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
Making pay transparency work in restaurants | Stella Dennig, Co-Owner/GM of Daytrip | 044
In this episode of the Pre-Shift podcast, host DJ dives deep into the intricacies of managing successful restaurant teams with Stella Denig, co-owner and GM of Daytrip Restaurant in Oakland, California. Stella shares insights on building a restaurant prioritizing pay equity, equitable compensation, and a strong internal culture. She discusses their unique business model, the challenges of introducing equitable systems, and the importance of legislative change in the industry. Stella also touches on the role of collective thinking in their operations and the exciting personal and professional changes coming up for her and Daytrip. This episode is a must-listen for anyone eager to learn about innovative practices in the hospitality industry.
00:00 Introduction to the Pre-Shift Podcast
00:12 Meet Stella Denig from Daytrip Restaurant
01:02 The Journey to Opening Daytrip
02:20 Innovative Business Model and Pay Equity
04:14 Service Charge and Employee Compensation
09:51 Open Pay and Hiring Practices
14:08 Collective Thinking and Team Culture
25:19 Advice for Aspiring Restaurateurs
29:19 Exciting Future Plans for Daytrip
30:52 Conclusion and Contact Information
Guest Bio
Stella Dennig (she/her) is the Co-Owner/GM of Daytrip, a fermentation-driven party of a restaurant in Oakland, CA. Core to Daytrip’s mission is to push toward a more equitable future for this industry and at the center of that, its workforce. Daytrip has been written up for its employment practices by publications like Bon Appetit, The New York Times, and the SF Chronicle. Daytrip was a Bon Appetit top 10 Best New Restaurant in America in 2023 and Co-Owner/Chef Finn Stern was a James Beard Semifinalist in 2024.
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Hello and welcome back to another episode of the Pre-Shift Podcast. My name is DJ and I'll be your host, diving deep into what it takes to run great restaurant teams. Joining me on the show today is Stella Denig from Daytrip Restaurant in sunny Oakland, California.
Speaker 2:Hi, I'm Stella Denig. I am the co-owner and GM of Daytrip Restaurant in Oakland, California. We've been around for about two and a half years. It's the first restaurant I've ever owned. It's been a wild ride. But, yeah, lovely to be here and talk to you.
Speaker 1:Daytrip is a fermentation-driven shared plates party restaurant and bottle shop that takes extra care to ensure that their team receives equitable compensation. Stella and I chatted about the mission behind the restaurant, how they're able to pay their staff more than the minimum wage and how they've built a culture of equity at Daytrip. As always, the Pre-Shift Podcast is brought to you by Seven Shifts. Thanks for coming on the show, stella.
Speaker 2:For sure, thanks for having me.
Speaker 1:So I'm curious. So I understand that when you and your partner Finn decided to kind of start your own food business, you were like we're not doing a brick and mortar restaurant, You're very reluctant to do that. And now you're one of Bon Appetit's. You know hot 10 new restaurants, fully there with a brick and mortar. So curious, what changed.
Speaker 2:Yeah, we definitely. When we embarked on this journey where you know my partner Finn and I connected over food and community in the beginning we were so adamant that we wanted to do anything but open a full service restaurant, because the margins are terrible and it's a terrible business model. It doesn't make any sense. I think we all I don't know what happened, to be honest, I don't know how we got here it just sort of happened. I think we all I don't know what happened, to be honest, I don't know how we got here it just sort of happened, I think retrospectively, there's this thing, there's this piece of advice that we've gotten from so many people at this point I think it's pretty common in the restaurant industry which is don't open a restaurant unless you feel like you wouldn't be satisfied without doing it. And I think, ultimately, that's probably what happened to us. The more we got into food together and the more we explored different avenues pop ups, catering we just realized like we have to do this, and so one thing led to another, and here we are.
