Andrea Behrends

Staff makes anywhere from $19-30 an hour after tips.

How Bartaco's COVID Pivot Removed Labor Pressures

One restaurant has more than 2,000 open applications. 

Today’s "normal" for restaurants and operators is complicated to say the least.

Labor shortages and supply chain issues have hindered restaurant comebacks throughout the country. According to recent data from the Bureau of Labor and Statistics, there were roughly 1.6 million open jobs in leisure and hospitality in September, which represents 10 percent of all jobs in the industry.

Workers have also quit their jobs at record numbers. The separation rate rose to an unprecedented 3 percent in the U.S. overall in September, and leisure and hospitality was more than double that rate. This is happening when average hourly wage for non-management positions is at a record high, averaging $16.68, according to the BLS.

Bartaco, which has 21 stores in 11 states, has dealt with the same issues other restaurants have during the pandemic, but the brand took a different approach—specifically with staffing.

“One of the units has over 2,000 open applications right now,” CEO Scott Lawton says. “We actually have a volume [of job applications] that we’re having difficulty keeping up with.”

READ MORE: Bartaco and Barcelona Owner Considers Going Public

What’s the secret to bartaco’s success? In short, it's simply paying workers more. Staff makes anywhere from $19–30 an hour after tips. That includes back-of-house employees as well.

“If you're a dishwasher and busboy and you're working 40 hours a week, you're going to make around $47,000 a year,” Lawton says.

The longer version of the recipe is a bit more complicated. Lawton says the ability to pay his staff that sort of wage is a result of a few strategic pivots the company made throughout the pandemic.

Like many companies at the beginning of COVID, bartaco fortified its digital presence. When dining rooms reopened, the brand invested in a QR code system that brought customers to an online menu and allowed them to order and pay digitally.

This pivot eliminated numerous touchpoints between staff and customers, creating a safer dining environment, and decreased possible areas of friction, leading to a better customer experience. Perhaps most importantly, it showed Lawton that the need for waiters and waitresses wasn’t really a need at all.

“We added to support staff and we actually added a lot to our salaried staff as well. But we got rid of the waiter position,” the CEO says. “In doing so, we no longer had a tipped employee standing in front of a customer who would become entitled to that tip. So, we were able to take that tip money and create a pool where we were able to share it with our entire restaurant.”

Instead of using the standard system of having waiters rely on tips, bartaco pays its staff at least the full minimum wage before splitting up tips. Lawton says the average wage at the restaurant is $23 per hour.  

“I think people saw how some restaurant groups handled the pandemic and maybe chose that they wouldn't want to work for an employer like that,” he says. “We did a really good job of creating a safe environment for our team and a really fair equitable environment. And when you stack that with a very solid, dependable paycheck, we've become a desirable place to work. We are benefiting from the fruits of that now.”

In terms of supply chain, Lawton says problems with construction materials and kitchen equipment caused delays, but he doesn’t anticipate those obstacles preventing growth.

When it comes to expansion, the brand looks for areas with plenty of disposable income, a younger demographic, and quality surrounding real estate and commerce.

“I don't think it can affect our growth strategy,” he says.  “We just have to be much more mindful of the budget. There's no room for fat in these projects. Now we have to really make sure that we choose our construction partners carefully and that we're holding to our schedules as best we can.”

READ MORE: Bartaco’s Whole-Team Approach to COVID Survival

The positive news coincides with the hiring of Anthony Valletta, the chain’s new senior vice president of operations. He comes to bartaco with more than 20 years of experience and is the perfect fit for the job, Lawton says.

He adds Valletta’s combined experience of working in large and small restaurant groups will prove valuable to the taco brand. Lawton also believes Valletta’s work on technical projects—such as building a proprietary tech stack and helping with digital engagement—is well-suited for where bartaco is headed.

“We run our restaurants like they're locally owned small businesses, but you do need to understand scalability,” Lawton says. “Anthony has those abilities.”

“Anthony is a very intelligent guy who leads with grace but also has really high standards,” he continues. “He has great energy and a lot of excitement for what he does, and that rubs off. Those were leadership skills and traits that were really important.”

With Valletta as senior vice president of operations, Lawton says customers can expect bartaco to be laser focused on details, including food and the overall experience.

While continuing its own initiatives, the brand is aiming to tighten where it can and continue to improve, and he thinks Valleta will play an important role.

“We can expect better guest engagement [with the hiring of Valletta],” he says. “The experience will become better as we get more efficient. Food quality will continue to improve, table service will continue to improve. We can always get better.”