An automatic gratuity is nothing other than a forced entitlement that makes sure the revenue is there to support the staff. The true costs are masked and called something else.
It’s easy to see that the recession is over. I can’t go anywhere without seeing “help wanted” signs in every store window—especially foodservice outlets, and even more so with fast food. Almost every club in the country has to compete with every retailer in town for what are now scarce employees.
Actually, employees are not scarce. It’s just that we are either not willing to pay enough to be competitive, or unemployment benefits are high enough that taking a paying job has marginal value.
While still trying to minimize fixed costs for front-of-house workers, a new and, in my mind, insidious trend is evolving. Club food-and-beverage operations are putting in automatic gratuities, usually 18-20%. This makes a certain amount of sense when you are sitting in a boardroom discussing F&B profitability (or more frequently, the lack thereof). This practice gives the appearance of keeping fixed wages as low as possible, yet still being competitive in the workplace, because the gratuity makes up the difference.
The notion of having the wait and bus staff work for very low fixed wages and make up the difference with tips is historic; it’s been part of the foodservice social contract for over a century. And it worked—as long as the gratuity was a result of effort on the part of the wait staff. The better the service, the bigger the tip.
But an automatic gratuity is nothing other than a forced entitlement that makes sure the revenue is there to support the staff. The true costs are masked and called something else. In this environment, there is no difference between excellent or superb service and mediocre or poor, indifferent service. Over time, the old axiom applies that “the bad always drives out the good.” Good servers leave for better-paying jobs that are reflective of their drive and professionalism, as evidenced by their gratuity income. The club begins to have a staff that is indifferent or slow—and, because there is no downside to the server, truly mediocre at best.
So what is my solution? The easiest answer is to make gratuities voluntary—a reward for service that goes to where it is deserved. We could also raise the wages that we offer to be more competitive with local competition (we are paying it anyway, but just calling it something else). The subtext is that there is a reluctance to raise menu prices to better cover costs. This is hard to do emotionally, so we fall into these fictions of how to cover costs.
The price is heavy, but largely hidden. The cost is bad service, where members go elsewhere because their expectations are not met by the club.
You get what you pay for.