Tal Clark: Hello everyone. Welcome to the Instant Payments podcast. I’m your host, Tal Clark. I’m the CEO of Instant Financial, a fintech company that modernizes payments and payroll for hourly workers and their employers. I’ve worked in the payments industry for 30 years, including roles at Fiserv and Money Network.

Thank you to our audience for tuning in today. If you like what you hear, please like and subscribe, leave a review, or suggest a future guest. This podcast features industry leaders to discuss opportunities and challenges affecting the workplace and the lives of the workforce. Before we get started with our guest, I wanna plug a new awards program we just launched for hourly workers in service industries.

It’s called Workforce Warriors, and anyone can nominate an hourly worker who goes above and beyond. Nominations are open through November 9th. And three winners will receive a $1,000 gift card in December. [00:01:00] Visit instant.co for more information.

Now. Moving on today’s episode. I’m excited to welcome Matt Umholtz to the show.

Matt has deep roots in payroll and HR technology. As President and CRO of AllianceHCM, he helps power some of America’s top restaurant brands with scalable workforce solutions. Matt began his career as a founder with a successful exit for his own payroll company and has since scaled AllianceHCM into one of the fastest growing providers in the QSR and multi-unit restaurant space. Known for its obsession with operational execution, Matt brings a unique perspective on how technology and leadership intersect to drive real results. He lives in Texas with his wife and three kids, and remains passionate about helping operators build businesses that win without losing what made them special. Matt, welcome to the show. How are things going today?

Matt Umholtz: Um, they’re going fantastic. And man, that sounds way better when you say it.[00:02:00] 

Tal Clark: Yeah. So, uh, and you do have a great background and I’m excited to talk a little bit about your experience in the restaurant space and some of the things that you guys have going on in the AllianceHCM, and some of the things that we can do together as well to help the space. But, fill in the blanks for me just real quick, more about your personal background and, and where you are today, and maybe start with how you, how you arrived and, or ended up in the roles you’re in, in AllianceHCM.

Matt Umholtz: Yeah. It, it’s a really great question and, and I’ll tell you this morning, I, uh, I put a post out on LinkedIn. We’re welcoming a new member to our team, and I first met this new member 21 years ago, when I started at that giant payroll company, and he was in my first training class. So, he kind of hit me like a ton of, a ton of bricks this morning, realizing I’ve been in the business 21 years.

But, so before I started in the payroll business, I think it helped shape the story a little bit. In college I used to work in, in high-end [00:03:00] kitchens. I was actually like a technology guy and was helping, the general manager of a, of a, a restaurant with the tech stuff and he said, hey man, if you show up in the morning, I’m sure Chef will, you know, help you learn you know, how to, how to cook, how to operate in the kitchen. So I started showing up, you know, 5:30 AM meeting with the meat purveyor, understanding cuts of meat and how to butcher and learned a ton of technique. Was advised to buy the Culinary Institute of America Cookbook and learn the five mother sauces and all that fun stuff, and ended up working my way up in a, into a kitchen. I was in college. Uh, I became the sous chef at a, at a restaurant before I left to pursue a career in technology. So got a passion and a background for, for restaurants and food. And I’ve worked the expo line and I’ve worked, uh, you know, the hotline I’ve served as garmange.

I mean, whatever you want. I’ve, I’ve probably done it in the kitchen. So I, I love the, the restaurant business. But, when I ended up, leaving, uh, [00:04:00] and, and graduating from from college, I decided I wanted to go into the technology space, started my career with one of the, you know, giant payroll vendors.

Spent about eight years there, eventually decided I could leave and build a better mousetrap to start a, uh, a payroll company from scratch here in Houston, Texas. Um, several years, Inc. 5,000 fastest growing company in America. Proudest achievement: we were actually the, Houston Business Journal’s number one company to work for in 2017, so we won #1, and that’s a blind survey that goes out to your employees. And everybody says when it comes out and you’re always nervous of like, hey, do they hate me? Like, what are they gonna say? Um, but, um, you know, had had great results with that. Eventually we were in, in the payroll space, you can borrow technology, which is like a, a leasing arrangement or a licensee arrangement, or you can own and build your technology.

So we were at that time licensing technology. And there’s only so far [00:05:00] you can go with a, a licensed payroll product. And I was growing more passionate about, a verticalized payroll solution. And if you really wanna go deep into a vertical, you have to you have to own the technology.

