5 Potential Threats Facing Restaurants With Minimum Wage Employees

Even when your restaurant is running smoothly, part of being a great manager is recognizing that there are threats are lurking just under the surface. One thing that can put restaurants at risk is employing staff at minimum wage. Although It’s not uncommon, it’s become a hot topic for employees, restaurant owners, and lawmakers across the country. Below are a few of the threats that face restaurants with minimum wage employees, and what you can do about them.

Low worker productivity

Many people are motivated by money. When your wages are sitting at the very minimum level, it’s possible that employees will feel that they’re not paid enough to be working so hard. They simply won’t be motivated to do their best work for you. When this happens, your productivity is sure to take a hit, and that’s one of the fastest ways for your profits to plummet, too.

The good news is that even if you’re not able to pay much more than minimum wage, there are other ways you can show your employees that you value their work. Giving regular feedback can help your staff see where they’re having an impact on your business. And non-monetary benefits are a great way to motivate your employees, too.

Negative backlash from employees

As part of the national conversation around minimum wages, you also need to be aware of your employees’ position on their pay. Are they generally content, or are there rumblings about not being paid enough for the work that they do? Either way, this attitude and the potential backlash that accompanies it can affect your business.

Employees will speak out about their pay if they feel strongly enough. And when there’s one or two that are unhappy, they can be a powerful force in mobilizing additional employees to take a stand against your business or your wage structure. What this means for your business depends on the employees - but having an open dialogue about wages with your staff can decrease the risk of unrest and backlash from your team.

Difficulty attracting new employees

Just because your employees don’t raise the issue with you doesn’t mean they’re not talking about it. It’s likely that their conversations with others in the industry includes this hot topic. And depending on your position on minimum wage, this can affect your reputation and your ability to attract talented, qualified staff.

Be sure you do the relevant research in your neighborhood. Find out what the other restaurants in your area are paying and keep an open dialogue about the other local opportunities for qualified employees. Although there’s no way to guarantee that you can keep your employees at your restaurant, you can certainly do your best to keep them happy and to let them know you’re open to hearing their concerns.

Protests from customers

There’s a growing movement around paying fair wages and providing great working conditions for employees. Is your stance on minimum wage affecting how consumers view your business? Even if you don’t think so, you may not be aware that some knowledgeable patrons are visiting other restaurants because of what they know about wage conditions in their area.

Be sure you have a response prepared so that if a guest asks about wages, you can respond clearly and succinctly without having to provide unnecessary information. And if several guests inquire, it might be worth contacting your neighborhood association or researching your local government to see what laws or conversations are taking place about wages. At the end of the day, do your best to redirect your guest’s concerns to the experience you offer: the amazing food, the outstanding service, and your wonderful atmosphere.

Changes in minimum wage law

By now you’re aware of the national conversations about raising minimum wage for tipped employees. It’s a constant battle, and it’s heating up again in recent months. The conversation is far from over, but it’s important as a restaurant owner that you understand the implications of a minimum wage increase will have on your business.

First, you’ll need to consider how the increase will affect your guests. You’ll likely need to make price adjustments across your menu to cover the costs, and your guests will notice. Be upfront about the change, and be sure that you raise your prices enough - the last thing you’ll need is to have to adjust prices again in a few weeks because you weren’t aggressive enough initially.

You’ll also need to consider how the increase could affect your ability to provide benefits for your employees. From health care to staff meals, your non-monetary benefits still affect your bottom line, and you may find that you need to re-asses your offering based on your new revenue calculations.

You’re the only one who knows whether your business is equipped to handle the benefits and the risks of staffing minimum wage employees.

Have you faced any of the threats above? Tell us how you dealt with them in the comments.