OPINION: To tip or not to tip, that is the question? - Simon Cotton, HRH group

Hospitality has been in the news regularly since the start of covid for a number of reasons, but none more pressing than the financial impact it has had on the industry.

As a business anyone in hospitality will have felt the pinch from closures to restrictions and everything in between. However, with covid now a way of life, hospitality is facing an aftermath of pressures with staff shortages creating a new challenge for the industry and our town.

So, what are the main factors creating a staff shortage? Well, amongst a shortage in supply of people wanting to join the industry, the cost of living versus the cost of hospitality wages is certainly one factor becoming ever more pivotal.

Here at the HRH Group we are indeed paying more per hour to our staff than ever before to simply recruit and retain good staff. This is not unique to us, this is happening across Harrogate and across the country.

But, with VAT increases and rising inflation impacting businesses, the wage increases can not continue forever. If they did we would be in a vicious circle of putting prices up to cover more outgoings, thus deterring customers, which in turn creates losses in profits and wages can not be sustained in that way.

One of the old-age benefits of working in hospitality is tips; for decades bar workers, waiting staff and front of house have benefitted from tips. What used to be cash in hand at the end of a shift now has to be paid through payroll with tax accounted for, but it is still a good earner for good staff working hard.

However, you may be shocked to learn that not all hospitality businesses give tips to their workers. This is something that has to change and why I was so disappointed to hear this week that the Government has again halted the Tipping Bill put forward by MP Dean Russell, removing it from the Queen’s Speech this week.

A potential Service Charge Law would prohibit employers from retaining tips and gratuities intended for staff, giving hospitality workers extra income for working hard on top of their wage, surely something welcomed in these times of inflation.

At the HRH Group we don’t do this, at every one of our establishments the tips go directly to the teams that have delivered that service. In my mind to not do so would be fraudulent to our customers who are willingly tipping because they have received good service from those team members.

Of course, there is another debate when it comes to tips that has been creeping in more and more in the UK that originated over in the states; automatic service charge on bills. In some restaurants, bars and hotels you will notice that when you come to pay an automatic service charge has been added to your bill.

Whilst this can be removed upon request, it is becoming the norm for this to be added to your bill to pay rather than waiting to see if you want to tip.

On this topic I am firmly sat on the fence, I see the debate from both sides. From a company point of view, we know that not everyone tips for good service. However, by adding that service charge on the bill, does it deter customers from coming back as they feel an undue charge has been forced upon them, again, especially at times of inflation.

My thoughts on it all are that if you receive good service, then a tip is not out of question, but if you’ve had bad service then let the managers know. Don’t tip awkwardly, or pay the service charge and complain afterwards, resolve whilst you are there.

And, whilst we’re talking about rewarding good hospitality, the Hospitality Awards are almost here.

Take a lookout over the next few weeks for more information about why those Harrogate businesses and people have been shortlisted.