How TipHaus's Tip Distribution Software Streamlined Operations and Reduced Turnover by 31 % at Ivar's Seafood Restaurants
Ivar's, a renowned Seattle-based seafood chain, sought to enhance the experience for both guests and staff by introducing tipping at their 18 quick-service locations. However, ensuring efficient, accurate tip distribution while complying with regulations posed a challenge. This case study explores how TipHaus partnered with Ivar's to deliver a solution that not only streamlined tip management but also empowered employees with a new benefit – earning tips – while maintaining fairness and adhering to tipping laws.
Executive Summary
Region:
Washington
Business Type:
Seafood Restaurant
# of Locations:
18
Interviewee:
Patrick Yearout, Senior Innovation & Recruitment Director
Problem:
Ivar's seafood chain wanted to reward their quick-service employees with tips, but managing tips across 22 locations and avoiding manual calculation errors seemed challenging. Higher employee turnover further burdened Ivar's.
Solution:
TipHaus' automated tip distribution system eliminated the need for manual calculations, saving Ivar's time and ensuring accurate payouts. This empowered employees with the ability to earn tips, boosted morale, and positioned Ivar's as a more attractive employer, leading to a decrease in turnover.
Background
Seattle-based Ivar's is a renowned seafood restaurant chain with a long history in the Puget Sound region and Spokane, Washington. They've expanded their portfolio to include the popular Kidd Valley burger chain. Prioritizing a commitment to a quality experience for both guests and employees, Ivar's sought to extend tipping practices to their 22 quick-service locations. However, the challenge was finding a system to efficiently and accurately distribute tips while ensuring compliance with regulations. This case study explores how TipHaus, in conversation with Patrick Yearout, Ivar's Senior Innovation & Recruitment Director, provided a solution that empowered Ivar's to introduce a new employee benefit – tipping at their quick-service restaurants – while streamlining tip distribution, and reducing turnover by 31%.
Problem
Seattle's iconic Ivar's seafood chain, known for its delicious offerings and rich history, faced a unique challenge in its quest to provide an exceptional experience for both guests and staff. Unlike their full-service restaurants, their 22 quick-service locations simply didn't offer tipping – a practice some guests were eager to see implemented. This lack of a tipping system wasn't necessarily a burden for Ivar's, but it did limit their ability to reward their quick-service employees for their hard work. In a competitive job market, this was hindering Ivar's ability to attract and retain top talent.
Even without a pre-existing tipping system to manage, Ivar's wrestled with a significant challenge: high employee turnover. As Patrick Yearout, Ivar's Senior Innovation & Recruitment Director, explains, "turnover is very costly for restaurants. The financial impact goes beyond simply replacing a vacant position. There's the lost knowledge and expertise that walks out the door, the time and resources invested in recruiting and training new hires, and the burden placed on remaining staff who have to cover extra shifts.” This constant cycle creates a hidden cost that eats away at Ivar's profitability.
Lastly, handling tip calculations for each location individually would be a logistical nightmare. Patrick knew implementing a new tipping system would be time-consuming and also prone to errors, “we would be spending 50 hours manually each month”. These errors could have ripple effects. An already busy staff would be burdened with this tedious task, reducing the time they could dedicate to serving customers and maintaining smooth operations.
“The beauty of TipHaus is that you can just plug it in and don’t have to worry about it at all, as unlike other tools, it won’t add any extra work. It definitely had an impact on our staff satisfaction and retention. It also helped with our guest satisfaction, as the guests were now able to add the tips to their favorite servers.”
Solution
TipHaus, the innovative tipping solution, empowered Ivar's to transform their employee compensation structure and address the cost of turnover. Prior to TipHaus, the very idea of managing tips across their numerous quick-service locations seemed daunting. The sheer number of locations, 22 in total, presented a significant logistical hurdle. Manually calculating tips for each location would have been a nightmare, prone to errors and time-consuming. Furthermore, without a system in place, Ivar's couldn't offer their quick-service employees the ability to earn tips, a perk that could impact their financial well-being. As Patrick Yearout mentioned, implementing TipHaus allowed Ivar's to "start adding their tips to their payroll every two weeks," putting extra money directly into employees' pockets and improving their financial security.
TipHaus, with its user-friendly platform, eliminated these concerns entirely. By automating the entire tip distribution process, TipHaus not only saved Ivar's countless hours but also ensured accurate and efficient payouts for their employees. This newfound ability to offer tipping, facilitated seamlessly by TipHaus, became a game-changer for Ivar's. It wasn't about fixing a broken system; it was about creating a whole new system – one that empowered employees by offering them a chance to earn more, delighted guests who wanted to show their appreciation, and positioned Ivar's as an even more attractive employer. Since implementing TipHaus, Ivar's average guest satisfaction score in quick-service restaurants has jumped from 4.26 to 4.65 (on a scale of 1-5). Additionally, they reduced hiring by 107 people in a year, a significant cost savings and a testament to the power of a happy and well-compensated workforce.
"We had to hire 339 people between March 2022 - March 2023 before we implemented TipHaus. In 12 months since we started using TipHaus, beginning of March 2023 to March 2024, we hired 232, so that means having to train 107 staff less, also less interviews, less scheduling interviews, less new uniforms, etc. this is a decrease of 31%of having to hire a lot less people. The only single thing we changed and did differently during that period was implementing TipHaus."
Patrick Yearout
Senior Innovation & Recruitment Director
Results
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