The case of Tackpay, a recent cashless tipping app, is highlighted here as an effective tool in the hospitality sector when it comes to driving employee engagement. In the midst of today's labor shortage, it's important to harness creative technology that allows to empower employees by reducing the gap between those who deliver a service and the consumers.

A people-to-people sector

While research like the Digital Vortex 2021 shows that technology is playing a relevant role in the evolution of the industry, contributing more and more to the value creation process, hospitality should still be considered mainly a people-to-people sector, an industry with people at its core. This is well demonstrated by the key role of employees in creating customer centricity.

In analyzing the value and the importance provided by this stakeholder group in the industry today, the impact of the pandemic’s disruption should also be taken into account. Media calls “the Great Resignation” a global phenomenon of disengagement and social disillusion which is affecting workers, starting from the less qualified jobs as well as affecting artisans and office jobs. The trend has severe repercussions also in hospitality creating a swap the turnover rate which is now affecting the generations in their 30s-45s more than the younger ones, traditionally less engaged in a longer term.

At the same time researchers have identified that, with the growth in new digital payment means and the increasing limitations for the use of cash, the service sector has been severely penalized. Many businesses have in fact decided not to accept tipping means by credit card because of its administration complexities. This trend has been identified even before Covid19 with progressively more severe impact on staff on demand like young and seasonal workers.

These evolutions create new challenges: while jobs will have to be more relevant and meaningful, employers will have to question how to provide a sense of satisfaction together with better salary conditions for workers. From a management perspective then, this complex issue has become a priority, deserving to be at the top of the agenda and to be analyzed from multiple sides. Management literature links the global issue of the “Great Resignation” with “Leadership” and the need for businesses to understand their “Corporate Purpose” which is a key element for employee attraction and engagement. To this end, management policies should be focused on:

  • Creating relationships with the new generations of employees (i.e., digital natives) involved in the life of the organization.
  • Motivating employees' work participation considering their key role in achieving customer centricity.

Factors that drive employee engagement

There is convergence among researchers and experts that employee engagement factors do not change over time. Each of these four defined elements affects different areas of a person’s professional identity:

  • Purpose - A person's sense of meaning and raison d'être.
  • Autonomy - The possibility to operate with agency, free of hierarchies favoring initiative and creativity.
  • Collegiality - A sense of social and mutual participation.
  • Opportunity to grow - The potential for future engagement that generates positivity towards the future and motivates performance.

It is a management's responsibility to address each of these factors. To support this perspective, it is interesting to introduce the results of a Pew Research study that found out that 89% of employee surveyed were “very” or “somewhat satisfied” with the activities they had to do on a daily basis. Gallup Research further contributed: It is not what people do at work that makes a job engaging per se, rather the way people are managed.

Addressing these dimensions is not easy for traditionally structured businesses but we are now seeing the emergence of new forms of businesses such as Exponential Organizations which are changing industries with their ability to operate in turbulent times and adapt to disruption. It is the case of businesses such as Airbnb or OYO, leading the way in applying best practices and managing the engagement issue with dynamism.

Exponential Organizations (ExOs) are businesses that are able to leverage digital technologies by gathering both their customers and internal team around a strong purpose which is at the same time massive and transformative, like “Belong Anywhere” for Airbnb. Focusing on corporate purpose, although, is typically a strategic initiative that has a long term impact on business. For this reason, while digital native organizations are becoming progressively more aware of this need, for traditional organizations this is somehow a polarizing topic that often only bigger and more structured companies recognize as critical and decide to explore. It is the case of the “Augmented Hospitality” concept identifying the ACCOR Group.

The role of digital tools

For the majority of the hospitality market characterized by a big number of small ventures, including single structures like family hotels and restaurants, the challenge is to identify solutions that can be implemented without committing to complex programs and highly conceptual work, while achieving the desired results.
Possible solutions could be found in using creative technology that allows to empower employees by disintermediation (the reduction in the use of intermediaries between producers and consumers).

This is the case with TACKPAY, a web app platform that allows direct tipping in a cashless way. This is thanks to a QR code provided to guests that allows direct payments via mobile phone to a worker's bank accounts. Born with the vision of enabling everyone to send, receive and manage tips in a completely digital way, Tackpay has been slowly penetrating the hospitality market by creating different use cases that we have found extremely valuable as engagement practices.

As previously explained, cash limitations are affecting worker engagement with an estimated 30% of employee income loss, while at the same time businesses are not always keen to manage digital tips within their accounting functions as this implies extra cost and complexity. By tapping into this specific disruption, Tackpay has developed a seamless solution that has been adapted by different players in hospitality, from hotels to restaurants, from hostels to transportation vectors.

