How to Hire & Retain Gen Z Restaurant Workers

Everyone is still feeling the effects of the labor shortage — and it could be that outdated hiring practices are to blame. 

Toss out all the articles you’ve read about hiring Millennials, because Gen Z is joining the workforce in droves. Born between 1997 and 2012, Gen Z (or Zoomers) can be defined by their level of comfort with tech — none of them can remember life without the internet and they probably had an iPhone before they had a car. 

Now, they’re all grown up: Gen Z will make up 27% of the workforce by 2025. And unlike your older employees, they’re much more independent, tech-minded, and financially driven. They’re your best bet at solving your labor woes, if you can meet their needs too. 

Here’s how you entice Gen Z workers to join your team (and keep them happy). 

Competitive Pay 

No huge shock here: people want to work where they can make the most money. But unlike their Millennial forebears, Gen Z employees are taking finances much more seriously. 

Gen Z is giving major side-eye to the pizza parties and free t-shirts that may have excited employees of years past. If you’ve offered these types of job “perks” in the past, you’re better off spending that money on improving wages. And who can blame them? With increasing inflation, your youngest employees need money in the bank, not another branded hat. 

Times are tough, though. If you can’t afford higher wages, get smart with how you present your pay structure — like offering more frequent (or even daily) payment. 

Offer Benefits

Now when we say Gen Z doesn’t like job perks, we aren’t talking about the serious stuff like healthcare.

Members of Gen Z are aging out of their parents’ healthcare, and they’ll look for jobs that offer healthcare and other benefits for employees. 

On top of healthcare, Gen Z employees are also looking for time off, mental health initiatives and support, and sick leave. If you can’t offer higher wages, showing your support for your staff may help you edge out the competition in the hiring game. 

Hire Their Friends

Who doesn’t want to work with their friends? In close, team-oriented environments like restaurants, people naturally hope to find camaraderie and friendship at work. So when you’re looking for new employees, look no further than your current employees’ besties. 

Pro tip: Sweeten the deal even more by offering small referral bonuses to employees who bring their friends onto the team. You’ll make your current employees feel appreciated and solve your labor shortage issues in one fell swoop. 

Work with Their Schedules 

While some young Gen Z professionals are entering the job market looking for full-time positions, most of them are still students. To get them on board with your restaurant, you might have to be flexible with their hours. 

For college students, allow them to go home during school breaks, and be conscientious of their class schedules. They’re naturally prioritizing their (expensive) education over a restaurant job, so if you can’t be understanding about finals or Christmas break, they’ll look for a job elsewhere. 

Utilize Tech 

Gen Z was the first generation to grow up with technology — and they could probably teach you a thing or two about how to use it. Since they’re accustomed to tech making their lives easier, Gen Z workers won’t be happy to see analog processes in your restaurant.

For one, ditch the printout of the weekly schedule. No one wants to come in on their day off just to see when they work next. Instead, take advantage of the many scheduling apps that are available, or bare minimum, send out the schedule in an email.  

To really impress Gen Z, offer them digital payment options — especially digital tip outs. Like we said, Zoomers don’t want to wait two weeks for their pay, and they’re more than happy to receive digital payments over cash. In the eyes of Gen Z, the only “real money” is what you have in the bank — cash is so 1996 — so when their daily tips go straight to their bank account, they feel more financially secure. 

Looking to impress Gen Z restaurant employees? Check out a demo of Kickfin to see our technology in action.

Tipflation: What Are the New Norms Around Tipping?

Look, we’re in favor of tips around here, but we can all probably agree that over the past few years, tipping has gotten…weird. (Are you already picturing the iPad?) 

Most people know and practice proper tipping etiquette at FSRs, bars, and at fast-casual restaurants. But now, you might be prompted to leave a 30% tip at a self-service restaurant. The phenomenon – aptly named “tipflation” – has many of us questioning if we need a $9 chai latte today.

So what’s the new normal? And how should customers respond to rising costs due to the expansion of tipping? 

Why are we expanding tipping? 

It’s not like there was some major event that completely changed how most of the public sees the service industry and tipping as a whole … oh right, Covid. 

In the early days of the pandemic, restaurant workers at QSRs and takeout spots were deemed essential workers, and they were genuinely risking their lives to keep working in person. Since they were at such high risk of getting sick, many of us felt compelled to leave higher tips as a huge thank-you for their work (and for saving us from another night of spaghetti at home). 

Also, the pandemic ramped up cashless and contactless payment options — resulting in the meteoric rise of tablet tip acceptance software. With almost all restaurant operations going digital, restaurant owners opted to streamline their tipping systems as well.

And of course, restaurant owners saw the trend of higher tips as a way to mitigate the effects of the labor shortage. By expanding tips to less-traditional environments, owners could promise higher wages to potential hires — even during a time when business was unpredictable. 

Online Backlash 

As tips continue to creep up, people are taking notice — and sharing their opinions online. Last summer, TikTok creators poked fun at the awkward moment in front of the iPad, while others just shared their genuine frustration with the increasing pressure to tip. Even employees shared their discomfort with the “turning the iPad” situation. 

 

@maddiemischak It’s funny because I am indeed this employee  #tips #tippingculture #icecream #serviceindustry ♬ original sound – poop

And if you go through the #tippingculture on TikTok, you’ll see a lot of videos discussing whether or not we should be tipping in all of these less-traditional scenarios. In the comments, customers share the most surprising place they’ve ever been asked to tip (like at a self-checkout) as well as past and current service industry employees reminding us that people rely on tips for their livelihoods. 

Tip Etiquette in Our New Normal 

Our main takeaway? Tipflation leaves a bad taste in your customers’ mouths — even if they leave a tip in the moment. But good news: you can implement tipping at your business without offending your guests.

