Matchmakers

Can Platforms And Payments Solve Restaurants’ 73 Percent Turnover Problem?

Good waiters are hard to find. According to the Bureau of Labor Statistics, they are even harder to keep, as the restaurant worker turnover rate is 73 percent every single year. This was a problem that Ron McCulloch, executive chairman and co-founder at Jitjatjo, decided he wanted to solve after decades in the hospitality space in Europe, Australia and the U.K.

 

The chronic churn isn’t new. During his 30 years of working and running venues, he noted, it has been an endemic problem. However, in recent years, particularly with the rise of gig marketplaces, it’s become even more of a drain in the industry.

“I felt that combining technology with this problem could be a real help and a real service to the industry,” McCulloch said.

The technological solution he eventually came up with was Jitjatjo, a platform that offers hospitality industry players — of all shapes and sizes — access to a stable of skilled, vetted, tested and profiled hospitality professionals. They can be booked for as little as one hour and for as long as two months, with all manner of customization in between.

In a sense, McCulloch told Webster, it looks like many gig work platforms out there (the term “Uber for restaurant workers” has come up more than once). While the comparison is apt in some ways, it misses much of what sets Jitjatjo apart, starting with the fact that it doesn’t have gig workers on its platform at all, but employees.

Picking Professionals

To go with 1099 or W-2 workers, McCulloch said, was actually one of the foundational questions the firm had to answer within its first six months. The company was aware that many big things were going on with that 1099 model at the time, but ultimately decided that W-2 workers would be both easier for the firm to manage and important in developing the offer it wanted to make to its hospitality operator clients.

“In the early days,” he explained, “we picked the W-2 model because we knew it was important to look after the whole process of doing temporary work on an ongoing basis. The commitment we make includes the talent and the operator community, and what we can do to empower good work. It is very important for us to have vetted the talent properly so we have productive workers available on the platform when our clients are looking for them.”

Restaurants and hospitality are specialized segments, more than most people know, he said — and there are various skill and operational capacities, like knowing how to use certain machines that are mission-critical to keeping services up and operating.

What Jitjatjo clients most want — whether they are an individual proprietorship coffee shop or a 50,000-seat arena — is staff that can walk in the door (mostly cold, with minimal explanation of local customs and quirks), and get up and running in minutes. If the firm doesn’t offer that, McCulloch told Webster, its offerings aren’t doing these organizations any favors. That means the first layer of vetting is to make sure people are walking in with the right skill set. That is not the only layer, though: The technology must go further.

“Hospitality is a broad sector, and a dish washer who is used to a small space might freak out in a stadium. We also have to develop personas of our staff and operators’ clients so that the skills and the environment are a match. One of the classic errors staffing firms and apps make is they don’t go far enough into the persona of the talent or the client,” he said.

Better matches mean fewer surprises, operationally speaking, and that is strongly preferred by clients — even as their client portrait is shifting.

Meeting The Diverse Needs Of Hospitality

Given that hospitality is such a wide and varied space, Webster wondered if Jitjatjo found a market sweet spot in the industry — in terms of size or vertical — that stood out above the others. McCulloch noted that, though it literally runs the gamut when it comes to operator sizes, the composition of the firms it serves has shifted a lot. In the two and a half years that it’s been in the market, it has seen its lineup of operators shift from 80 percent small businesses (SMBs) and 20 percent enterprise-level firms to the exact opposite: 80 percent enterprise and 20 percent SMBs.

As for the types of orders it sees, again, the firm runs the gamut — though it does vary by size. Situations that would qualify as emergencies would be, for example, if the dish washer called in sick an hour before their shift, or if the head waitress eloped and wouldn’t be back for two weeks. Larger operators, stadiums and corporate functions, on the other hand, tend to be high-volume, high-skill, short-duration events that need large-scale staffing of all kinds.

As a draw to the talent side of the platform, Jitjatjo pays well. Workers can make up to $30 an hour, and those payments are, by and large, offered instantly to workers when their shifts are completed.

“When we first came here, no one was doing [instant payments], including the big guys, and it seemed like such a natural add,” McCulloch told Webster, noting that it was also a complicated offering at the time — an offering that workers, in some sense, need to earn. Instant Pay is only available for workers who show up on time, and who get positive reviews from clients when their jobs are done, he noted.

Jitjatjo offers its clients a variety of ability levels from which to choose, depending on what skill level they need. The firm also offers access to solid, outstanding and epic workers, depending on whether clients need to be assured that their “minds will be blown” or if their sights are set somewhat lower.

“From our point of view, there is also a progression in our platform,” he said, “so that servers can move up, depending on how they do and are reviewed.”

Changing The Hospitality Model

One of the great difficulties of hospitality as an industry is nailing down staffing properly, because the industry is known for having peaks and troughs. The only way to manage that, McCulloch noted, is to be slightly overstaffed, which is inefficient and not even guaranteed to get the job done.

“This opens up a different way of thinking. We have had clients that were actively trimming down their event offerings, because they couldn’t be bothered with the hassle of staffing them, that are now turning up this part of their business,” he explained.

Today, Jitjatjo is open in New York, D.C. and Chicago, with plans for expansion to Philadelphia “very soon.” The challenge, as is the case for most marketplace businesses, is to make sure its supply of talent keeps up with demand, which can be substantial and unpredictable. It has succeeded in that endeavor so far, with a lot of internal referrals bringing new workers to the platform and the savvy use of social media recruiting others. Moreover, he noted, Jitjatjo is the beneficiary of changing trends in the labor market, as workers with skills are preferring greater self-determination.

“There seems to be plenty of people out there to come into a trusted platform, to be offered jobs when they want and are available, which is all logged by the technology itself,” he said.

There is also an expansion of the services coming soon, offered through the platform and “other advances” that are designed to make Jitjatjo an even more attractive platform for talent to come work on, so it can continue growing strong.

Jitjatjo is a slightly unusual platform — down to its unusual name. It’s memorable, though it has heard many pronunciations in its early days. However, different is good, he noted, because different is exactly what it wanted to be.

“We didn’t want to get pigeon-holed into a shift company or a gig company,” he said. “We wanted to stay away from that, and create an environment and an ecosystem that lays a foundation so that people on both sides of the platform can trust what is going to happen.”

Plus, Jitjatjo is a fun name to say. Any other explanation of how it picked the name, he noted, is a strict company secret.

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