Hospitality workers in Alberta seem to be feeling a financial pinch when it comes to the tips they receive, with recent data revealing the province is seeing a drop larger than the national average.
A new report from Actual, a tip management and hospitality financial operations company, found that nearly seven in 10 (69 per cent) tipped hospitality workers in Alberta say their tips have decreased over the past two years — that’s above the national average of 67 per cent.
Nearly half (47 per cent) of Alberta hospitality workers receive tips, compared with 49 per cent nationally.
Angus Reid conducted a survey on behalf of Actual to find out what issues are most pressing for hospitality workers and how tipping impacts them.
It found that tips matter, but fewer Alberta workers depend on them for the basics. Nearly one in three (31 per cent) either always or often rely on tips for rent, groceries, and other daily expenses, compared with 43 per cent nationally. One in 10 say tips account for more than 40 per cent of their income, and more than six in 10 (62 per cent) say tip income has influenced their decision to remain in hospitality.
Actual suggests that there is a lot that people don’t see in the restaurant business, noting that restaurants are not a high-margin business, with the national average below a five per cent profit margin, according to data from Restaurants Canada.
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“On margins this thin, operators cannot simply raise wages without raising menu prices to match, and higher menu prices come with their own risk of pushing customers away,” Actual says.
The way tips are paid out makes an impact, as workers across the country say that if they had faster access to their tips, it would “meaningfully improve” their finances. It’s not just the frontline workers, but managers and owners who also want faster payouts.
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“Part of the delay comes down to how tips actually move today. Most customers pay by credit card, which means the tip doesn’t land in a worker’s hands the moment it’s earned. It first has to be collected, divided among staff according to the shift’s tip pooling structure, and paid out, and each of those steps takes time,” Actual says.
The drive for same-day tip payouts is a different story for Alberta workers, with fewer than half (46 per cent) saying same-day tip payouts would improve their finances, the lowest proportion in Canada and well below the national average of 62 per cent. Demand for that is highest in Ontario and Saskatchewan/Manitoba, sitting at 69 per cent.
Actual also notes that tips are a major factor in keeping most workers in the hospitality industry. A full 61 per cent of tipped workers said that tip income has influenced their decision to stay in their role. For frontline and server roles, that number jumps to 74 per cent.
For Alberta workers, tipping and good service go hand in hand, but transparency has room to improve. Eight in 10 (80 per cent) believe tipping encourages better service, compared with 76 per cent nationally. Nearly six in 10 (58 per cent) believe tips should be based on service quality, while nearly eight in 10 (79 per cent) support transparent policies explaining how tips are collected and distributed, below the national average of 85 per cent.
You can read the full report on the Actual website.
Do you tip often when visiting a restaurant? Let us know in the comments.
With files from Amir AliĀ