Vagabond Wines is a multi-location chain with 10 bars and an additional restaurant based at Heathrow. They have approximately 140 members of staff. Before joining Troncmasters in 2022, their tips were administered in-house via their rota system through to payroll. Whilst this seemed efficient in terms of time, it meant that the collected tips and service charges attracted National Insurance Contributions.
Natalia joined Vagabond Wines in February, and straight away noticed that the process could be improved and savings made with a tronc scheme. She explained, “as per my previous experience we had been using an independent tronc scheme, but here no one had thought of it. Setting up the tronc scheme was my first project.”
Natalia made enquiries with several agencies before settling on Troncmasters. She said, “I liked the profile of the company. Everything was really clear in terms of how it would be calculated and roughly how much savings we would make.”
During the discovery sessions, Natalia provided estimates of the amount of service charges they collect at their various sites and this was used to calculate the NI savings which was then shown in a chart breaking it down to monthly and annual savings for both employee and employer.
Through this estimation, Vagabond are expected to save £160,000 which they would have previously been paying over to HMRC unnecessarily.
WORKING WITH TRONCMASTERS
The onboarding process was efficient, with the process beginning in March and the paperwork being signed off officially in April. During this time Vagabond Wines were opening an additional location at Heathrow, which unlike their other operations would be a restaurant rather than a bar. With this in mind, Natalia was able to have one distribution arrangement in place for the first ten locations, and then a consultation was undertaken with staff in the eleventh to agree on the scheme rules there.
In their first ten locations, the troncs are allocated based on hours worked, but at Heathrow Natalia and the Operational Management had identified that a more sophisticated calculation would be required. In May, the Ops Management and our team at Troncmasters met with staff assigned to the Heathrow location to discuss the options for the scheme.
Natalia explained, “we agreed that the distribution between the front of house, back of house and the managers would be different and set out the percentages for allocation in the meeting.”
Meeting with the staff helped them to understand why the troncs would be distributed through a tronc scheme and why different percentages would be available to different roles. In the meeting, Troncmasters did a live demo of the splits to help the staff see how that would work in practise.
This consultation resulted in 54% of troncs going to front of house employees, 32% to back of house and then 14% to management. This is layered with the hours worked per day to calculate the tronc payment they receive.
A SMOOTH-RUNNING SCHEME
To ensure a smooth set-up and keep employees informed, Troncmasters worked with the Vagabond HR team to produce communications that aligned to their branding and voice.
Now that the tronc scheme has been set up and staff have received their agreements, everything is running well. Natalia commented, “it’s all going very smoothly, we have never had any issues.”
Employees are happy knowing that they are saving NI payments, and the business is saving money too. Natalia continued, “employees have all had positive feedback when we introduced them to Troncmasters.”
Whilst Natalia and the team at Vagabond Wines are happy with the scheme, we are always looking for ways to improve their experience through innovation. Plans are already in place and development is underway for regular statements to be sent to the staff, to compliment the information already in their payslip, which they can use to understand their tronc payments.
In addition, Vagabond Wines are in the process of moving their payroll in-house from their outsourced provider. From the 15th of November they will be using a new payroll system, and the team at Troncmasters will be looking at an integration to make the process even more efficient for Natalia.
By creating this integration and allowing our systems to accept the raw data output from Vagabond’s payroll system which will be pushed together with the service charge report, this will make the process even more efficient and save Natalia time in producing reports.