So, a friend of mine who I had known about 15 years approached me and said, hey, Matt, you know, we should join forces. Come join the team. Help us grow the business. That was, uh, Randy, the founder of Alliance Payroll Services, and, we ended up merging the companies together in October of 2020, so just five years ago. And, yeah, so we, we merged companies together. The interesting thing was at the time, you, you bring two teams together. That’s, um, always a challenge and I have a lot of good experience from that, that, I can advise when, uh, restaurateurs are buying and other business, which happens all the time in the quick serve restaurant space.

But for it was really looking at the business from the viewpoint of what the, the combined business could [00:06:00] really specialize in. 50% of the business at that time was really in the multi-location restaurant space with some the largest, um, operators in the country as customers. And being a, a, of a old hat in the payroll space, I, I see, and I continue to see that the, the future within our world is a verticalized offering. So, and I, I think the generalist providers when there are niche markets will kind of go the way of the dodo bird because the, the industry’s needs specialization and somebody that gets and knows them. And, and that’s really what we’re, you know, most passionate about today is really knowing the customer better than.

You know, anybody else and focus on helping them be successful. So that was a, a long way around to your, your question.

Tal Clark: No, that’s great. And I, I wanna back up a little bit and fill in some blanks there ’cause I, I, there’s some things, you know, I’ve visited several times, but some things I didn’t know where, [00:07:00] first of all, where did you go to school? You mentioned college. 

Matt Umholtz: Yeah. I went to, uh, I went to Texas State, which uh, is, uh, just south of Austin, Texas. In between Austin and San Antonio. Yeah.

Tal Clark: Got it. And the restaurant you were working in at the time, is that one, is it still around?

Matt Umholtz: Actually, so I was in, uh, I was working at restaurants in, uh, different country clubs. I worked…

Tal Clark: there you go.

Matt Umholtz: Yeah, and I worked in a country club. Um, a restaurant is really where I, I learned a country club called River Hill Country Club in Kerrville, Texas. If you’re a golfer, Byron Nelson was a member, uh, back then,

Tal Clark: Yeah, that’s huge.

Matt Umholtz: Yeah.

Tal Clark: Well, and then the business you started, I don’t think I realized you, so you merged the business that you started with Alliance, uh, at some point. What was the name of the business? Your payroll business before the, before you merged?

Matt Umholtz: So the name of the business is, uh, PaySphere. 

Tal Clark: Okay. 

Matt Umholtz: Yeah, and PaySphere was actually a, uh, it was a trademark filed by American Express, but [00:08:00] they never filed statement of use. So we were able to, to get the name and, we, we grew that business in two parts. So we grew, what I would consider kind of a small business division.

And then, my passion diverged into helping larger enterprises. So we sold that small business division to a publicly traded company out of Austin, Texas.

Tal Clark: Okay.

Matt Umholtz: Took that remaining business, continued to grow it, and eventually, you know, merged it in with the team here at Alliance.

Tal Clark: Okay. Well, I think you’re, I think your, your thoughts on where our clients, your clients, your customers want to go with a specialized solution and something that is more verticalized. Uh, give me, give me your view of the restaurant space, uh, not particularly on the services you provide, but a little bit there.

I mean, I, today we run into restaurants that are, I think one of the challenges is multiple vendors to do, um, to do everything. Everything that they need to do, [00:09:00] they do with a different vendor. And I think there’s opportunity, uh, for them to maybe consolidate and look at vendors who can provide more services and do it in a way that is specific to the industries that they’re in.

In this case, quick service restaurants and multi-unit restaurants. Are you, how do you see that and, and, and what are you guys doing to maybe address that? Because I’ve heard that from restaurateurs, which is, you know, I’ve got six vendor relationships and I like to have two or three. Right?

Matt Umholtz: Yeah. Yeah.

Tal Clark: How do you see that and what’s going on in that space?

And just gimme your thoughts on some of that.

Matt Umholtz: Yeah, well, I, I’ll answer that in a couple different ways. Number one, I, I’ll just answer it directly, I mean, in integration is a key within the restaurant space. Our, our product was built forever ago to integrate with all the pieces that a restaurant, leverages. So think point of sale, et cetera.

But, moreover, you know, being a, a founder and operating a P&L literally of a startup founder with, hey, are we gonna actually make [00:10:00] money to pay anybody this month? Right. So I’ve operated a P&L and understand it extremely well. So when you’re talking to a, a restaurateur, I mean, I understand the cost inputs and how the, the business operates.

So I think, and that cascades down to our organization where, we should be speaking P&L. And right now in the restaurant business, you’ve got same store sales are down at, at the same time that costs are pretty dramatically up. If you look at some of the, the reports being generated by the publicly traded guys, I mean, they’re citing, what I would consider promotion fatigue.

