Danny Meyer Wants to Change the Culture of the Restaurant Business

Danny Meyer Wants to Change the Culture of the Restaurant Business

Restaurateur Danny Meyer, the founder of Shake Shack and CEO of the Union Square Hospitality Group, is already famous for his employee-centered approach to restaurant management: By eliminating tipping in favor of higher wages and offering restaurant staff benefits like paid parental leave, he has broken the mold in an industry typically associated with high turnover, unpredictable incomes, and little in the way of job security or growth opportunities.

Meyer’s vision, which Aaron Hurst explored in an in-depth profile at Fast Company last week, is much bigger than simply abolishing tips. He’s looking to fundamentally transform the culture of his businesses, in large part by giving employees both a literal stake in the success of the restaurant and a greater sense of ownership toward the business and their careers:

When I asked Meyer how the change has turned out, he says when you make such a sweeping move across your business you have to make sure everyone is listened to, including your customers and your staff, “Our first priority was engaging and educating our own team in this conversation through a series of internal townhalls, so that they could be genuine ambassadors of the change. We started the conversation about “Hospitality Included” with our own people months before we made the news public or implemented it in any of our restaurants.” …

How do you persuade your waiters to forgo a 20% tip on each table they serve? Meyer says they never wanted to hire people who would only have been nice to you if they assessed it out of the four tables in their section, you were the richest or you were the most generous. “I would never want someone on our team who would go through that calculus. To say, “Who should I bring the food out for first?”

Now, the Wall Street Journal reported on Sunday, Meyer is taking his campaign to change beyond his own restaurants and even beyond the restaurant industry, launching a $220 million private equity fund called Enlightened Hospitality Investments LP to back companies that share his values of pursuing growth by taking the best possible care of their employees. Restaurant industry observers say the fund will likely get favorable terms on many of its investments because businesses want to be associated with Meyer’s brand.

Read more

Danny Meyer Brings Talent War to Restaurants with Parental Leave Policy

Danny Meyer Brings Talent War to Restaurants with Parental Leave Policy

Restaurateur Danny Meyer of Shake Shack fame is rolling out paid parental leave for restaurant staff at his company, Union Square Hospitality Group, which operates a number of popular restaurants around New York City. Eater broke the story earlier this week:

Starting in 2017, all full time employees in the front and back of the house with more than one year of employment will be offered 100 percent of their base wages for the first four weeks after their child is born or adopted. After that, all employees will be offered 60 percent of their base wages for the next four weeks. This leave plan applies to all new parents — mothers, fathers, and committed domestic partners with babies or newly adopted children. This plan will cover all Union Square Hospitality Group restaurants. (Shake Shack, Meyer’s hit burger chain, became its own company in 2015 and will not fall under this parental leave plan.) Union Square Hospitality Group piloted this parental leave within its corporate office, starting in 2015.

Meyer has long been a force for change in the restaurant industry and an advocate of pro-employee policies. Last year, he made headlines with his decision to get rid of tipping at his restaurants and shift to a “hospitality included” system, where the cost of service is built into the price of the meal and employees are paid a higher wage. That decision has made waves in the industry and also sparked a widespread conversation about the fairness and class dynamics of tipping. The Union Square Hospitality Group’s new parental leave policy is also likely to have an industrywide impact, Kathryn Vasel writes for CNNMoney, as it signals a focus on retaining talent in a traditionally high-turnover field:

Read more