The Pre-Shift
Great teams make great restaurants. On The Pre-Shift, restaurant operators and industry experts dive into what it takes to build great restaurant teams. We explore their stories, the strategies they use, and valuable lessons on running restaurant teams. Hosted by D. J. Costantino. Presented by 7shifts.
The Pre-Shift
Can open-book finance work for restaurants? | Ji Hye Kim, Chef/Owner at Miss Kim | 041
The Pre-Shift Podcast presented by 7shifts is a deep dive into what it takes to run great restaurant teams.
Host D.J. Costantino covers the restaurant industry with conversations featuring industry leaders and innovators sharing their business growth insights, backgrounds, and valuable lessons on running restaurant teams.
On this episode, we’re joined by Ji Hye Kim, Chef/Owner of Miss Kim in Ann Arbor.
Ji Hye was awarded one of Food & Wine's Best New Chefs in 2021 and a multi-time James Beard Award semifinalist. She also advocates for fair wages in the hospitality industry, working with organizations like One Fair Wage to enact change. We get into how staff are paid above the industry average at Miss Kim, the tools Kim uses to get her teams engaged, and more.
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Credits
Host & Producer: D. J. Costantino
Producer: Samantha Fung
Editor: Fina Charleston
About 7shifts
7shifts is a scheduling, payroll, and employee retention app designed to help restaurants thrive. With an easy-to-use app and industry-specific solutions, 7shifts saves time, reduces errors, and helps keep costs in check for more than 50,000 restaurants.
We didn't want a complicated system and we didn't want any hierarchy, because this perceived hierarchy that you put in between positions or whatever you make up it, makes things complicated, difficult to understand. Everybody needs to understand how they're getting paid.
Speaker 2:Hello and welcome back to another episode of the Pre-Shift podcast where we dive deep into what it takes to run great restaurant teams. I'm your host, dj, and today I'm sitting down with Ji-Hae Kim, the chef, owner of Ms Kim and Arbor Michigan.
Speaker 1:My name is Ji-Hae Kim. I'm the chef and managing partner at Ms Kim Korean Restaurant in An Arbor, Michigan, where we're part of Zingerman's community of businesses.
Speaker 2:Ji-Hae was awarded one of Food Wine's best new chefs in 2021 and is a multi-time James Beard Award semi-finalist. Kim is also an advocate for fare wages in the hospitality industry, working with organizations like OneFairWage to enact change. We get into how staff are paid above industry average at Ms Kim, the tools Kim uses to get her teams engaged, and more. As always, the Pre-Shift podcast is brought to you by SevenGives. Ms Kim is a part of the Zingerman's community of businesses that began as a single deli and now includes nine businesses across An Arbor employing more than 500 people. Each of the businesses is co-owned by Paul Saginaw and Ari Weinfacht, the founders who co-own businesses with managing partners like Kim. What this means for the restaurants in the group is a set of management frameworks that enable strong, engaged teams A la Ji-Hae. Tell you more.
Speaker 1:We have some great tools. So in big things, we do things like open book finance or we did away with tipped minimum wage, because that's set up to be sort of an uneven pay system, depending on which department you work in. But in a smaller way, it comes down to frequent communication and creating an environment where you feel safe enough to come up with your own opinions and feedback. So some of the things that we do after every shift is this thing called like best next time, where a person leading the shift just poses a question to everybody who's there what was the best thing that happened during the shift? Well, what did you think that you did really well? And then we have a discussion and then we follow by what do you think could have been better? What could we have done better?
Speaker 1:So then we're sort of like providing that structure to have a conversation yeah, and everybody can pitch in to have the conversation, and it takes a little bit of practice. That's why we have to do it every day and it's actually it's been the tool that I use the most often and I find it super useful and it's also easy to train, to have your staff do it on their own, and it does so many things. It provides a place for people to speak up, but it also provides more full, full round feedback, not just focusing on just positive or just negative. So sort of breaking that idea of good and bad, positive and negative. That binary conversation gets broken down and then you get more context because you have more voices in the room. So that one I'm really proud of.
Speaker 1:And then we meet weekly to discuss how we're running our businesses and that's where we discussed the numbers for open book finance, any updates, any changes, and understanding that our industry is not it's not an office based industry, so people learn information differently. So we have meetings, we have weekly meetings, we have emails, we have in personal announcement it's posted. So like understanding people's diverse need of communication and then trying to meet that. So I think it's important for us rounds.
Speaker 2:Best next time is more of a framework for conversation that managers and leaders can use. It's not framed as reporting, it's not written down, but rather a group conversation starter. If there's something of particular significance, manager may include it in the shift notes, but the beauty and effectiveness is that it's casual.