So you had companies do a lot of promotions. They had great quarters, but they’re starting to experience some fatigue and they’re, predicting the next few quarters are gonna be a little bit turbulent. Um, so we see the best operators in the country are looking for ways to engage the customer a little bit differently, to drive [00:11:00] repeat business.

Finding ways to win that’ll differentiate them. And I, I kind of joke that you go to your dentist and when you’re walking out, they schedule your next meet, your next appointment, right? Almost a meeting.

Tal Clark: Right.

Matt Umholtz: Schedule your next appointment, and if you say, hey, I don’t have my calendar, or let me look or whatever, then they’re, they’ll say, okay, well we’re gonna text you.

So my favorite restaurant is this Italian restaurant right outside of my neighborhood. They never text me. I don’t get a text saying, hey, it’s been a while since we’ve seen you.

Tal Clark: Yep.

Matt Umholtz: And we’re, we’re seeing some of the better operators in the country that are in what I would consider to be kind of fast casual.

They’re starting to adopt ways to continually engage that customer and bring ’em back. So imagine last Friday you ordered a pizza to your house and this Friday at noon, you get a text and it says, hey Tal, last week you ordered this. Do you wanna order that again? Click, right? So that, that’s a way to [00:12:00] leverage technology to drive the customer experience and we’re seeing some of those, larger operators really start to adopt some of those tactics, but

Tal Clark: That’s good. Well, you, and you’re touching, you’re touching a little bit on, on, uh, what’s going on in the industry today, and some of the challenges that are being faced by operators. What are you seeing out there? You mentioned one thing that sounds like it could be used, which is communications with their customers once they leave the restaurant and trying to pull them back in.

What are some other things that you’re seeing out there from a competitive pressure perspective on the operators and, and how they’re running their businesses in 2025 and, and some things that the successful operators are doing that separate them from others?

Matt Umholtz: Yeah. And I, I can speak to that from the viewpoint of the, the pieces of the puzzle that we touch. I would say that some of the best operators are really, um, training their general managers to speak P&L. You’ve really got two big [00:13:00] inputs in a restaurant. I mean, I, and you’ve got real estate expense, but let’s eliminate that.

But you’ve got two big inputs. You’ve got food cost. Labor cost, right? If I can teach my general manager how to speak P&L, I can teach them how to control my food cost. I can institute inventory management systems and things like that. If I understand that I’m at a Taco Bell and cheese is one of the largest inputs I can teach my team to control the portions, right?

So there are things I can do. I have to care, A, right, as a manager and I have to know. Um, the other input is really the labor cost , and labor cost, um, can come in a a few different ways. Like the National Restaurant Association, uh, anticipates that, turnover costs you about $5,800 per employee.

The average quick serve restaurant has 150% turnover. So do the math. I mean, it’s a, it’s a massive number. So the largest [00:14:00] operators, the best operators, like how do we reduce turnover to eliminate the spend? And I kind of go back to my days of operating my own company and being able to get us, um, help us, be one of the top companies to work for.

And a lot of it was educating an employee at hire. Like, what is the mission of the business? What are we here to do? How do we serve a customer and really telling the story. And in a distributed environment, I have a hundred locations throughout the country, how do I tell that story? And garner buy in with a, a new hire that on average is, you know, 24 years old and it’s their first job, right?

Tal Clark: Yep.

Matt Umholtz: So, there’s some storytelling in technology that you can leverage to garner that buy-in. Your general manager has to reinstill that and continually help. Then there’s the element of, okay, now I’ve got this employee onboarded. [00:15:00] How do I speak to that employee in a way that gives me an inclination of how that location is operating? So we’re seeing some of the top operators do 1-week, 5-day, 10-day surveys to survey that new hire on? How is your onboarding experience, uh, based on our company’s mission, summarize it and these three words, pick and choose. Like they’re asking some of those things. It’s giving a good indicator.

So the lower survey scores naturally you map to the P&L and the P&L is not very good. So it’s one of the lower performing locations so that, that initial survey even follow up, or in the HR world, they call ’em stay interviews. But those, um, ways to communicate with the line level actually is a great indicator of the performance at the location, and we’re seeing it map to the P&L impact.

Tal Clark: Yeah, that’s really interesting. And as you know, we’re involved in, in some of the data [00:16:00] we show. Um, it’s where we can also help with that turnover as well, right? And by providing access so many of these employees and the cost of employees and the cost of labor has gone up over the last three or four years, right?

We see that in numbers, in, in one way that, that we try to support and in partnership with you guys and, and directly is making sure they have access to those wages. If you have access to your wages, the demand for higher wages, uh, can go down or be something that’s not top of mind because I just want my money.