Speaker 1:Very exciting With the restaurant you said. You know it's a terrible business model and I think a lot of people feel the same way about the margins being so slim. But what you guys set out to do is create a restaurant where the model made more sense, where pay equity between the front and the back of house was equal. There was equity there. So how did you end up structuring that and coming up with that business model that did work for you guys?
Speaker 2:Yeah, and you know, I should probably start by saying I don't know, we have yet to prove whether this is a business model that actually will work. But I think what's core to our theory is for us, it's not worth it to run a business under a model that doesn't value its people and that doesn't live by our values. So if it ultimately fails, then we failed at trying to prove this business model. I think there's plenty of reason to suggest that it's possible and lots of restaurants doing things differently in this way that are successful. So we're chasing that. But TBD, I know I think there's a lot that needs to change in this country legislatively to make it be more achievable for the norm in this industry to be parts of what we're trying to do and what other restaurants are trying to do in this regard.
Speaker 2:But, yeah, with regard to pay equity. So I guess what we're doing is we have a base rate that everyone, regardless of the position that you're starting in, is in the same range of. So if you're a prep cook, if you're a line cook, if you're a server, host, runner, dishwasher, the entry level pay is the same range. And then if you end up taking on more responsibility and are in a shift lead role, then that's at a kind of second tier of pay, but it's not any different between different positions and different teams in the house. Similarly, we have a 20% service charge that gets divided up proportional to hours worked over a two-week pay period, and there's no point system there, it's just proportional hours based on however many hours you worked, and it's shared across the whole non-managing, non-owner team.
Speaker 1:So everyone that comes in at like that entry level is it's the same pay across the board, and then, once you get to that second level, that's also the same across the board. Is that correct, correct, awesome. And then that 20% is just added on to all the bills, all the guest checks, and distributed like you said, hours worked in just an equal tip pool. And then do the managers or like those kind of next level, two shift lead type employees. Are they getting more of the tip pool or is it all just equal across the board, no matter what, it doesn't matter what role you're in, it doesn't matter if you have an elevated position or not.
Speaker 2:Our thinking there and I don't think there's necessarily a right or wrong answer here I think there's a lot of ways of thinking about it and so you know no shade on different models. But I think, as we were thinking about it, we kind of felt like we want to recognize differences in experience, in levels of responsibility, via the base rate. But once we're in service, we're all in service together. So if that service charge is representative of how service is going and what we're all contributing to the whole, then there's no reason that that should be in a point system. I think there are pluses and minuses to all the systems. I think it puts more pressure on management to really make sure that everyone is performing at the level that they should be. But it also creates a platform for teammates to hold each other accountable in different ways, because they're saying you know we're, we're in this equally, so I need you to step up and do more. So it creates an opening for those conversations in a non hierarchical way as well.
Speaker 1:And then that 20% as far as service charge. How are you making that work from a cost standpoint? Are you increasing menu prices at all, I guess how far does that go in terms of balancing it out and giving the employees the ability to earn above the market average?
Speaker 2:Yeah, so I guess the service charge is added in addition to the total guest check, so we're not increasing menu prices. We do increase menu prices by about 5% to account for health stipends that we give out, but that's unrelated and, to be honest, we don't always increase menu prices by 5% and we still do that. So we should be better there. But, yeah, the service charges in addition to the guest check, and so I would say it doesn't help balance the books at all because 100% of it goes to employees. There's no part of it that the house is keeping. But it definitely helps create a more regular paycheck for our team.
Speaker 2:Over the two and a half years that we've been open, I would say we've had, within a narrow margin, the same hourly pay as a service charge in addition to the base rate Um, and you know, probably 90% of of weeks of paycheck weeks have been, uh, within a dollar sway. So it really helps create more consistency in um, in our employees checks, and that I think it, especially in a place as expensive as the Bay is, is really important to be able to make rent and and so the primary advantage is the consistency and, you know, I think it does probably lead to a slight. You know our average. We've got a 20% service charge and some guests still pay like discretionary tip on top. So our average service charge and tips that employees are taking home are about 22% and I think that that probably is a little bit higher than what the average over the course of a year would be otherwise by a few points. So it helps to increase their take-home pay but primarily helps make it consistent.
