Bridging the Gap: Traditional Benefits on the Rise in Restaurants

This post is adapted from our “What Restaurant Employees Want” report, originally published in May 2024. Visit our page to download the full report, which features insights from 1500 active restaurant employees and industry experts.

Restaurant work and benefits have not historically been synonymous. Staff meals or post-shift drinks have traditionally been the beginning and the end of any benefits beyond paychecks or tips.

But as the restaurant industry evolves, employees demand the benefits of the traditional 9-to-5 job, such as health insurance, paid sick days, vacation, retirement accounts, and more. It’s a culture shift, but one the industry must embrace.

“Historically, benefits for small business employees have been difficult to access and afford, which is why 68 percent of the hospitality industry does not have health insurance. Even for restaurant owners who want to offer health insurance to their employees, the monthly premiums are so high compared to larger groups with more negotiating power that many employers cannot afford to make a significant contribution to their employees. This results in low opt-in rates by employees who cannot afford the high monthly premiums, and for those that do opt-in, they often experience a significant annual price increase,” says Elizabeth Tilton, Founder and CEO at Oyster Sunday.

Where the opportunities lie

As reported by real restaurant employees, we can compare the least offered benefits with those employees who say they are most interested in to determine where the biggest opportunities are.

Retirement benefits

Retirement benefits can help make restaurants a more sustainable career and support employees’ financial well-being.

Paid time off

With hourly work, taking time off can mean sacrificing take-home pay. Losing even a day’s wages discourages employees from taking time off, increasing their risk of burnout. “We can’t underestimate what the power of personal time and a consistent schedule can offer our teams. Time and time again, we see this as a key benefit employers can offer their teams,” says Tilton.

Creative benefits offerings

Once the basics are covered, restaurants can get creative with their staff’s benefits and find ways to keep them happy and engaged. When Dan SImpson, CEO of Taziki’s, joined us on the Pre-Shift in 2021, he outlined how his team decides what benefits to offer.

“Correct diagnosis is key if you want the right remedy. Here’s where there’s a bit of a gift that we all have in our organizations….we go to great lanes to deploy all this technology for customer segmentation, and all this analysis to figure out exactly who they are and what makes them tick. What if we take the same discipline—and we apply it to our staff? Let’s start by breaking them into segments to truly understand their different values and needs and then deploy the right fix.”

In this case, the fix is in what benefits they provide. The Taziki team was able to separate their staff into three “buckets”: young millennials and Gen Z, Working Parents, and Spanish-speaking immigrants and refugees. With that in mind, Taziki can tailor benefits to what those groups need.

For the younger generation of part-time workers, this means things like real-time pay. For working parents, flexible schedules for childcare and retirement benefits for the future. And for First-Generation Americans, English language lessons. “While we see value across a variety of different languages, we know that sometimes a language barrier can be a barrier to advancement, and we don’t want that to be the case,” Simpson adds.

Take Action

Cover the basics first: Start by ensuring your employees can access essential benefits such as health insurance and retirement plans. These fundamental benefits can significantly improve job satisfaction and retention rates. Explore group health insurance plans or industry-specific associations that offer more affordable options.

Remember how important flexibility is: Flexible scheduling can be a game-changer for many employees, especially working parents and those balancing multiple jobs. Implementing flexible work hours or allowing for shift swaps can help your staff manage their personal lives better, reducing stress and increasing loyalty to your restaurant.

Don’t underestimate PTO: Paid time off prevents burnout and maintains a healthy work-life balance. Even a few paid vacation days can substantially affect employee morale and productivity. Consider offering incremental vacation days based on tenure to reward long-term staff and incentivize retention.

Get creative: Once the basic benefits are covered, think outside the box to offer unique perks that cater to your employees’ diverse needs. This could include real-time pay options, language classes, or professional development opportunities. Tailor these benefits to different employee segments to maximize their impact.