Anthony Valletta has had an extensive career in the hospitality business. He started out at Darden Restaurants and has worked in executive leadership roles at Del Frisco's, Michael Mina and Birdcall before joining Bartaco in 2021. He joined us on the Pre Shift podcast to chat about Bartaco's embrace of tech, their unique approach to training and career development, radical wage structure, and how all of those practices have them poised for growth in 2023. But first, Anthony tells us how the industry has changed during his career:
“I think there's two components you kind of look at. I think the one is the internal side, the employees side, is that the things that are driving people to restaurants to want to work in restaurants, to be proud to be at restaurants has changed so much from years ago. Whereas before it was who's going to pay me the most money? And now we're starting to get a little bit more of the purpose driven, of what do you stand for? What does your brand mean? How is your brand involved in the community? What is your brand doing to give back? Or what are your green initiatives? I mean, the questions that are being asked by our staff are incredible but very, very different. So people are actually looking to be a part of brands they can associate with, that they resonate with and that they're proud to say, "It's not just I work there, I work there because."
I think that's really powerful and means a lot for internal brand. I think on the external side, what's interesting is I think one of the benefits of [the pandemic] is that people were really exposed to how hard the business is to run. Years ago people just took advantage of the fact that the waiter was there and the food showed up on the plate and they didn't really look at the inner workings of how hard it is to do our day-to-day. And with [the panemdic], with the mass exodus and restrictions, I think people started to understand how multi-dimensional our business is. And because of that, they became a little more lenient in certain aspects, but much more value driven now than ever because they were so exposed to it. So I think [the pandemic] had a little bit of an impact even before that. I think there's been a very big change in landscape of how we're recruiting and how purpose driven restaurants need to be versus just selling an experience.”
As those changes were taking place and as the restaurant industry shifted, Valletta found himself drawn to what the team at Bartaco was doing.
“Yeah, I've always been admiring from a distance, the Barteca brand when it was Barcelona and bartaco. Yeah, they were pioneers in a lot of ways of bringing tapas food to the States before it was really a style of dining. The first ones to really do elevated street food in a taco setting, in a full-service environment. Just the culture that was built there, I always kind of admired and emulated some things they'd done from afar. During my time I had a chance to work with Michelin chef and time to work with a tech kind of leading QSR and then the behemoth of the steakhouse with Del Frisco's and saw so many different avenues and Bartaco kind of took my last three experiences as an executive and put them all into one. It's tech-forward, employee-facing, high-quality product that's on a growth mode, that's really challenging the way that we do things in the restaurant business. So to me, I was excited to be a part of someone changing the game versus just one just staying in to play.”
Now that tech-forward approach is one that many in hospitality are gravitating towards, no doubt spurred by the pandemic influence. QR codes became mainstays in restaurants, surprisingly. We're ordering and paying on our devices using kiosks and tipping via tablet. But technology can find itself at odds with a warm, inviting guest experience. Bartaco, however, takes that challenge head on.
“I think the key is for us, there are synergies, but you need to be very careful how you utilize them. If you utilize tech at face value, a lot of times you get that kind of disparity between putting the guest or employee first and being tech-forward and having robots replace people and things of that nature. I think for us, we look at it as what are the opportunities and what are the companies we want to partner with that are excited to find a way to blend those two worlds together. And we partnered with OneDine to do our on-demand hospitality. The real key was that was what we were trying to solve for was how do you create hospitality with the integration of technology together, not how do you replace? I think so many times in the industry it's exactly that. It's used to replace something in hospitality versus how do you enhance it.
So everything that we've done, whether it's the front of house the guest facing from OneDine, things of that nature, our wait list, our application, all those things and even behind the scenes using things like a 7shifts and rolling out a KDS and finding ways to also incorporate technology that makes our internal guests, our staff, feel elevated. I think that's the challenge. So for us, we take a challenge head on and we never look to replace and if something is going to replace the human element and not give us time back to enhance it. The whole point of our QR code dining is that what it actually did is it allowed our staff to engage more with the guests than they did before.”