Speaker 1:Absolutely. Are you able to share what some of those numbers are?
Speaker 2:Yeah, for sure, absolutely Everything. Also, feel free to ask any questions where an open book comes to numbers and happy to share that. So our additional tips tend to be somewhere in the like 13 to $14 range. There have been we've had a bit of a slower period in the last like six months or so. It's definitely been um, there's been a downturn in our area in general. A lot of restaurants are struggling. So during that period there have been some weeks that have been between like 12, 50 and 13 an hour additional, I would say. But um, most of the time it's like somewhere in that 13 to 14 range, excellent.
Speaker 2:Additional on top of the I think it's 18 or something was your entry level Is. That's because we want to give people an amount of time to learn maybe 80% of the job and get competitive within the greater whole, and because we've got transparent pay across the entire team so everyone can see what everyone else is making, including what my partner and I are making, and so I think it's really important to bring people in at the rate that feels fair relative to the skill skill set of others.
Speaker 1:So that's why we've got onboarding period and that kind of segues nicely into the next question I want to ask, with that open pay and in general, like, what has the feeling been like from your staff about these systems does? Are people like coming to you because of in terms of hiring or wanting jobs? Are people coming to you because of in terms of hiring or wanting jobs? Are they coming to you because this way of doing things is advertised? And have there been any negative feelings from people with the wage transparency?
Speaker 2:Negative feelings? None that I can think of off the top of my head. I think wage transparency is ultimately essential and we should all be doing it across all industries. Big proponent of it, I think that the way we hire, we spend a lot of time hiring and we put a lot of resources out there for people. So we've got through our link in our Instagram bio. There's a hiring form that is always up and always running whether or not we're hiring, and there's also a document with information about us and information about pay and information about kind of what you can expect on average for tips and stuff like that.
Speaker 2:Because I think it's extremely important for people to know what they might be earning and that's often kind of hidden and you don't know until you start a job, and that's really problematic in a place that's this expensive. But because so we kind of put front and center in all of our hiring materials that and you know it's it's also part of every interview that I do with people. I I tell, especially when I'm hiring for front of house, I tell people very clearly um, you know in there are other restaurants in the Bay that you can work at, where the the service charge or the tip split is not equal and front of house mate can make a larger percentage than back of house. And there we deeply believe in not doing things that way because, it you know, I would never want someone to earn more off the backs of anyone else in the restaurant and that is ultimately the system that exists in the norm in the industry and we don't believe in that, and this is why we do things differently.
Speaker 2:And I have full understanding. If someone needs to earn more and can earn more somewhere else, then they should do that. So it's a judgment-free zone. But I think that that openness and transparency around why we operate in the way that we do ends up attracting the people who whose response to that, especially in front of house, is that's great. I love that. Like it's made me feel weird in other places when I'm earning more than people who are working just as hard as I am.
Speaker 1:Absolutely. Do you find that it attracts people that kind of have similar feelings that you do and kind of strengthens that internal culture a bit?
Speaker 2:Definitely yeah, I think we've got a lot of values alignment on the team to the point where you know our team is constantly pushing us to do more and be better, and I think so many of our challenges have come from team members over the years saying like this doesn't feel right or I think we should be doing things like this, and we are listening and we're, you know, we, I think we're all aligned in our values. So my partner and I want to make those changes whenever we can, and sometimes it's a longer road and sometimes it's a shorter road, but but that there's a strong alignment there overall.
Speaker 1:Now, of course, you know the pay obviously has a lot to do with um pay equity in particular, like how people feel valued at work and, and you know, contributing to a positive culture. But, um, I'm curious, like what else you guys do on the culture front um and like the staff experience front, um beyond that, um to foster a great work environment.