Speaker 1:Yeah, this is a tool that I recommend everybody trying it out, just because you know it starts with. You know easy, good things, so get people open up to talk about it and then anything that was tough or challenging that could have been better. It's presented in a way that what could have been better for next time. So it's not just here are a bunch of negative things that happened, it's it also sort of like in that simple sentence is built in like let's actively think about each one of us what we could have done better for the next time. So it's actually very action oriented, even though it's it happens at a deep rate.
Speaker 2:Another one of the tools is open book finance. Now, we've chatted about open book finance on podcasts before, but Kim has her own unique perspective on it. It's something that's done across the Zingerman's community of businesses, but when it came to miss Kim, she had a challenge. Her staff just wasn't all that interested at first.
Speaker 1:My experience is that, like I had to like really try to get them to be engaged enough for them to say, like hey, can we see a cash flow? Like they're not that interested. So for us, like every single piece of information is open, it doesn't mean it's displayed at all times, every single number. There's numbers that there are numbers that we talk about the more. And then there are numbers that are not. Like it's available if you ask. So like that, for example, the low numbers or cash flow numbers, those are available if you ask, but people just are not that curious about it. And then what we have available and discuss weekly is the stuff that goes into a profit and most statement more.
Speaker 1:So we I mean, when people first try to do open book finance, I tell them like the fear that we have as owners is that people are going to see our bank account and like go like oh, we're totally underpaid, you're making bank.
Speaker 1:But the reality for most small businesses that we are not making bank, like the staff are more surprised how thin the profit margin is, more than like how much, how much. Like they think that we're making, like I've heard step one like that's all we're making or we're actually not making profit at all. That's more of a common response than like we're making so much money and you're taking advantage of us by not paying, like $70,000, $80,000 a year for part time bus boy position, like that's just not what I hear and so like you can. So what I would say is that you can make the numbers available, but I think you need to work on, like the, the, the owners and leaders need to work on their fears first, because those are fear-based assumptions, I think, and so, but like having that set, setting that aside, open book finance, the key for me that I know is that you want to discuss the numbers that staff can have meaningful impact on, because otherwise it's just, you know, you're just discussing numbers and it's not that interesting.
Speaker 2:Kim also stresses that time is a key ingredient in successful open book finance. It's hard for it to matter in the early days, but as your business grows and the data is more robust, provides more opportunities to engage the team. There's just more to see and understand.
Speaker 1:The restaurant has been open for seven years and it's only very recently that I feel that open book finance practice is really working. Because when you're starting from scratch you have to build the culture of feeling comfortable talking about numbers and Understanding what numbers we're talking about. And so like that, going into that kind of practice and like earning people's trust that they can speak freely In a safe environment, earning their interest by getting them engaged those things are bigger in some ways. And just talking about numbers because we're talking about culture shift.
Speaker 2:One way that Kim fosters a connection between her team and the numbers. The impact is another tool called gross games. It sounds like a fear factor spinoff, but we're talking about gross sales. Net games just didn't have the same ring.
Speaker 1:Now I am focusing on Really getting people to understand, connecting their experience for that shift with a number. So every day, at the end of the day, we do this thing called gross games, where I pull out once all the checks are in, I pull out my my phone where I get the report, and I say everybody gets to ask one question and then we're gonna take a wild guess what our gross sales was for today. We chose gross because gross is the number that you're working for. So if somebody yeah, somebody got a huge discount and that makes the net sales go down, but gross is the number that you were, you still serve that, that them a full plate of fried chickens. So in gross games has a better ring than that in that games, yeah.
Speaker 1:So then all the step will ask a question and then they start thinking about what questions to ask. So they ask things like how many heads did we have? How many heads did we have last Saturday and what was the sales last Saturday? How much takeout did we have? How, what was the most popular item? Like, what was the most Like busiest hour and what was our sales during that hour?
Speaker 2:or like.
Speaker 1:So they'll add like I didn't work lunch, I wouldn't you worked in our how was the lunch sales. So they'll get those informations and then this they'll start making educated guesses and then each person will say I think we did eight, nine or eight, four or yeah.
Speaker 1:So everybody takes a guess and if we ever gets the closest, gets a free entry on the house, and that's time they work at their time of choosing. So then it makes it fun. I'm coupling that with the weekly weekly staff meeting where we talk about numbers in general, so trying to make the numbers a little more fun and also To make it real, like it's not just spreadsheet or bar graphs, it's actually real, like you felt that it was a $9,000, was it really $9,000 day? So that's been really fun. Yeah, and then and then we're gonna slowly start working on like let's, let's try make like selling the bottles of wine. Anybody orders more than two glasses of wine. We're gonna recommend selling a bottle instead of two glasses and that trains our staff to be better salespeople.
