An Industry Insider on Tipping the Scales in Restaurants’ Favor

With the restaurant and hospitality industries mired in a staffing crisis, Kickfin Co-CEO Brian Hassan explains why digital tipping platforms that enable instant payouts can help companies attract and retain employees.

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At a time of widespread staffing shortages, restaurant and hospitality companies are searching for ways to retain employees and attract new ones. While there is no panacea for this problem, tipping-related platforms can make a big difference. In recent years, digital tipping culture has become more systemized and increasingly expected — and tipping has consequently surged, with a report from Square finding that total tips for full-service restaurants and QSRs shot up 25% and 17%, respectively, during the latest quarter compared to a year before.

In an interview with PYMNTS, Brian Hassan, co-CEO of Kickfin, noted that consumers can hardly get a cup of coffee anymore without being asked to tip a few bucks, a trend that companies can take advantage of with digital tipping platforms that support instant payouts.

Hassan explained that with the right type of platform in place, the surge in tipping can be a boon for restaurants because they are able to pay workers right away, every single day, resulting in a higher take-home wage, which is what many employees are looking for.

“If there’s any way that they can reduce what is a multi-hundred percent turnover year over year on labor by saying ‘Instead of paying you $15 an hour, perhaps you could take home $20,’ [then that’s just smart business],” he said.

This can make a major difference because acquiring and retaining new staff can be a costly affair. Hassan estimated that employee acquisition and retention can cost eateries and coffee shops as much as $5,500 per worker.

Digital platforms can also make divvying up tips far easier than traditional methods. Rather than manually counting tips and handing out physical money to employees at the end of their shifts, companies can seamlessly calculate and track who is owed what — and make payments directly into employees’ bank accounts accordingly.

Hassan noted that more restaurants are adopting digital platforms, often by integrating such capabilities into their point-of-sale (POS) or enterprise resource planning (ERP) platforms. To meet this demand, Kickfin added digital tipping and instant payout features into their platforms, tapping Ingo Money to embed this functionality.

The key is to make it as easy and safe to use these platforms as possible. Kickfin, for example, can be deployed directly into POS or ERP platforms or, if a company prefers, in an unintegrated fashion so the solution can be used right away. The easier platforms are to adopt and use, the more restaurants will embrace them.