New Restaurant Payroll Tactics and Tools For Building a Talented, Loyal Staff

New Restaurant Payroll Tactics and Tools For Building a Talented, Loyal Staff
Nico Simko

By Nico Simko

Locked down, bored, and restless, diners are now flocking to eat out.

To adequately prep for service, short-staffed food and drink establishments are cooking up new ways to lure workers back to restaurants, like higher wages and handsome referral fees.

But many staffers are interested in quality-of-life enhancements, opting for employers that offer pot sweeteners like on-demand pay. It's a perk 4 out of 5 workers want. Instead of waiting 7-14 days for payday, hourly workers can instantly withdraw the day's wages after clocking out.

Busy restaurant owners looking to bolster their incentive offering know that the last thing they need is another wrench in their bustling operations. Bemoaning payroll as not only a drain on time, restaurateurs view it as a siphon on their mental energy — something in limited supply, but much needed to keep things running smoothly. Enter 7shifts, a scheduling and team management app that simplifies the payday processes that typically run restaurateurs ragged. With 7shifts and on-demand pay provider Clair, adding this much-needed perk is a breeze.

How do restaurants typically pay their workers?

Any owner or manager running payroll manually understands the complexity faced each pay period. They need to calculate gross wages and withholding, divvy tips, and pay out taxes and benefits. Every state has its own regulations, but most restaurants pay on one of three schedules: weekly, bi-weekly, or monthly.

Weekly Pay

Weekly pay is the most popular for hourly workers like restaurant staff. Team members appreciate fast access to their paychecks. The downsides fall on management—weekly pay dramatically increases paperwork and admin time.

Bi-Weekly Pay

A bi-weekly pay structure can put the pressure on monthly accounting, since months are not always a consistent four-week block. But waiting two weeks to access pay can stretch employees thin, forcing them to use financially damaging payday loans or traditional lines of credit to get by.

Monthly Pay

Monthly pay is a headache for workers, and many states bar the practice. It's less labor intensive when it comes to admin work, but waiting 30 days between paychecks can put many team members in a tight spot.

How these outdated pay cycles negatively affect hourly restaurant workers

Wellness practitioners say “money problems become an everything problem,” and financial distractions trickle down to the restaurant floor. Team members who are stressed over money troubles are 50% more likely to be involved in a workplace accident.

When strapped for cash, workers turn to fast solutions that do more harm than good. These quick fixes leave them stuck in a cycle that, long term, hurts them financially:

  • Overdraft charges: When money is tight, many households rely on their bank to pick up the difference. But this favor comes at a cost. One study revealed that 43% of vulnerable households accumulated 9.6 overdraft fees in 2020, totaling a $200+ tab in fees alone.
  • High-interest payday loans: Payday lenders aren't a problem that borrowers can “leave at home.” Workers can often rack up fees that add up to 20 hours of work before taxes — an insurmountable debt for cash-strapped staff.
  • Borrow from friends or family: During the pandemic, 31% of hard-pressed workers received monetary support from others. It's a notoriously awkward situation that quickly covers a bout of bills but needles at relationships.

With 80% of workers living paycheck to paycheck, locking funds behind a two-week pay period is no longer an option.

Now, things are changing.

On-demand pay: A new way to pay restaurant staff

An alternative to the weekly, bi-weekly, and monthly pay cycles, on-demand pay has emerged as a saving grace for the restaurant workforce.

Instead of waiting one or two weeks to access wages, employees can receive an immediate payout post-shift. The funds are immediately available so they can fuel up their vehicle, pay for childcare, or stock up their refrigerator.

The transition away from long pay cycles is a breath of fresh air. Not only does it reduce financial stress, but on demand pay also builds a more loyal, focused, and dependable workforce.

It's a new perk restaurateurs can use to support their staff and become more than an employer—an empowerer of a better quality of life. Here's how.

Improve employee satisfaction

Immediate access to wages shifts one's mindset from scarcity to abundance. Servers that don't feel weighed down by financial distractions are more likely to provide outstanding customer experience that keeps diners coming back (and racks up those much-needed five-star online reviews).

Additionally, companies that focus on their employee's financial well-being enjoy a 15% jump in employee satisfaction. When people love where they work, they're likely to stick around.