Speaker 1:And and one thing about Miss Kim is that we are one fair wage restaurant, so everybody gets paid Above minimum wage, close to living, like, close to like it's it's not serving, it's not tipped minimum wage to cycle regular up way above minimum wage. And then it's a tip share restaurant, which means that the servers are working really better as a team, but they're not necessarily paying attention to the sales number or the tip amount as much as the traditional setup servers from the traditional setup and they may not think about increasing the average check sales. But this way we're having a little fun. We're increasing awareness of average check amount or average dollar spent per head and then making a game out of like training salesmanship and then making them feel like they are actually really capable of selling and making a difference.
Speaker 2:Just taking a quick break to share an exciting update from SevenShifts Now. Usually I don't do this, but it's something our users have been waiting for for a long time. I know that. I don't have to tell you that running payroll is a lengthy manual process Talking data entry, multiple systems, cross referencing, triple checking so I'm excited to announce that SevenShifts payroll is now here and available in the United States. Now you can schedule your employees, manage the time clock, calculate tips and pay your team in one app, and when you make the switch to SevenShifts payroll, your first three months are on us. To learn more, head to SevenShiftscom slash. Make the switch. Now back to the show. As Kim mentioned, ms Kim is a one fair wage restaurant. One fair wage is a group that aims to eliminate the lower tipped minimum wage through advocacy policy and public awareness, and Kim is walking the talk at her restaurant.
Speaker 1:We've tried a few different iterations and it's less challenging now, but when we started it was very challenging. So what we settled on and it works well for us. And when I say it works well for us, I think it's very specific to where we are Michigan and Arbor, college Town, etc. So we do base pay plus tip share. So base pay is anywhere between 12 to 14 to $15, depending on their tenure, quality of their work, different levels of responsibility and then tips gets pulled once a week and then it gets divided by the number of hours you worked. So if you work 40 hours and I work 20 hours, then you get twice as much tip than I did. But if I had way more responsibility like I was trained in every station and I was doing baby projects or I was in charge of making sure everybody does checklist, for example and I've been there for two years then my base pay would be higher than somebody who just got hired. We designed it that way because we started out as a no-tip restaurant, so we had higher wage, no tipped minimum wage and refusing to accept tips. And then we realized that people kept wanting to leave tips and we had complaints about people not being able to leave credit card tips. So philosophically I have a lot of reservations about tipping system in general.
Speaker 1:I think its root in slavery is, at this point, well publicized and talked about. But that's on a macro level. On a micro level, I thought if my staff are going to make $1, $2, $3 more an hour, like when am I to stand in the way of that? So when we started accepting tips, we had a conversation in a staff meeting and I asked the staff how would you like to divide tips that comes in? And the things that came out of that meeting was that we wanted it to be easy to understand. We didn't want a complicated system and we didn't want any hierarchy, because, like a dispersevered hierarchy that you put in between positions or whatever you make up, it, makes things complicated, difficult to understand. Everybody needs to understand how they're getting paid.
Speaker 2:One of the challenges to the movement is that every state has its own laws regarding restaurant minimum wage and how tips are collected. Michigan has its own unique spin and that requires some adjustments on Kim's part.
Speaker 1:So Michigan law states like no salaried manager or the house can take the tips because we're doing tips and not service charged. And so the credit card other than credit card processing fees for using the credit card terminals everything gets goes straight to the staff and it's divided by the number of hours worked, because everybody saw in the paycheck how many hours they worked. I see yeah, and then all the other differences will come from the base pay. And then it gets divided by week and then gets paid per pay period. It shows up in the chat clearly what your base pay was for week one, what your tips were for week one, and then what was for base paid week two, and then tips week two. That works well for us. And then we do that for both front of the house and the back of the house.
Speaker 1:Okay, so what ends up happening is that our front of the house and the back of the house they get along super well. Good, there's, yeah, there's. I mean there is a physical divide just because back of the house is in the kitchen more, front of the house is more in the front. But other than the physical working space, the team feels like the team is the team. It's not like a divided house in that sense and it's also easier for me to talk to cooks and train the cooks. It doesn't just stay at front of the house because they're the ones directly dealing with guests, but I can talk to the cooks and say when your spec is not up, like up to where we want it to be, or when you change the portion sizes to a point that it's very inconsistent, that impacts the guest experience and you have to care about the guest experience. You should care about it regardless. You like have now more direct connection to it because half your paycheck comes from the tip.
Speaker 2:See what you're saying. So what is back of house getting tip share versus front of house? Is it all equal?