Speaker 2:Yeah, um, I think the think the biggest thing that weirdly feels different, like I don't know why this feels different and why this should be different, but I think that we have spent a lot of time building systems where we can hear everyone's voice, and we're still building those systems. And you know, I definitely struggle on a daily basis with the balance between over-communicating and getting enough communication out and making sure that everyone's looped in. And you know, one of our values is transparency and we want to share everything with everyone but um, but, but when to do that and when more and less is, is definitely a challenge. So I'm not saying that we've done any of this perfectly, but I think that we have spent a lot of time trying to create systems in our daily operations that allow room for everyone's voice on the team to be heard. Specifically, we have something called Sherry Circle or Sharing Circle. That a little bit of a corny name, but it came about from one of our opening team members suggestions and we adopted it and we've been running with it for over two years, but it's essentially a time for each team the front of house team and the back of house team to meet at the end of service, when things have died down, when they've closed down most of their duties, and to meet in a circle and to, via nonviolent communication, share observations about how the night went, sometimes make asks to each other, sometimes put you know, put ideas out there for things we might want to think about differently or systems we might want to change, and that information all gets captured by the shift lead on the team via notes that come to me and to my partner and our other back of house manager, and then we are able to the next day make those changes via our pre-shift notes or via our pre-shift meeting with the team the next day. And then we've got weekly summaries that go out to each team, that kind of go through everything that went on throughout the week. So there's heavy communication and regular check-ins on a daily basis with the team to reflect and capture those changes.
Speaker 2:Because I think it really came about, because one of the biggest frustrations that many of us have felt in this industry, working in this industry, is that you constantly see things that could be done better and you feel like you know how it could go better, but no one's listening to you. And not to say that we capture 100% of those things, but I think just the act of having systems in place on a daily basis really really helps with that. That's the first thing that comes to mind. But we have a lot of well, not a lot, but we have a handful of team members who have worked in collectives in the past in the food and bev industry and have really brought a collective thinking mindset to our operations in a way. That's been really interesting and you know it's, I think, heading into opening day trip, my partner and I and we still have a vision that there's a really powerful potential future in this industry, specifically in collectivizing, in creating co-ops and in beyond profit sharing, in really creating co-ownership structures with the full team. And that's because the job for owners can be so demanding, especially when you're a single independent restaurant that's just getting started and so sharing in that labor, sharing in that emotional and physical labor and all that responsibility across more people, feels really powerful and it's really hard to find ownership or find buy-in from that number of people. So there's plenty of challenges to get there. But I think that the idea of that is really inspiring to us and via many of our team members who have brought kind of this collective thinking to to day trip.
Speaker 2:We've been able to, you know, find the intersection of the capitalist structure within where operate, within which we're operating. We are an LLC, that's a two owner owned LLC, and how can we bring, bring collective thinking into more of what we do? And so we've slowly been establishing different committees and trying to figure out when we can utilize this more, this more. We have a hiring committee that comes into play when we hire salaried people or managers, not for every role in the house we're still trying to figure out how we can make it efficient in more situations but a committee of three to four people across all teams who have an opportunity to formally interview all the candidates and report back to us. And that's impacted our hiring process every time, and we've had different nuggets of ideas from experiences and desires of folks on the team asking for things in different ways that we've been open to and adopted.
Speaker 1:What are the best kept secrets from successful restauranteurs like Stella? What do employees actually want? Is AI coming for your job? Our new newsletter, the Food Runner, answers these questions and more, in seven minutes or less. Once a month you've got a roundup of digestible data not the boring kind resources, practical tips and industry leader insights to learn more quickly. Sign up now at 7chipscom and check the link in the description. Now back to the show. Just like with those weekly summaries and the share circle, any recent changes you've made due to that process that stick out to you, like any recent things that came out of that experience that you ended up making a change in the restaurant or anything like that.
Speaker 2:Every day, oh my gosh Every day. Okay, there's stuff every day. It would be boring if I got into it, but there's minutiae every day, whether it's yesterday feedback on not carrying heavy wooden tables to the sidewalk. Little random like little little random things Okay.
