Tipping practices are in constant conversation in the restaurant industry. There have been a number of ways in which restaurant owners have tried to create a more equitable system for employees to earn consistent, fair wages to improve retention. Attempts have been made to eliminate tipping altogether, but many restaurants ended up reverting back to a traditional tipping system.
Tip pooling is another way that restaurants have changed up the system to make it fairer for everyone involved. It also eliminates some of the downsides of tipping like inconsistent wages, an emphasis on “good tables,” and an individual mentality among serving staff.
What is tip pooling?
Tip pooling is a tip distribution method where the tip amount from each customer's bill is gathered and distributed to supporting roles. This includes servers, hosts, bartenders, bussers, or anyone who provides any service that can be tipped by customers like coat check attendants. It can even extend to the back of the house, so cooks, dishwashers, and porters can get tipped oit. With tipping numbers up across the board, now is a good time to think about how you can distribute them to your team more fairly.
A traditional tip pooling worksheet from restaurantowner.com
“Tips are a huge part of restaurant compensation and tip pooling is often so complex it becomes a part-time job worth of work for managers. By transforming the tip pooling process from hours of manual report generation and calculations each day to the click of a button, we've freed up our customer's time to focus on other parts of their business,” says Riz Jiwan, 7shifts' VP of Product.
What are the benefits of tip pooling for restaurant teams?
More equitable wages
Tip pooling can help create more equal wages across the board for your entire staff, especially if your tip pool extends to the back of the house. This makes sure that your team is being tipped out equally, regardless of shift or the type of work they're doing. Equitable wages are also a great way to stand out in a tough hiring market. Team members feel more valued and stick around longer.
A rising tide lifts all ships, so when everyone's tips are not paid out just for their work, teamwork will be encouraged. This can also help team morale, and have a positive impact on the health of your restaurant.
No “bad tables”
When tips are split fairly, infighting among your team over tables and sections will fall by the wayside. They'll also be less inclined to neglect side work in favor of taking on tables, making your restaurant run more efficiently.
Tip Pooling Software Example by 7shifts
Tip pooling and distribution simplified with 7shifts
Tip pooling can help your team get paid more fairly, increase teamwork and morale, and help your restaurant run smoothly. But implementing a tip pool can be a hefty task-with so many rules, data from different places, and calculations to be made. Restaurant managers can spend up to 8 hours a week calculating tips with traditional methods. Those who use 7shifts can turn those hours into minutes. Here's how:
Create custom tip pools that fit your teams' needs
Create as many tip pools as your restaurant needs with a simple rule creator that helps you create pools in under a minute. You can customize your tip-sharing and pooling to fit your restaurant's needs and make adjustments at any time. 7shifts' Tip Pooling software makes sure you're in control of where the tips are coming from, which roles contribute to or receive from the pool, and how that distribution is calculated.
Save time with automated tip calculations
A lot of the work of running a tip pool comes from manually adding data from your POS. With 7shifts Tip Pooling software, tip data is automatically synced from supported POS integrations, or through 7shifts integrated time-clocking app 7punches. Once collected, tip calculations are then automatically made to reduce costly errors and sent to supported Payroll providers via integration or export.
Reduce errors with payroll integrations
With all your calculations done for you, you can eliminate costly human error that causes headaches when running payroll. Once it's calculated, you can export and send it directly to your payroll provider for payout. Better yet, it will instill confidence in your team that they're being paid accurately.
Ready to save up to 8 hours a week on tip pooling with 7shifts team management platform? Book a demo today
How Canadian Bakin' is streamlining tip payouts with 7shifts new tools
At Canadian Bakin' in Huntsville, AL, owner Daniela Perallon instituted a tip pool to create pay equity amongst her team. While pleased with the results, she was unhappy with the amount of time it took her each week-and the chance for error with manual and spreadsheet calculations.
“Before it was a time-consuming, stressful, and unnecessary task, so the tip pool [feature] has saved time and mental energy. As a business owner, it's mostly the mental energy you're using.”
Now, Perallon uses 7shifts Tip Pooling tools to help manage her team's tips, saving time that she can invest back into growing her business.
“For me, it's freed up more time to focus on specials for the menu, marketing, customer outreach, All these different things to have more time and energy to focus on because tip pool is [taken care of].”
Perallon was able to separate some team members who work at Canadian Bakin's local farmers' market stall, as they collect their own cash tips. This unique aspect of their business gets managed seamlessly, taking away the chance for human error.
“[The team] is getting assurance that calculation, there's one less step where user error can occur. I could type in hours incorrectly or forget to take hours out, which happened a couple of times. It takes away my user error because 7shifts is doing all the work for us.”
Ready to save up to 8 hours a week on tip pooling with 7shifts team management platform? Book a demo 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.
Start FREE Trial.