Speaker 1:It's all equal. So base pay for both front of the house and back of the house is 12 to 15. And tips gets divided by the same same just number of hours, no hierarchy depending on, no different portions depending on the position or the department. So it gets straight up divided the same way and that adds about $9 to $10 an hour. Some rarely goes up to 11, but those weeks are when we're short staffed or we're hit with something big surprise. It's surprised. It's actually very consistent, like it's in that range pretty consistently. So once you get over the fear of having some of your pay to be a little more fluctuating, the fluctuation is small enough that your pay is actually fairly consistent. And you couple that with like our HR is through Zinermans, so you couple that with the benefits that we offer that medical, dental, vision, health savings account, like pay time off, it rounds out the compensation package pretty well. Like I wish we can do more, but we are doing the best we can for now and I think it's way above industry average for now.
Speaker 2:Kim also puts a big focus on guest education when it comes to tips, wages and overall staff comp.
Speaker 1:We didn't go back to tip minimum wage but we did have to make a lot of changes on, like anything, guest spacing on our website, on our menu, on the credit card slip, so, and we had to educate our guests and educate the staff on how everything's done, and that was pre pandemic and then we haven't really made any changes after that. It's like compensation and path to higher wage has been the same and how we once we decided to take credit card tips. The systems that we set up then is the same system that we use. But like it was agonizing conversations when we were making those changes and then also during in the middle of it, we briefly considered service charge during the pandemic when we were all take out only, but we decided that a you know, tip share is working for us. If I were to open a brand new restaurant and do it over and it happens to be full service then I may consider service charge.
Speaker 1:You have to think about pros and cons of doing service charge instead of tip share versus not taking tips or service charge at all. I think not doing tips or service charge is very challenging. I think it's the most challenging. Probably in most states. Service charge is more and more common and, like, the pros of doing service charge is that you can sort of you have more freedom in deciding how to use that service charge that's been collected Tips if you call it tips, then it's going straight to the staff, but if you do service charge, then then you pay taxes on them. It's not a direct transfer to the staff. Yeah, so those are pros and cons For me.
Speaker 1:I ultimately decided that I don't want to do service charge, I want to do tips, because I want it to be really transparent. I didn't want to sit there in my office at the end of the night going like, oh wow, we got, like you know, $10,000 this week in service charge. Maybe I will divide it up this way or that way, and I just didn't. I felt kind of odd about it and the way that we had set it up was working fine, so why change it? So we didn't.
Speaker 2:All of this contributes to study retention at Ms Kim and the Zingerman's community at large, but Kim contends that there's still a lot of work to do across the industry.
Speaker 1:Retention. It's a challenging thing because I think it's an industry-wide issue that we have to address, because people may think of a restaurant job as like a summer job or part-time job, but they don't think of it as career. And I think that's the inherent problem in like having difficult time hiring people, because they don't want to stay long-term, they don't think of it as career, they want to move on to next things. So for me, for my restaurant, the most I can do is, again, it's a lot to take on for one restaurant At least an industry-wide awakening and changing. Because if people think that Zingerman's doing like a revolutionary work by providing health insurance, then we're really behind, really behind, like that should be basic, not like something that's extra, that you're doing for the people. That's a basic level that the employer should be providing in the United States.
Speaker 1:So for retention, what I do is I try to create safe environment, I try to empower people and all like talking about the open book, finance and systems and having people be able to have their voice. Those are all I think going into retention. Some of it is like something I cannot help Like. Ann Arbor is a college town, so we see a good amount of change over at the end of semesters when summer breaks start, and then at the end of summer break when people do move on or new students come and they're looking for a part-time job. So the most I can do for retention is to let everybody know that it's okay that we talk about our personal long-term goals here.
Speaker 2:Going to next year. Kim is continuing to do the good work at her restaurant. She's also working on a cookbook, as well as partnering with Ingemen's to do food tours in Korea.
Speaker 1:Ingemen's food tours and I partner to take people to Korea and then we're going to experience the Korean food and the Korean countryside Like you don't see in Netflix TV shows on Korean dramas like Squid Games.
Speaker 2:Kim is also working on a benefit for raised high-road restaurants, Another advocacy group for fare wages and increased racial and gender equity in restaurants. So next time you find yourself in Ann Arbor, be sure to pay Kim a visit at a restaurant miss Kim and check out the rest of the businesses in the Ingemen's community. Thank you for checking out this episode of the Pre-Shift Podcast. If you enjoyed this one, leave a review and share it with one friend to help the show grow. We couldn't do it without your support. As always, I'd love to hear what you think. You can email me at djats7shiftscom. You can also find more great insights like these on the Seven Ships blog and across all of our social channels. Catch you next time.