Because really, tipping isn’t the problem — in fact, tipped employees are overwhelmingly in favor of tipping because it significantly increases their take-home pay beyond what normal revenue constraints would allow. (Case in point: Many of the restaurants that have tried out no-tipping policies have reversed course because employees preferred the opportunity to earn more.) Plus: customers like the opportunity to reward great service.

But there’s a way to navigate tipping in a post-pandemic world without the awkward situations and risk of alienating customers. 

Here are a few tips for new-normal tipping:

  • Set the right options on your POS: Most people are happy to leave a tip for great service — but they don’t want to double the cost of their daily coffee. Set realistic tip prompts based on your business. For example, it might make sense for a bartender with many regulars to offer higher tip options of 15%, 20%, and 30%, but at a coffee shop, consider options like $0.50, $1, or rounding up to the nearest dollar. That way, customers don’t feel frozen in their choice between an over-inflated tip amount or no tip at all.
  • Make sure your customer has an option for “custom tips”: On the customer side, we often feel rushed to click on a tip option and move out of the way, completely ignoring the “custom tip” button. But think about it: you leave custom tips all the time at full-service restaurants — what’s the big deal about doing it at a QSR or coffee shop? So if you don’t immediately see a tip amount that feels right to you: stop, take a breath, and remember the custom tip button is there for a reason.
  • Give your guests some space: We all get a little shy when leaving a tip right in front of a server or cashier — and the employee usually feels pretty awkward, too. But you can make the interaction a little more comfortable for everyone involved. Rather than waiting for the customer to fill in their tip, suggest to your employees that they step away for a second. They can go get started on the guest’s order or check in on another table while the customer fills in their tip in private.  
  • Reserve judgment: Tips are great, but they don’t define people’s worth. Rather than viewing the iPad as a barometer for your customers’ morality, see it for what it is: an opportunity for servers to boost their salary and a little incentive to go the extra mile. 

If your restaurant is expanding your gratuity options, don’t make it awkward for your customers (or employees for that matter). Be mindful of the new tipping culture so that your employees can earn more money and your customers won’t leave feeling robbed. 

And of course, make your tip distribution easier with instant digital tip-outs. Request a demo today.

What Digital Tipping Really Means: Tip Acceptance vs. Tip Distribution

Confused by digital tipping? We hear you. Get up to speed with this quick rundown so you can keep up with the ever-expanding world of restaurant tech. 

Digital tipping is an umbrella term that gets used interchangeably — but it covers a few different use cases. If you’re in the market for a digital tipping solution, it’s important to understand the different types of digital tipping. 

Here’s how we break it down: tip acceptance and tip distribution. One is important for accommodating customers’ needs (and frequent lack of cash on hand); the other allows your business to pay employees more efficiently.

Depending on the type of company you’re running and the way your team is structured, you might have a need for digital tip acceptance, digital tip distribution, or both. 

Digital Tip Acceptance 

We’re probably stating the obvious here, but cashless tip acceptance isn’t new: every time a customer pays for a meal or service and leaves a tip on their credit card — well, you’ve just accepted a cashless tip.

But now more than ever, companies are using POS systems and digital tipping software (like Kickfin) to accept cashless tips where cash had been the norm — or where a tip may not have been offered at all. For example:

  • QSR and fast casual restaurants: Rather than dropping their change into a tip jar at the coffee shop or to-go counter, customers are being prompted to leave a digital tip directly on the POS. (You know, the old iPad swivel…)
  • Online ordering: Online ordering systems now allow users to leave a tip from their phone instead of paying a delivery driver in cash. Brands like Panera even give you the option to tip when you’re placing a rapid self-pickup order and wouldn’t otherwise have an opportunity to interact or tip the people preparing your food.
  • Hotel guest services: Many hotels are adopting text-to-tip options and QR code tipping so that guests can easily tip their housekeepers, valets, and concierges if they forgot to swing by the ATM first. 

With the expanded uses of digital tip acceptance, we’re seeing many more opportunities to thank service industry employees for their work, even when we don’t have bills in our wallets or a direct interaction. 

More tipping options allow employees to boost their incomes (and who doesn’t love that?), so they stop losing out on tips just because customers don’t carry cash. Plus: it allows even more employees to become tip eligible  Business owners and managers can also use the opportunity to earn tips to attract and retain more hourly workers. 

See cashless tipping in action! Get a Kickfin demo today

Digital Tip Distribution

Since most of your employees’ tips are cashless anyway, paying out cash tips has become a major operational challenge — which is why so many restaurant teams are choosing to move away from cash tip-outs. 

But that doesn’t mean employees can’t get paid on the daily. Enter: digital tip distribution.

Instead of having your managers run to the bank, count out tips, and distribute envelopes of cash day after day, shift after shift, there is now a range of options for digital tip distribution — payroll, paycards, or instant digital tip-outs. 

This side of cashless tipping is a little newer, and it’s impacting how restaurants, hotels, and other service industry businesses view their daily operations and hiring practices (for the better):

  • Digital tip distribution saves managers from running to the bank during a shift — when they could be touching tables, helping on the line in the kitchen, or getting caught up on inventory.
  • Operators save money because digital tipping eliminates costs associated with cash deliveries and employees waiting for their tips on the clock. 
  • Digitizing tip payments can reduce the risk of error and theft.
  • Gen Z and Millenials are increasingly demanding instant, digital payment options. If you’re competing with other restaurants for the hourly workers, offering instant digital tips can make your establishment stand out from other employers.

Ready to check out cashless tipping for yourself? At Kickfin, we offer cashless tip acceptance and instant digital tip outs that are sent straight to your employees’ bank accounts, the second their shift ends. Request a demo of Kickfin.