Speaker 2:Yeah, and then sometimes there are bigger things that involve communication or team dynamics, like there's a wide range and most, you know, 90% of the feedback that I get through the circle ends up being implemented the next day. And then there's probably 10% that are bigger changes or things that require more conversation with the team, kind of getting more people's input beyond just who was in service yesterday, because I'm always supportive of changes that the team wants to make if they think it will help service run better. To me it's like you're the one who's on the floor every night. You know how things work best, I trust your judgment and, um, I want to make sure that there's full team buy-in, that it's not just coming from like one or two voices, but but it's it's really full, and so that can take more time cool and just to clarify with the kind of the collective thinking when it comes to hiring, that's just getting more people's input on the team as to who you bring into the team.
Speaker 1:So it's not just you and you and Finn just like making the decision yourselves Correct Awesome. So I understand you talk to a lot when you were opening. You talk to a lot of different restaurateurs, people in the industry. Were there any conversations that really stuck out to you Other folks doing similar things or people that made you think like we can do this this way?
Speaker 2:Yeah, many Definitely. Or people that made you think like we can do this this way? Yeah, many, definitely. I think the biggest moment of like luck that I ran into was discovering One Fair Wage and offshoot of that organization called High Road Restaurants. Of that organization called High Road Restaurants.
Speaker 2:Before we opened, my partner and I knew that we wanted to. We wanted there to be pay equity in our restaurant, and because this was our first restaurant and we didn't have much experience working in the Bay at restaurants, we didn't know what that meant in dollars. And so I did some Googling and stumbled across High Road Restaurants, which is essentially a. So One Fair Wage is an organization that, um, first and foremost, is fighting for one fair wage, raising the federal minimum wage, um, and and that's kind of the biggest thing that they're fighting for right now they have a lot of offshoots, though, um, kind of sub sub parts of their organization. One is called High Road Restaurants and they bring together restaurant owners across the country to help share resources, to give each other advice to, essentially, restaurants that are values aligned and are also interested in equity at every level. So I found them, had an amazing conversation with the then director and was connected with a few different restaurant owners, primarily in the Bay, but also across the country, and they gave me. They were so generous in their time and in being willing to share some of this information with us transparently.
Speaker 2:My partner and I came into this without many resources in terms of like knowing people in this industry and felt like we didn't have access to any level of transparency, which is part of why it's so core to our values, but these folks were so generous with that and really helped us decide to have a service charge.
Speaker 2:You know we were debating you know that was a tough conversation. We were debating between a service charge or raising menu prices by 20% and not having tipping, which, ultimately, is definitely the future that I want to see in this country. I think that's going to require legislative change for it to work, though, because through a number of conversations with values aligned folks, we determined that there are so many restaurants that have tried to do the no tipping thing but ultimately either failed or went back to service charge, because you can't really successfully, it seems be a trailblazer in that regard. We need legislative change to happen to normalize that across the board for everyone, and so they helped us make that decision, which was definitely a hard one, but I think service charges are a good interim step for us to get there.
Speaker 1:Yeah, Cool and, on the flip side, now that you've been doing this for two and a half years, I think you're more than qualified to talk about it. What advice would you give to other restaurants that are like I want to try this. I don't know how to dip my feet in it, whether it's service charges or even just tip pooling, like other ways of challenging that, the status quo and the typical way of doing things, which I think we know how you feel. You don't think it's the greatest business model.
Speaker 2:Yeah, it's definitely a tough one, because the unique situation that we're in and the privilege that we have is that we opened a restaurant with these decisions already made and I think that's a really different situation and I have a lot of empathy for restaurateurs who are, who were using the old system and want to shift to this, because change is really hard and it's really hard to tell, to tell your employees like, hey, you're going to get a pay increase, but you're going to get a pay cut because we believe in equity and this is, you know, this is what's going to happen and that's hard. You never want to reduce people's pay or, you know, take home pay. So I have thought a lot about it because I believe there has to be a path to get there. I think the thoughts I've had around it are I would definitely encourage restaurant owners to open the conversation up to the team before making any decisions on it, because I think a lot of people would probably be surprised about team members. You know, if there's a process to getting there and if they can have, they can feel empowered in that process and they can feel a part of that process.
