Pizza Today - July 2021 - 16

BUILDING BLOCKS N I C K B OG A C Z
ing wages to shoot up and prompting
some pizzerias to implement signing
bonuses, enhanced employee perks and,
of course, higher wages.
Timing raises
Increasing wages might be diffi cult,
and in many cases, you may not want
to be the fi rst shop in your area to do
so - but you certainly don't want to
be last. If your business is booming and
you are setting records weekly, and if
the sales seem sustainable along with
adding profi t to the bottom line, then
maybe you do want to set the market
for wages in your town.
Being fi rst has its advantages -
When's the Right Time
to Increase Employee Pay?
I
f you opened a new restaurant
during the pandemic, hopefully
you're one of the many pizzerias
across the country experiencing a sales
surge due to your business' existing
options for takeout and delivery. But as
states open restaurants to full capacity,
the new challenge is hiring and retaining
good employees. We broke down
some of the strategies toward meeting
those goals in the previous article, and
now we'll discuss perhaps the most
powerful tactic - the balancing act
surrounding employee pay and pay
increases.
Creating your pay scale
For the last few years, the minimum
wage, along with a livable wage,
has been a hot topic of debate. All
industries are feeling the crunch of a
national employee shortage, and it is
causing many operators to re-examine
their current pay structures.
When setting up your pay structure,
understand that it is an ever shifting
and evolving part of your business.
Nevertheless, it should be clearly
defi ned - what is the starting rate?
Th e ladder for raises? What to expect
at a given position? Th e clearer it is
for the employee and the employer to
understand when the topic comes up,
then a more meaningful discussion can
happen.
Ideally, your pay scale would be
based on your local market and your
profi tability. At the end of the day, we
are in business to make a profi t. But
the current market is disruptive, causclearly,
you're a more attractive workplace
- while being fi rst also opens the
door to many issues. If you're noticing
employees leaving at an alarming rate,
it's potentially a red fl ag that your
wages are too low. Conversely, if you're
having an impossible time going from a
phone interview to an in-person
interview, it's another sign that you
need to restructure your pay scale. Just
start with your current employees fi rst.
Doing the math
Of course, the big question when
raising employee wages is: where do
you fi nd the money? Let's say you're
running a 55-percent prime cost number,
of which 30 percent is your food
cost and 25 percent is your labor cost. If
you give employees a pay increase that
increases your labor to 26 percent, does
your prime cost goal now just become
56 percent - while you sacrifi ce your
profi t percentage?
Personally, I'd say if your prime cost
has been 55 percent, then that's the
fi gure that likely makes the most sense
for your business. You're left with one
option: it's time to raise prices. We'll
tackle that tricky task next month. ■
NICK BOGACZ is the founder and president of Caliente Pizza & Draft House in Pittsburgh. Instagram: @caliente_pizza
16 / PIZZATODAY.COM / JULY 2021

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Pizza Today - July 2021

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