Typical business advice touts that the customer should always come first. Given that my title is hospitality director, you’d especially think that ensuring customers are having the best experience possible would always be my top priority.
And it is, but I’ve discovered a more roundabout yet incredibly powerful way of getting there: putting our employees first.
After helping open and run four restaurants over the past six years as co-founder of Destination Unknown Restaurants, I’ve found that focusing on employee happiness ultimately leads to better customer experiences and a stronger business. And while I’m speaking from the perspective of the restaurant industry, this advice applies across all small businesses.
For us, taking care of our employees primarily means ensuring they’re fairly compensated for their work. In 2020, we moved the bulk of our full-time staff from hourly pay to a salary so they no longer have to rely on tips or worry about scheduling when it comes to their income. We looked at what our highest-paid employees in each category made under a tipping system annually, then added 5% to determine their new base salary. The increase in cost for us is offset by a significant reduction in turnover and the associated training costs.
But more than the money, this move has transformed the way we relate to our employees, and the way they relate to the business. We feel invested in them and dedicated to their growth and well-being, rather than viewing them as people who could be replaced at any time like many restaurants do. They give this back to us in spades in their care for our company and customers.
Depending on the state of your business, giving your employees salaries may not be realistic, but looking for other ways to truly take care of your employees, be it through other benefits, professional development, or flexible work arrangements, will only benefit your success in the long run. Here are just a few ways we’ve seen this move improve things for our customers, for our operations, and for our morale.
It’s Built a Workplace Where Everyone is Working Toward the Same Goal
When employees feel taken care of rather than taken advantage of, it removes the “not my job” mentality and instead encourages a team environment where everyone is working to make sure every customer has a great experience.
At a standard, tip-based restaurant, servers are typically only worried about their section so they can make decent money for the day. At our restaurants, I see employees working together to make sure every guest has a positive experience. If a server has a slow section, they can help another employee out instead of stressing about their income. They run food to each others’ tables and are constantly checking guests’ faces to make sure they’re having a good time. I’ve also noticed everyone banding together to train new teammates since every person impacts the guest experience.
We’ve further incentivized this environment of working together to offer top-notch service by adding a bonus structure on top of employee salaries. Every month, our servers and bartenders are eligible for a bonus based on good reviews on Google and Yelp. If we get great press or an award like a Michelin star, there’s an additional bonus as well. This way, instead of just doing their one job well, each employee is focused on giving guests a great experience in any way they can.
It’s Helped Us Retain the Best Talent
Prioritizing employee happiness has saved us so much time and money on recruiting, hiring, and training. During a time when so many businesses are facing mass resignations and staffing challenges, we have very low turnover and have had no issues hiring.
During a time when so many businesses are facing mass resignations and staffing challenges, we have very low turnover and have had no issues hiring. – Kelly Phillips, Co-Founder of Destination Unknown Restaurants
Yes, it was stressful when we had to pull from our savings to make payroll during the pandemic lockdowns. But I was resolute that we didn’t let anyone go because I know I’m never going to find another Elmer, another Marco, or another one of the other outstanding employees who I trust deeply. Maybe I’ll find decent replacements eventually, but it’s certainly not going to be overnight, and not without a lot of work.
Longer employee retention also undoubtedly makes the business better. When people stick around for a year or more, they get to know everything there is about the position, they become more efficient, and they find ways to serve customers even better. Many of my employees are people who helped us open these restaurants, and I can’t imagine succeeding without them.
It’s Created a Relationship Where Employees Want to Reinvest in the Business
More than just retaining talent, I’ve noticed that investing in my team means they’re excited to invest back in the future of the business.
By nature of having a salary, they feel there’s potential to stay and grow here, to move up the ladder and make this role part of their career. I could see many of these people becoming managers or partners or spearheading the opening of another restaurant one day.
Obviously, this is a huge asset for us when we’re ready to grow and expand. But it’s also a huge asset now because employees are excited to work on the business rather than just work for it. For instance, I’ll notice on slow days, instead of just sitting around stressing about the lack of tips, my team will feel empowered to use the time to make small improvements around the restaurant or brainstorm new ideas. It’s exciting to have employees who want to help push the business forward, rather than just coming in and doing the bare minimum of their job.
It’s Reduced Stress to Create a Better Environment
Ultimately, I think one of the biggest ways putting our employees first has led to a better customer experience is by simply reducing the amount of stress our staff feels day to day.
When you walk into a business and the team isn’t happy, you can tell immediately. At so many tip-based restaurants in particular, servers are doing math in the middle of their shift to figure out if they can pay their bills, which takes away from their focus on the customer. Meanwhile, our staff has more peace of mind, and the guests can feel that, making them excited to come back again and again. You can see that in how our businesses are doing today: We recently had a record sales week, and Destino is one of the highest-rated restaurants in Washington, DC.
Your people really shape the identity of your business. – Kelly Phillips, Co-Founder of Destination Unknown Restaurants
Your people really shape the identity of your business. When they’re not well taken care of, that will reflect in how people feel when they interact with your business, even if it’s in unintentional or subtle ways. But when they feel prioritized, they’ll give that energy back to the customer.
This whole experience has been a powerful reminder to me that, yes, my job is to take care of customers. But, even before that, my job is to take care of my employees, because I can’t do any of this without them.