The Hospitality Sector Has Reached a Tipping Point, What Can We Do?

By Evgeniy Chuikov, CEO and Co-Founder of EasyTip

The impending recession, the phenomenon of hospitality job vacancies soaring by 75%, and consumer spending not matching the pace of the overall inflation are some of the many challenges lying ahead for the sector. Hospitality employers are struggling to hire and pay the bills, while current employees are dealing with more work but with the same pay.

Employers in the industry need to rethink their working structure and benefits to raise their appeal again. Consumers can play a huge role too. Besides supporting local businesses, a simple but impactful act of tipping could reinvigorate the sector.

Tipping improves recruitment and retention

With the employment crunch, hospitality employers need to have a good look at how it is conducting its work practices and identify ways to enhance the staff’s experience and wellbeing. As tips comprise an important proportion of a hospitality worker’s income, it is more important than ever for employers to take responsibility in delivering tips fairly and quickly.

Fortunately, the government is backing a new law that makes it illegal for employers to withhold tips and service charges from staff. This is a good start to safeguard workers and give them the confidence to consider the industry again. However, the next step is for employers to identify a way to account for and distribute these tips quickly – be it through a more structured process or utilising technological innovations.

Cashless tipping is one of the new ways to ensure fast and fair tipping distribution, coming at a time when more than 23 million people in the UK have not used cash in the last year. From point-of-sale providers like Samtouch Software, to beauty salons like Gielly Green, businesses are empowering their employees to receive tips directly from the customers using QR codes so customers can tip without needing to download an app. In fact, we found that such cashless tipping solutions have produced an increase in staff tips of as much as 30%. The greater transparency and discrete tipping experience benefits the customer, employeee, and employer all around.

Tipping rewards hospitality staff for their efforts

We must not forget the simple yet powerful gesture of tipping. It is a tangible way to show appreciation, and it goes a long way to benefiting the staff. It acknowledges the hard work they’ve put in and potentially helps to alleviate any financial stress.

Anyone whose service you utilise – be it servers, hairdressers, or delivery drivers – deserves a tip. In two of the most challenging years of our time, these are the workers who kept going and who could very much do with a small financial boost to keep going.

Tipping can lead to a reinvigorated hospitality sector

Whatever money we inject into the sector would inevitably come back again and would ultimately help to boost the overall economy. That’s the circular flow of income model, and this is concept is especially pertinent when we think of tipping in the hospitality sector.

Hospitality employers who can boast such equity in the world of gratuities can boost their recruitment and retention rates because it shows that they care about their staff, while consumers who tip can encourage and make a world of difference in a worker’s life.

If we can make transparent tipping practices an industry standard – both from the consumer and the employer’s point of view – the sector may boost its attractiveness, find new workers keen to join or re-join it again, build up its resilience, and help it move past the tipping point.