Why Cafe Java waitress deserve 180k salary
This week, a number of people on social media went bonkers about Cafe Javas paying its waiters and waitresses a measly UGX 180,000. To the holders of the moral whip, this was the peak of exploitation, and disrespect. Of course this figure is right at face value, but it only tells half the story.
The real story to be told is that a restaurant business model will always be different compared to other models. What you see in a restaurant is just 10% of its make-up. The 90% is what you don’t see.
I was dismayed when I read profit figures and realized that at Cafe Javas’ best, all they had managed to do was post a net profit of 1.2billion. That 1.2bn doesn’t take care of how much is to go to shareholders dividends and how much will get reinvested back as capital investment e.g expansion, acquisition of delivery bikes etc.
Despite its huge revenues, most of Cafe Javas’ money is being left in overheads. To simplify it, for every UGX 1000 they make, UGX 800 goes to the cost of goods and services. Only 200 makes it to the pocket.
When I got these numbers, I was forced to delve even deeper. A single CJs outlet comprises 110 employees. Of these, 24 are waiters. At this outlet, you will have chefs, cashiers, cleaners, supervisors to mention but a few.
How then does one break even with these numbers? The best model and probably the only model is to do it the Javas style. Instead of treating your waiters and waitresses as normal employees, one is better placed to treat them as business owners.
The base pay of a waitress at CJs is UGX 180K, they get 3000 per day which translates to 90K per month. Coupled to this is the monthly bonus structure pegged to performance. The minimum each waitress gets from this is UGX 300K.
Finally comes the deal breaker, the tips. To understand why CJs went by the tips model, one ought to understand two things. Tips are pegged on service. Secondly, only waiters and waitresses have the privilege of tips. The better one is at their service, the more tips they will earn in a given day. At worst, let us assume one gets UGX 10,000 per day in tips, this translates to UGX 300K per month. Of course you should be scared if you are a waitress in CJs and getting only 10K in tips. It speaks to mediocrity in service. At a minimum, a CJ’s waitress earns not less than 1m per month. We can argue about the pay system, but we cannot argue based on the base pay.
It is the same concept applied to sales representatives in FMCGs. Most of them have a base pay (an assured 50%) and a variable pay based on performance.
Thus the better the service one gives at CJs, the better their tips. This essentially means a waitress evolves from being an employee to a business owner or partner of CJs. In all due honesty, do you think those smiles are faked? Why for example do you have some of the lowest staff turnovers?
When one graduates from being a waiter at CJs, they become a supervisor. As a supervisor, there are no tips. The entry salary for a supervisor at CJs is 1.5m per month with UGX 6000 per day, a meal of their choice and extra pay from the monthly bonus scheme.
The hidden staff is a long story altogether. The baristas, the chefs, the cashiers. The entry salary of a cashier is UGX 800K. The average salary of a chef is UGX 5m. Now these are the people you really want to pay well. Because if you chefs become dissatisfied, then food quality will go low. Before long, you will have no customers, before long the 3000 employees at CJs will have no job. Behind the scenes you have the food delivery guys, the procurement team etc. The hard fact is, the actual guys doing 90% of the work are behind the scenes.
So suppose CJs decides to pay its waitresses a minimum of 1m per month. How much will it pay a supervisor? A chef? A barista? The pay model CJs has is the most efficient and most reliable.
I write all these numbers to bring one to the appreciation of a restaurant value chain. A restaurant is probably one of the hardest businesses to run. For one simple reason, the cost of running one. To imagine that each branch of CJs has 110 employees is ridiculous. Any business owner would have to be extra careful about the salary structure in such a setup.
To the moralists, the virtue signallers, I want to ask; “if you think CJs pays its waitresses too little, what is the basic minimum they should be paid? What is the role of a waiter in the value chain of a restaurant? What percentage of value do they bring to this chain? 90 percent?
What is the current industry average pay for waiters in Uganda? Why are waiters not leaving CJs and opting for better options assuming they exist? What explains the consistency in customer care? Why have ‘better paying’ businesses not achieved the same?”
We can argue all we want but a study of a restaurant value chain will always disprove your emotions about waiters’ pay. Waiters comprise just 10 percent of the value chain.
That said; I look forward to an alternative waiter pay model that will deliver the same results!