But, that kind of heavy investment in tech doesn't exactly come without some challenges and in some cases a little bit of resistance.
“Now it's post-pandemic and the challenge is, okay, [the pandemic] is over, why is this still here? And to us, it happened during [the pandemic], yes, but wasn't a replacement. We leaned in and said, "Hey, there's more here. We can create a better experience, a better atmosphere, a better vibe by giving our managers and service leaders a chance to have more time to create the environment than they did before." So that's always the struggle and obviously early adoption, the first UX/UI was not great and it was janky and it took nine steps to do something that now it takes us two so we're constantly evolving. Nothing's ever easy in a rollout with any type of technology as we all know. We've had amazing partners and we've kept a really open feedback and we worked really fast to make those adjustments and take as much feedback from our guests and staff to enhance the programs we're using today.”
Despite these challenges, though, Bartaco's embrace of technology has had an overwhelmingly positive effect on the guest experience. But as Anthony mentioned earlier, there is an equal amount of revolution happening on the employee side of the restaurant business. Even now, we're still hearing about the labor shortage in hospitality. Hiring is harder than ever and restaurants have set themselves apart to become employees of choice and Bartaco is leading with charge there too.
“Even before [the pandemic], we were looking at finding ways to enhance the overall package for all of our team members, whether that was a 401(k)match or the other benefits, the frill benefits, if you will, that are exciting people. But for us, we really leaned in to things I mentioned earlier: what is it that our new employees are looking for? They're looking for places that are going carbon-neutral, which we did. They're looking for places that are environmentally conscious, which we're doing. They're looking for a lot more of what is commonly referred to as soft skills, but we consider them just the skills to do the job. We invested in a platform called Giant and created something called Bartaco Leadership Academy. So every salaried employee in our company has a form of executive coaching and that coaching is done not about how to manage Bartaco, it's about how to manage yourself, how to know yourself, how to lead yourself, how to be a better person at home and at work and wherever else you may be.
We started leaning into a lot more of the purpose driven and developing the person themselves versus just, "Hey, we're going to pay you five grand more." We always pay at the top on this, that's I think right now that's not really even getting in the table. I think it's like the seventh on the list of reasons people are looking for jobs where it's falling by the day. Still want to make sure we're taking care of someone financially so they have time to obviously enjoy their personal time but to us, it's about purpose. It's about finding those things that are really impactful in the restaurant that we can do that make them feel a sense of belonging and community and we've leaned into that every day. We continue to lean in on that to find more enhanced ways to have it be more of a well-rounded program, not just a restaurant program. And that's led to us being in a pretty solid spot for staff.”
The linchpin of Bartaco's employee experience is that training, the key difference being that they're helping their team be the best versions of themselves and not just better at managers or employees at Bartaco.
“Right after I joined, they had already been talking about finding a development program, coaching tool for not the hard skills, the soft skills, which are really the necessary skills to be a leader. And I had worked with this platform, Giant in a previous life, kind of brought it to fruition, and then Scott [Lawton], our founder and CEO, took it to the next level and said, "This isn't just for our directors and above, this should be for everybody. We should be doing this all the way down to the assistant managers and service leaders and sous chefs." And we knew that that was really going to change the landscape, that if we really wanted leaders and not managers, that we needed to have that as part of our DNA, part of our culture.
So we saw the early need for the investment and the return has been amazing. I've literally heard from people, I was just in our store here in North Hills in Raleigh, North Carolina, and I had one of the people that's in the program look at me and say, "It literally changed my life. I've changed the way I think about things. I've changed things with my husband." These stories are remarkable. And it's not about being a better person at Bartaco, like you mentioned earlier, DJ, it's about being a better person for yourself and a better leader and those skills are transferable to whatever you do.