If on one side the definition of the organizational purpose and its management requires time, dedication and a sophisticated management culture, the implementation of ExO tools like Tackpay can be used to solve the employment and engagement issues focusing on three of the four previously defined dimensions.

Tackpay can be implemented to address employee engagement in the context of opportunities to grow.

  • First of all, Tackpay allows workers to keep a secondary and parallel source of renumeration which has been often relevant for the category, and to try and compensate the circa 30% reduction due to the cashless payment methods.
  • Secondly, Tackpay allows a transparent and direct worker-customer relationship which can be expressed in different events impacting the customer experience overall. The creation of different tipping moments, related to service topic specificities, could be used to measure the customer response and create motivation at every single potential interaction, improving talents. In this scenario, Tackpay allows the creation of a feedback culture. In the traditional context of cash tipping, it is not easy to find transparency and feedback is not always available because tracking of the various tips is not always possible. This can be solved with the creation of dashboards and dedicated interfaces that allow business owners and managers to map, overview and evaluate the staff on their performance. Visibility is created on every tip received acting as relevant feedback providing simple KPI’s for employee evaluation.
  • Thirdly, all these data could converge towards a future job marketplace where the most tipped profiles could gain visibility and generate new opportunities to grow.
  • Lastly, Tackpay improves employee engagement since it can be used in the Team Tipjar mode which allows fair and transparent treatment to all workers. While bypassing the central payment accounting system, Tackpay allows tips to be collected in a single tip jar allowing collegial benefits for every member according to the Dumas Four Musketeers' motto: “All for one and one for all."
Source: EHLSource: EHL
Source: EHL

Team building spirit

The collected tips are then split among workers in a custom way, allowing front and back end jobs to be equally or differently remunerated accordingly to the team desires and the culture of the organization. This mode allows a strong “Tip the team” call to action which can be very useful in several occasions, especially when it’s about customer centricity and the final experience is very much dependent on everyone’s effort. Several businesses have already implemented this practice to leverage workers' remuneration while managing team building spirit.

We have found different creative ways of using the cashless service to improve collegiality. In restaurants, the Tackpay QR code has been given to customers as a sticker on a marshmallow box, brought to the table at the end of the meal or provided to guests together with the dinner bill in an anchovy-shaped box in the case of this seafood restaurant Acciughetta, in Genoa, Italy.

Source: EHLSource: EHL
Source: EHL

Other businesses chose to include it on the last page of the menu, presented as a sticker on every dining table or positioned at the bar counter where people go to pay. It can even be installed as a special tipping POS hardware which allows a physical and more structured presence.

The last dimension of customer engagement is a worker's sense autonomy. From an employee's perspective, being autonomous is a necessary condition to achieve self-expression which can transform routinely tasks into something more creative. From the organizational side, favoring conditions for employee autonomy is risk free and it is becoming a necessary conditions to avoid disengagement, especially for younger generations. To address this specific dimension, hospitality business can use Exponential Organizations like Tackpay to support the employee's search for exceeding customer expectations.

As an example, the European hostel chain HostelOne, named Best Hostel Worldwide 2018, has integrated Tackpay as a tool to support their “extra mile” activities when it comes to customer experience. Workers from Barcelona to London and Prague have created multiple touchpoints that facilitate digital tipping to enforce the bond between guests and staff. It is the case for the “Tip the Chef” call to action inviting travellers to tip and prove their appreciation for the tradition of complementary sandwiches during their stay.

Source: EHLSource: EHL
Source: EHL

Connecting customers and workers in multiple occasions during the same customer journey is a great way to enforce the relationship and to create immediate feedback loops on different levels of the hospitality experience.

An effective digital tipping platform

The hospitality industry after Covid is a different place than before from many aspects. In defining the importance of employee engagement as a strategy to face the current challenges of the hospitality industry, new tools are necessary. We have analyzed the case of Tackpay, a cashless tipping Exponential Organization that is used by several market leaders to address employee engagement, improving opportunity-to-grow, collegiality and autonomy.

While we consider hospitality a people sector at the core, in an industry that is progressively heading towards technology intensity, the challenge for business and management is to keep people at the heart of the service while using digital tools to empower the human potential as opposed to aiming for a substitution. For all these reasons, we can conclude that platforms and tools should be seen as enablers of the relationship and, after having analyzed the app, it would not be wrong to consider Tackpay an effective employee engagement platform.

EHL Hospitality Business School
Communications Department
+41 21 785 1354
EHL

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