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May 21, 2022

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Zazie's: Sharing Profits and Eliminating Labor Shortages

Zazie has a policy that does not include tips, but profit sharing: a 'cooperative' approach that has zero manpower problems.

Gianluca Ricciodi Gianluca Riccio
in Economy
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zazies restaurant without labor crisis
February 22 2022
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There are many commercial activities in the restaurant business that have closed their doors in the last two years. A lot of commercial crisis, reduction of hours and in several cases also a shortage of manpower.

In Italy, a policy often dictated by necessity (but not only) has produced a situation in which restaurants complain about the low propensity for work of the manpower. In reality, it is often a clear-cut preference: many workers are forced to choose between a subsidy (such as temporary citizenship income) and a wage that is less than or equivalent to a subsidy.

Things aren't going well abroad either, but a formula tried out by an American restaurant in the San Francisco area can be an interesting starting point.

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Zazie's: zero tip, zero labor shortage

Zazie's, no labor problems
The entrance to Zazie's

“Everyone went back to our restaurant after it reopened,” he says Megan Cornelius, co-owner of Zazie's restaurant. Zazie's had "very little" labor turnover. Of the 40 employees, only one left the venue (changing its sector).

The reason for this good result? The politics of his club. Zazie's doesn't tip customers' tips to pay for staff (in the US they are practically institutional, and in restaurants they range from 15% to 20% or more). Instead, aim to share profits with staff.

The "perfect" number? 12.

Waiters get 12% of all orders they receive at tables (an incentive to perfect their audience 'counseling' skills. Let's say sales). Yet another 12%, this time of all restaurant profits, is distributed to the entire workforce, both in the dining room and in the kitchen.

“Profit sharing made sense to us because it reflects our level of commitment,” says Cornelius. “The staff and the restaurant pay off if we are busy. We find it a good alternative to raising wages, which would be prohibitive for us at the moment. It is also an incentive to work hard and to provide exceptional service at your tables ".

No tips, no manpower and happy customers

no tip, no labor shortage
POST FP 700X500 10 1

The "cooperative" logic of the American restaurant also continues towards customers. The no-tipping policy is an openness, "Tipping is a very archaic way of making money, our guests compliment us on this choice," says the co-owner.

This obviously leaves customers power of choice, who in several cases continue to leave a tip, but in total freedom (even on the figures).

Result: satisfied customers, employers who pay the minimum wage by law and do not choke on debt, more involved man who earns a share from the salary, one from the profits of the company and one from the free tips.

“We always get compliments from our guests,” Cornelius said, saying he thought that the momentum for non-tipping policies was growing among the diners.

It is appropriate to say, borrowing the lapidary motto of the excellent Rudy Flag: “Shares and conquers”.

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