means to an end? I used to. Early in my career I ran through people because completing the task was more important than leading and developing my people. Fortunately, I learned from my dumb mistakes pretty quickly and then really shifted my perspective.

Today, I want to share a very important thing I learned. This shift changed the way I led people and managed restaurants and I owe ALL of my success to rethinking this concept.

Your people are humans with emotions, strengths, weaknesses, and personalities. They are not just a number or a cog on a wheel. But we often think of them as a number. We think of them as labor (a negative liability on our P&L). I used to do that.

When I thought of them as a liability, I paid them as little as possible. This showed my people that I didn’t value them. Everyone wants to feel valued and validated. I had to learn this and then rid myself of the false belief that restaurateurs clung to for 50 years …

False Belief: Underpaying Your People Equals Profits.

But when I looked at my people as an investment rather than a liability? I looked at them as an asset on a balance sheet instead of a liability on the P&L.

New Belief: Your People are an Asset

Let me illustrate this point. What if you hired a general manager at $100,000 a year and that GM shows you five things you can do to save $150,000 a year? Instead of looking at the $100,000 salary as a liability on a P&L, what if you thought of the GM as an asset that gave you a 50 percent return on your investment? You would probably pop the champagne or pour some Pappy 23 year if any other paper investment paid you a 50 percent return.

Because of this false belief, most restaurant managers and owners not only don’t pay their people a fair wage, but they also don’t properly train their people. If restaurateurs thought of their employees as an asset, they would look at training as an investment in the growth of their asset as well as the growth of the restaurant.

Instead, they try to spend as little as possible training them. Then, they wonder why that employee doesn’t know the menu, doesn’t follow steps of service, etc. And worse yet, they don’t stick around because they weren’t set up for success.

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Don’t under pay your people to lower the liability. Think of them as the asset they are. Invest in them. Develop them. Appreciate them. Chances are, when you pay and treat them that way, they will continue to out-perform and surprise you with amazing returns and you will begin to build a bigger pie.

It’s important to focus on the relationship. This helps you think of them as a human and not just a number. As I wrote earlier, people have emotions, strengths, and weaknesses. We sometimes don’t know what is going on with them outside the restaurant. There might be something that might be affecting their time in the restaurant.

Once, I had a busser working with me. He was fantastic. He had a great attitude. He did a fantastic job. Everyone loved him. Then, all of a sudden, things were different. He was sluggish. He lashed out at the servers and other staff. He was negative.

I sat him down and asked him what was going on in his life. He broke down and told me that he was a senior in high school, and he was flunking math. He went on to tell me that if he didn’t pass math he was going to have to repeat the 12th grade.

I told him to bring his books in every Tuesday night and that I would tutor him after work on Tuesdays. He went on to being a great busser again. But, more importantly, he finished high school on time.

Be kind to your people. Show them empathy when they need it. Develop a relationship with your people and they will be hard working, loyal, and trustworthy. Pay them well. Invest in their training. If you do these things, you will see amazing results.

Here is a quick recap of five things you can do to prioritize your people.