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7Shifts Embeds Instant Digital Tips Into Restaurant Team Management Platform

October 24, 2022

Tipping has reached a tipping point, so to speak, in the restaurant industry.

As restaurants look to simplify their operations, tipping has become a major point of friction.

There are complexities in divvying up tip payments by shift, by customer and by local regulations.

There is a consumer who tips more often — and more generously — in a post-pandemic environment. And a restaurant that wants more flexibility to add service fees that can be allocated across all restaurant staff, including dishwashers and chefs.

Then there is the restaurant operator’s daily dash for cash from the bank each day so that workers receiving tips leave the restaurant at the end of their shift with those funds in hand. Literally in their hands: most tips are paid out in cash, which can create potential safety concerns for both the worker and the restaurant.

Restaurant team management platform 7shifts has recently announced that it’s added instant digital tip payments to its platform. 7shifts offers a cloud-based solution for restaurants to manage their workforce, including hiring, retention, training, scheduling and tip pooling.  Ingo Money powers the embedded instant digital tip payout capability for the 7shifts platform.

“Digital solutions have made it easier for restaurants to track their tips, but not easier to pay them out,” Jordan Boesch, founder and CEO of 7shifts, told PYMNTS.  Restaurants on the 7shifts platform can now pay out tips instantly and digitally directly to the bank accounts of restaurant workers immediately after shifts. And, Boesch said, ditch the “complex spreadsheets” that once managed a process more easily done by software.

Boesch said that they chose Ingo Money after spending a year investigating different options. He cited Ingo’s flexibility in enabling funds flows consistent with the needs of the 7Shifts stakeholders — the restaurants and employees — and ability to offload the complex licensing requirements to their platform, not his.

“It’s exciting. I think what Jordan’s doing and what we’re doing together can do nothing but help a very vital industry in this country,” Drew Edwards, CEO of Ingo Money, remarked.

Taking on the Giants

Streamlining restaurant owners’ operational tasks with smarter technology such as this instant digital tipping offering can help equip smaller institutions to take on major brands.

“This is a beautiful example of where … cloud-based technology and payments can come together and help those independents and large operators compete in an ever-challenging labor environment, giving them … best-in-class functionality [regardless of the size of the operator],” Edwards asserted.

Boesch said that with digital tipping, additional kinds of gratuity are possible — not just adding a given percentage to the check at the end of the restaurant experience, but also chipping in some money for people who are consumer-facing, behind-the-scenes, or even across various parts of the hospitality industry.

“Certainly, more consumers are tipping, but I would also say that we’re also seeing more restaurant brands looking at tipping more equitably across the organization,” Boesch, explained. “Some of the great brands are looking at how they can make these processes more equitable to all of their staff, not just specific departments, and maybe not just specific seniority levels.”

The Road Ahead

Boesch said that 7shifts is the result of his childhood as the son of a restaurant operator, watching his dad juggle phone calls and paper time-keeping ledgers daily to make sure that all shifts were filled. When the platform launched in 2014, getting restaurants and workers on board was helped by the adoption of smartphones and apps, and the use of both by the teenagers working at these fast-food establishments.  Today, 7shifts counts over 35,000 restaurants and about 1 in 15 restaurant industry workers utilizing its platform.

In the near term, Boesch said that he plans to bring new digital tools to the restaurant hiring process itself, going beyond the job board that it operates today. With almost 1 million team members on the 7shifts platform, it is possible to use AI and Machine Learning to match qualified workers with restaurant operators’ staffing needs, saving owners the time of sifting through resumes.

These kinds of innovations are especially needed right now, given restaurants’ staffing difficulties. According to data from the 2022 edition of PYMNTS’ Restaurant Readiness Index, which drew from a survey of more than 500 managers of quick-service restaurants (QSRs) and full-service restaurants (FSRs) across the country, nearly half of all restaurants have been facing hiring and retention challenges. Additionally, the study noted that nearly one in three restaurants reported that their level of service has decreased because of staffing issues.

7shifts’ longer-term future includes building out the “Uber for restaurant staffing.” Instead of the platform making it easier for a single restaurant to optimize its workforce, 7shifts can match workers with availability in their local markets with restaurants that need workers. Training programs can certify restaurant workers in the skills needed to work in specific restaurants chains, which expands their employment options.

This system would, of course, include tips paid out instantly at the end of any shift at any restaurant on the 7shifts platform.

For Boesch, it is about making restaurant work a profession, not a stop on the way to another employment opportunity.

“I think this is going to be a win-win in the long term for the workers as well as the operators,” said Boesch.

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