So yes, we saw the need in really developing people, not Bartaco managers. So we saw that early on, and now as we go into 2023, we just set up a partnership with a company called 1Huddle to enhance our LMS. And I really think that the way we are going to really enhance your learning platform is the way that we receive information now, which is through Twitter and Instagram and TikTok. It's short snippets, quick right information, very, very kind of fast downloads. So we're also trying to adjust the way that we teach and the way that we use the information into a way that resonates better with our employees and our leaders and our managers.
And that's a huge component. And this Giant program that we use, one of the main reasons we picked it is that there's a lot of great platforms out there, but they're what I call a blanket approach. Like you teach one thing and everybody takes something different because we all have a different lens. This program actually understands your LMS and teaches you custom to the way you see things from the outside. So it's a really customary approach. I think it's the way of the future - you've got to realize that we have such a dynamic leadership diversity in today's management world. And if we think we can give one system the same across the board, we'll fail. And we're really excited to continue to lean into ways we can diversify our training.”
bartaco also has a wildly different approach to career pathing than most restaurants and adapting of sorts to the younger generation's expectations of clarity and quick turnaround. The Uber generation, if you want to call it, just young people and young generations that are used to more instant gratification than previous ones.
“We kind of looked at a response of saying, "Let's make sure people understand what that path looks like," the fact that it's accessible, find those people that have done it well and emulate that behavior. And we created this new position called A Service Leader, which is this kind of hybrid server-manager role where they're still working on leadership skills and managing the building, but they're responsible for leading service on a more intense level than a typical manager may be. We wanted them to see like, "Hey, how do they get from that position to my position," and everything in between. And we've created these stair steps basically of here's the next step for you. Here's the things that we're going to provide you to give you education and support and challenge to get to the next level. And then at that level, here's the next step. My team jokes I use an expression and say, "Only dangle edible carrots," so like I'm going to put something in front of you, but you can actually eat it. It's not this one that just keeps moving along.
What's kind of the thought too there is, "Hey, we're going to tell you what's next and what you need to achieve it," and when they do that, we're fortunate with the amount of growth that we have that they're actually able to take that job on. Whereas some companies it’s stagnant. It's hard to say, "Well, I got all this done, now what? Well now you got to wait until somebody quits, retires or gets fired." Well, that's kind of hard. For today’s generation they don't want to hear that so we're fortunate in that aspect as well.”
Not everything that they tried was a success and it took a little bit of trial and error in learning from employee feedback. One instance of that was a match 401(k) offer that wasn't as successful as they had hoped.
“The adoption rate was much lower than what I would've expected. It's staying, it's sticking, the people that are there obviously appreciate it and we're working on the education side of understanding, "No, this is actually free money. It's real. It's not a commercial right at the end that we're talking pretty fast." But that was a surprising one, especially in today's landscape.
While the 401(k) match wasn't a big winner, Bartaco has addressed comp from another way, with an innovative wage structure where every hourly employee from the kitchen to the dining room gets paid the same wage and tip percentage effectively equalizing comp across the board.
“When we adjusted to the new model where we created this new position of service leaders, we also adjusted the model in the restaurant so everybody makes a living wage. So across the entire company, every single, sorry, the entire location, every state's a little bit different based off minimum wage requirements. But everyone in the restaurant, no matter your position, if you're a dishwasher, a host, a busser, a food runner, a line cook, you all make the exact same base wage. There's zero differentiation whatsoever. So the idea behind that one is that now there's no argument of people being paid differently for any type of reason, whether that's because of experience or ethnicity or age or beliefs, it's all gone. Everyone is exactly the same. And then the tips that we collect are evenly distributed to every single employee as well. So there is not one person in the restaurant that makes a penny more or less than anybody else.
The bartenders eat what they kill, if you will, so they're their own island as they should be, but the rest of them, line cooks, back-of-house, in-house is all the same. They all make the exact same dollar amount across the board. And we're being able to pay somewhere between 20 to upwards of sometimes 40 hours an hour in peak season to these employees. And we all know for the longest time that the back-of-house employees have been underpaid for decades of the restaurant business. They're the hardest working people. The dishwasher has always been the lowest paid person and they're the hardest working, hardest job, most impactful job in the entire restaurant and arguably sometimes the most undercompensated. So now that employee's making the exact same amount as the tenured line cook.
