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

Trump’s Immigration Policy Puts the Squeeze on US Seasonal Employers

Trump’s Immigration Policy Puts the Squeeze on US Seasonal Employers

US President Donald Trump’s efforts to curb the number of both documented and undocumented immigrants coming into the US has done little to stifle demand for foreign talent among US employers, particularly in industries where qualified or willing candidates with US citizenship are harder to find. Trump’s “Hire American” policy is meant to boost wages and employment among Americans by reducing competition from foreign workers, though critics have insisted this would stifle growth and lead to labor shortages.

One industry that has been heavily reliant on foreign talent in recent years is the travel and tourism sector. While the government ended up expanding the number of H-2B guest worker visas by 15,000 in July, the expansion may have been too small and come too late and was too small to help some employers, while other critics said it was unjustified. Now that the first summer season of the Trump administration is drawing to a close, Politico’s Ted Hesson looks at how the sector coped with the new environment, whether by “hiring American,” raising wages, or scaling back their operations:

North American Midway Entertainment, a large traveling-amusement-park company headquartered in Indiana, requested roughly 400 H-2B workers this year, a quarter of its total seasonal workforce. But the Department of Homeland Security reached its 66,000-visa cap before the company could secure the guest workers. Company President Danny Huston said he had to skip three fairs and contract out some ride operations because of the visa shortage. In total, he estimates that North American Midway may have lost as much as $800,000. …

Read more

UK Employers Concerned After Brexit Immigration Plan Leaked

UK Employers Concerned After Brexit Immigration Plan Leaked

A leaked draft of the UK Home Office’s plans for a post-Brexit immigration policy has caused a stir among employers in the country, the Guardian reports, with some industries, including building, agriculture, and hospitality, saying they could face “catastrophic” labor shortages if the plan is enacted as written:

About 2.2 million European Union nationals work in Britain – roughly 7% of the overall workforce – with some subsectors of the economy almost totally reliant on migrants, official figures show. … The hotels, retail and hospitality industries, in particular stand to lose from the reforms. Some 75% of waiters and 25% of chefs working in the UK come from other EU nations. “If these proposals are implemented it could be catastrophic for the UK hospitality industry,” said Ufi Ibrahim, the chief executive of the British Hospitality Association.

Hospitality firms need at least 60,000 new EU workers a year in order to fill vacancies, according to research for the BHA by the accountancy firm KPMG.

UK businesses were already worried about the impact of Brexit on the UK’s already tight labor market and their ability to meet their staffing needs and grown. The Home Office’s plans, which cater strongly to the demands of “hard Brexit” advocates who favor a crackdown on immigration from the EU, are unlikely to allay those concerns. The 82-page document, which the Guardian outlined when it emerged on Tuesday, proposes to end the free movement of labor between the UK and the EU as soon as Brexit comes into effect, and thereafter to phase in a new immigration system that end the right of most European immigrants to settle in the UK:

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

NLRB: Chipotle Must Rehire Employee Who Tweeted About Low Pay

NLRB: Chipotle Must Rehire Employee Who Tweeted About Low Pay

An administrative law judge of the National Labor Relations Board this week ordered Chipotle to rehire James Kennedy, an ex-employee of a restaurant in the suburbs of Philadelphia, who was fired after criticizing the company on Twitter and circulating a petition to improve conditions at his workplace, the Philadelphia Inquirer reports:

Now the fast-food eatery has to offer to hire him back, pay him back wages, and post signs that some of its employee communication policies, including its former social guidelines, violated labor law. … A manager testified in the case that she fired Kennedy, a three-time war vet, after a heated argument on the petition, saying she was concerned that he would become violent. In her opinion, the judge dismissed that concern. …

In January 2015, after a customer tweeted out thanks for a freebie at Chipotle’s, Kennedy tweeted back, “@ChipotleTweets, nothing is free, only cheap #labor. Crew members only make $8.50hr how much is that steak bowl really?” Kennedy’s boss showed him a social media policy that prohibited “disparaging, false . . . statements about . . . Chipotle.” The boss asked Kennedy to remove the tweet, which he did. Two weeks later, on Feb. 17, 2015, he was fired after he circulated a petition about workers’ inability to take their breaks.

Read more