Boost employee performance

Financial stressors aren't a light bother to shake off easily. They weigh on workers day in and day out, topping the list of workplace distractions that hamper productivity. Dining establishments that offer in-demand pay report an 86% increase in job performance. By providing tools that reduce financial burdens, restaurant operators can cultivate a more focused, flourishing team.

Drive higher retention rates

In one poll, three out of four workers said on-demand pay would increase loyalty to their employer. A report by the Center for Hospitality Research shows that turnover is a headache to source new applicants and costs eateries $5,864 per employee. On-demand pay is a boon for restaurateurs that struggle with costly turnover. Instead of constantly searching for a higher-paying job, employees are happier to stay put when they're able to receive a payout upon clock-out.

How 7shifts serves up the most in-demand payroll features for the hospitality industry

Trusted by more than 18,000 restaurants from quick-service chains to swanky hospitality groups, 7shifts is the go-to team management and scheduling tool for restaurant pros.

7shifts can do the heavy lifting of running the underlying processes of your restaurant. The platform's drag-and-drop schedule builder makes it easy to schedule hours, calculate pay, split up tips, and better help waitstaff trade shifts. Saving managers 5-10 weekly hours in admin tasks, 7shifts offers the most in-demand tools that conserve time and sanity.

Streamline scheduling

Maybe developing shift schedules is one of the biggest headaches for you and your management team. With 7shifts, you can create next week's schedule in mere minutes. The platform eliminates all the guesswork by accounting for your team's availability, time-off, state-regulated breaks, and more. Staff gets automatically notified by text, email, and app notification whenever you make a schedule change.

Just starting out? Easily see how your schedule matches up with industry recommendations. 7shifts unlocks valuable insights, signaling when there are too many or too few team members on the schedule.

7shifts Restaurant Scheduling Dashboard
7shifts Scheduling Dashboard and Software

Perfect tip pooling

For managers, calculating tips is one of the most time-consuming tasks when payday comes around. 7shifts makes it simple with easy-to-use tip pooling software. Restaurants using 7shifts report saving up to eight hours per week in tip-related admin time.

Whether you divide tips evenly, among the number of hours worked, or based on rooms and roles, 7shifts grants you unlimited configurations for allocating tip payouts. Plus, once you connect the platform to your POS, 7shifts will do the math for you, consolidating all of your reporting into one place.

Tip Polling Software by 7shifts
Tip Pooling Software Example by 7shifts

Dish out on-demand pay

New to the toolbox of shift-simplifying features is Payday Wallet from Clair.

After clocking out for the day, chefs, waitstaff, and bartenders can instantly advance their earned wages using Clair's Payday Wallet. Instead of returning home to an empty fridge or skipping on paying a utility, they can take care of those bills immediately.

How does it work? Upon clocking out, 7shifts automatically calculates the day's earnings. With a quick tap on the “Get Paid Early” button in the app, employees can decide how much they'd like to withdraw from the available balance. There are no fees to get paid early, so earnings are available for instant access if unexpected expenses pop up, or an important bill is due a few days before the next payday.

Clair's Payday Wallet slots right into the powerful 7shifts ecosystem to automatically calculate the day's wages, while socking away the right data for tax purposes. It reduces admin headaches for managers and boosts financial security for staff, making it an easy win-win for attracting and retaining a top-quality team.

7shifts mobile app with Clair integration for payments.
7shifts Mobile App: Get Paid With Clair

Provide innovative payment options for your employees

Innovative strides in HR tech are helping employers support and nurture their staff in generous new ways. Perks like on-demand pay ease the minds of financially strained employees and help foster a more productive, focused, and loyal workforce. By quashing the struggles of the traditional one to two-week pay cycle, restaurateurs can help their team live a more prosperous life, elevating happier employees eager to stick around for the long haul.

Start using 7shifts today

7shifts is the all-in-one labor platform built for restaurants to simplify employee scheduling and labor management. Easily manage your teams’ schedules, timesheets, communication, tasks, tips and more– all in one place with 7shifts.

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Nico Simko
Nico Simko

Nico Simko is the CEO and Co-Founder of Clair, a New York-based fintech company that is breaking the paycheck-to-paycheck cycle by offering fee-free on-demand pay access to America's workforce.