Speaker 2:I think, if you know, imagine you sit your whole team down together and let them know. You know we see a lot of restaurants moving in this direction. We are values aligned with this and it feels really hard to like change people's pay dramatically or lower half the team's pay. Let's talk about it, let's have a conversation about it, because then when back of house and front of house are sitting next to each other, it's a lot harder in front of house to say like hey, I don't think you should make more. And maybe there are creative solutions that the team can come up with of like, let's have this be a two year long process, because it feels really hard to do this from one week to the next. And, like my paycheck, just seeing a cut in my paycheck would be hard. Who knows what creative solutions they could come up with.
Speaker 2:But I think empowering the team to be more legislative action and push for more legislative change, because I think the longer I've been a small business owner, the more I see how flawed the foundation of everything that we sit on is and it's bad for workers and it's bad for owners and unless you're really taking advantage of your employees, it's hard to make it work unless you're a really popular restaurant and that's not the norm. So I think getting involved locally and in your state one fair wage is a great place to start is really key. I think a lot of people are afraid of minimum wage rising federally or in their state, and I'm a huge, huge supporter of it rising and in fact, I think it'll be great for all of us if it rises. Because what's that expression? A rising ship lifts all tides, or rising tide lifts all ships, or something.
Speaker 1:Yep, that's it.
Speaker 2:If you can imagine everyone in a state in what's the largest industry in our country earning more, then they're going to be spending more. And restaurant workers are some of the biggest restaurant goers some of the biggest restaurant goers. So I think it would really help all of us. But having one restaurant do that here or there will not lead to success for that restaurant. So I think you know, get getting involved feels really like an important piece of the puzzle.
Speaker 1:Well, with that, anything exciting coming up for you guys this this year, or whether it be in the next couple of weeks or later this year, or anything you're looking forward to at Daytrip, whether it be in the next couple of weeks or later this year, or anything you're looking forward to at day trip.
Speaker 2:Oh my gosh. So many things. I don't know. I guess we're in a. So, personally, as it pertains to the business, I'm pregnant with my first child, thank you. It feels like a horrifying thing. As a restaurant owner and I've been processing it for a few months I'm trying to figure out what does this mean for us? I think I'm now at the stage where I'm actually getting really excited about what that could mean for day trip, and I think there's so many ways in which we could adjust systems that we have, empower people in different ways, create new roles that that feels really exciting and also feels like something that our restaurant has been needing. But we felt like we couldn't afford, and now we're like we have to find a way to afford it, you know, because some amount of time it's parttime or whatever it is, so, um, so I think that's a big, big shift in my life that I think will have a big impact that I'm trying to trying to frame positively and you know I'm getting genuinely excited about for the future of day trip.
Speaker 1:That's, that's amazing Congratulations. Um, and yeah, it's a very positive thing. Um, and I like how you're viewing it as something great for the business. And um, it's a very positive thing and I like how you're viewing it as something great for the business and it's very exciting. So where can folks find you if they are looking to do some more research or they want to work for Daytrip or they just want to learn more about what you guys do?
Speaker 2:Yeah, I think our Instagram is probably the best place. Our Instagram handle is thisisdaytrip and then our website, thisisdaytripcom, are probably the two places we have some work to do on our website. But Awesome.
Speaker 1:Well, thank you so much.
Speaker 2:Absolutely, thank you.
Speaker 1:Thanks again for listening to this episode of the Pre-Shift Podcast. If you enjoyed it, please leave a review and share it with one of your friends to help our show grow. We could not do it without your support. As always, I would love to hear what you think. You can email me at dj7shiftscom. I look forward to hearing from you. Until next time.
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