I can get my money today. And so we’ve shown, a 35% decrease in turnover where we can do that. Right. So sort of goes hand in hand with what you’re talking about in the labor market as a whole. Um. What do you guys see in regards to, you see the labor cost, you see what’s going on with the labor environment.

You were just talking about some of that and satisfaction in, in the way it’s managed in the restaurant [00:17:00] and what the performance means. Other big cost, uh, is food cost has changed dramatically over the last couple of years as well. Um, what are you seeing there and is that something that we can expect to change or is that something we’re learning to live with in the restaurant space?

Matt Umholtz: Yeah, from a, from a food cost standpoint, we the restaurant operators we talk to don’t, don’t see a future where food cost is gonna contract anytime soon. So, that’s showing up obviously in your, in your menu and your price items and things like that. And I, I haven’t spoke to any that are talking about a strategy and controlling food costs other than good inventory management, good ordering management, good, predictable future sales based on historical sales.

I mean, there are some technologies out there that help with that. That’s, that’s not something we really touch when we’re talking to the, the operators that it’s really, um, how do we control labor cost. And, scheduling and scheduling optimization is a big thing. And you and I Tal, we, we wake up in the morning, we [00:18:00] get in our vehicle and we drive to an office or we drive to see a customer and we never think about is my car reliable and do I have fuel to get there? The average restaurant employee, especially in the QSR space, they wake up and they make a decision to go to a shift depending on if they have enough money to put gas in the car.

Tal Clark: Yes.

Matt Umholtz: So, with products like Instant, they’re able to get money to get to a shift, and that helps from the viewpoint of shift coverage of, hey, this person showed up because we were able to advance some 30 bucks.

Tal Clark: Yeah,

Matt Umholtz: If you look at your averages, it’s probably in the $50 range, maybe per transaction on an an earned wage access. Right.

Tal Clark: That’s right.

Matt Umholtz: And it’s, it’s to cover a, a phone bill or to cover fuel or get a new tire for the vehicle so they can get to work. I mean, it’s simple stuff that you and I and the corporate office at a multi-location operator doesn’t think about.

But that’s the reality on the ground is they need a few bucks to get to their [00:19:00] shift. And if they can’t get there, then they’re gonna go somewhere else. So that leads to, turnover. The other piece, with the average employee being, you know, 24 years old and 33% of the restaurant space being first job, they want ease and simplicity and understanding when I need to work, where I have to work and all that.

So it goes back to scheduling and scheduling optimization. Controlling labor costs for the general manager is shift coverage, but it’s also, hey, sales are bad today. Who do we need to let go home early? So there needs to be this scheduling component tied into sales. Then the predictable nature is… you know, you’re a college football fan.

So there’s a restaurant on campus that, um, last year was an away game this year it’s a home game. Last year, uh, for the same game, it was raining. This year it’s predicted to be sunny. So we need to schedule X [00:20:00] amount because we have a big patio outside, right? So there’s predictive natures of scheduling that are required to help control that fluctuating labor costs, which again, is really the biggest lever, right?

Tal Clark: Yeah. That’s huge. Well, look, I, we’ve been talking in generalities a little bit around, restaurants in general, but is there a story from AllianceHCM, uh, regarding one of your clients that, that really captures what it means to build for growth without losing what made the business special?

I know we’ve worked on a few together, but, uh, just any, I was looking maybe for a specific restaurant that comes to mind for you that tells the story about really where AllianceHCM has, has helped them and, and they’re able to scale and grow the business without losing, you know, what they’ve built the business around.

Matt Umholtz: Absolutely. You know, I think one of the, my, an operator I learn a ton from and a lot of the stories that we. Take into account and we try to [00:21:00] cascade to others. Comes from a, uh, it’s actually a, a location or a business headquartered here in Texas. Um, but they operate, Buffalo Wild Wings locations, Arby’s locations.

It’s a business called Aspire2B, but they, they really operate a fantastic shop. They’re very focused on culture and all the things that they do from a cultural standpoint, um, directly, you know, impact the the P&L, right? So a, lot of the things that they do become best practices for, uh, operators and other operators we talk to.

So thankful for their long term partnership, but also for their ideas on how to operate a, a really well oiled machine.

Tal Clark: Okay. Okay. That’s great. Well, look, Matt, this has been a great discussion. Let’s wrap up here for now and save the rest of the conversation for later. Uh, for our listeners, you can learn more about Matt’s company at alliancehcm.com. Please tune back in for part two of our [00:22:00] podcast where we’ll dive into more about building restaurant industry culture, and operational trends.

Thank you for joining us on the Instant Payments Podcast. And don’t forget to nominate hourly workers for the Workforce Warriors Award at instant.co/workforce-warrior