And what it's done is a handful of things, is one, we're able to provide an amazing living wage. And we had a story that came from one of our employees that was actually able to quit his second job that he was working because he was making so much with us and that allowed him time to spend with his family. And to me, that's what it's all about. That was just literally the magic formula. And additionally, the kind of unintended benefit is the teamwork in the restaurant is now remarkable because two things have happened. One, there's no more, like one job is higher or lower than another. There's no more hierarchy of people believing that that's the aspirational job. Every job is as equal across the board.”
The move was done first and foremost with the intention of elevating wages across the board and providing a livable wage to every employee at Bartaco. But the structures also had some interesting additional effects on the management side.
“And secondly, and this kind of happened over time, and we didn't really intend for it, but it was a great benefit to us is like our labor model started self-managing. The stores that realize the benefit of if we have less hours in the pool, I make more per hour. So if I'm standingworking next to D.J. and he's not holding his weight, I don't have a problem calling him out. Because he's taking money directly out of my pocket. And when we started to hear these conversations, we were actually enamored. We never thought about it in the beginning. It was always meant to be a way to elevate wages, make a living wage, and have the pay be equal across the board. But now we're seeing the staff kind of build this culture internally of like, "Hey, this guy's not pulling his weight. We can do something here." And it's been amazing to see what a positive impact it's had on the cultures that have adopted the program.”
Now when you implement something as bold as this, there is likely to be a bit of pushback. Surprisingly though, some of that came from the kitchen side. In the end, the team at Bartaco found that with time, adjustments came a little bit easier.
“The two biggest pushbacks we have are both from the culinary side. One was the tenured line cook that just couldn't get over the fact that the dishwasher was making the same amount as him or her. And at the end of the day, culture's about all the individual people. So if someone has that mentality that they're above another employee, that's probably not the right person for our team anyways.
And the other thing that was really challenging was the traditional back-of-house employee's used to a flat wage, like I'm going to pay you 8 dollars an hour. That's what you're going to make. Telling them, “I'm going to pay you $10, but you're going to receive a tip share that's going to get you to $22”, they look at us and say, "You're crazy. I don't trust you. I'm leaving. I'm very skittish," and when the checks, week to week it fluctuates a little bit, right? It's not exactly $22, it might be $24 and $20. And that's a really challenging thing to get a person that's been paid a set hourly wage for two decades to understand. So there was definitely some pushback. There was a little trepidation, but after the first month, they saw the consistency. And the best part was we were actually able to go to either new employees or existing ones and say, "Hey, look, here's the pay last week for the employee in your job," and it really has dissipated now.”
With industry leading training programs and an innovative bold wage structure. Bartaco was poised for a huge 2023 and beyond.
“We've got a big year in 2023. I mentioned earlier we're partnering with a company called 1Huddle for a new learning management system that we're really excited about. We'll be fully rolled out on 7shifts at the beginning of the year, which we're insanely excited about the employee sentiment component of that. That's actually a big thing for Bartaco next year that our priority is to focus on the employee sentiment first, guest sentiment second, and then sales and labor third. We think that's the leading indicator of everything so we're really excited about making that a big part of our culture next year.
And then for growth for us, we're opening maybe up to eight restaurants next year. It's the largest amount of restaurants that Bartaco will ever do in one year, in our history. We're renting some really great new markets. We've got The Wharf in DC opening in January. We have a store in Brookline, Massachusetts in February. We have East Nashville in March, Bucktown, Chicago around April. We're doing Charleston, we're doing the one in Fenway Park, Coconut Grove in Miami. We're renting some really great new markets. We're expanding some existing markets. We've got a lot of great things coming up. So for us, we're just really excited to be able to continue to get into these communities and be able to really be that community partner and get as involved as we can. It's what makes all these openings fun so for us, we're looking forward to being in the backyards of hopefully some of your listeners.
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