Are inefficient restaurant employee scheduling practices causing you to spend too much money on labor? After food and beverage costs, employee wages are the second-biggest line item in your restaurant’s budget. With competition for employees, new regulations and minimum wage increases driving labor costs up across the country, your business can’t afford a poor labor management strategy. According to Nation’s Restaurant News, in 2016, industry labor costs rose .8% to 30.5% of industry sales.
One major cause of an egregious labor percentage is erratic staffing — scheduling too many or too few people for a given shift. It costs you more than money (though make no mistake, it certainly costs you money.) Let’s investigate:
Higher Labor Cost, Lower Profits: Having too many employees working at one time drives up your labor spend unnecessarily, inflates your prime costs and hurts your profit margins. If you overschedule, you’ll either end up spending too much money or cutting employees’ shifts.
Underpaid Employees, Smaller Tips: Let’s say you consistently have an overstaffed dining room — too many servers, too often. The end result will likely be that your servers won’t make as much money, you’ll pay for their time in the store or you’ll send them home. Even if your servers stay for an entire shift, an overstaffed restaurant results in lower tips for your staff. We all know an underpaid staff is an unhappy staff, and if your employees aren’t able to make ends meet at your business, they’ll go work someplace where they can.
Decreased Productivity: Overstaffing your restaurant doesn’t just waste your money — it also wastes your employees’ time. Too many people working at one time means there won’t be enough for some people to do. And when employees don’t have enough to do, they get bored. Little things start to slip; maybe customers notice employees scrolling through Instagram or chatting about their plans for the weekend. Engagement goes out the window when your employees get bored, and it can affect your customer satisfaction.
Get smart about your labor management and optimize your schedule from the start! You do that by understanding your restaurant’s peaks and valleys — when you’ll have lines out the door and when there will be lulls in traffic. A restaurant employee scheduling software solution with reporting capabilities can give you those valuable insights, taking a great deal of the guess work out of the equation for your managers. By building your schedules based on actual labor data from your past, you’ll optimize your labor spend. Plus, no more employees standing around in the kitchen!
Poor Service, Mistakes: On the other hand, understaffing presents its own list of problems. Maybe you’re scheduling a leaner staff for a reason, tightening the belt to see a boost in revenue. Or maybe you’re getting blindsided on the weekends by circumstances you didn’t foresee — good weather, bachelor parties, tourists, etc. Whatever the reason, stretching your staff too thin can result in poor service. Wait times start to climb, orders get flubbed. It doesn’t reflect well on your business and doesn’t sit well with your guests…
Poor Guest Experience: Your customers are paying for a great meal and a great experience. That’s why they’re opting for your restaurant instead of their living room. But if your staff is stretched too thin, guests aren’t getting that desired experience. Maye your server comes off as unfriendly or simply going through the motions. And we get it, seriously. It can be hard to put that smile on and make conversation when there are only two other people making food for a line of 20 people, but customers notice those things.
Potential for Lost Sales: When service takes too long, potential customers go elsewhere. That restaurant across the street starts to look pretty appealing when you’ve been standing in line for 25 minutes. Even though your labor spend will be lower because you have fewer people working, it can actually result in a decrease in business.
Stressed Staff: And finally, when your employees are given more than they can realistically handle, they get stressed. People get stressed at any job, but not every job has a turnover rate as high as the restaurant industry. Stress and job dissatisfaction will cause your staff to seek employment elsewhere.
You need to put the right number of team members in place at the right time, so your customers get that great experience and you get that ideal labor percentage! You also need to be able to identify your staffing needs for holidays and other special times of the year when you’ll see a boom in business. An intelligent forecasting solution that pulls data from your Point of Sale System to generate optimal shifts could be the fix you need. There are a ton of unknowns that go into making a perfect schedule. Activity Based Forecasting allows you to adjust your forecast for these variables, whether it’s a holiday, a monthly promotion or a big sporting event. You’ll build efficiency, grow your revenue and positively impact your business’s bottom line.
Morale Starts with the Schedule
Your schedules are vital, not just for your operating costs, but for your employees’ lives. They check it when they wake up in the morning. It dictates when they work and when they have downtime. When they’ll get time off for that big date, and whether they’ll have money for it. If your scheduling practices are unpredictable or erratic, it affects your bottom line, but it also impacts how your employees make decisions about their lives. Optimizing your schedule will go a long way towards happy and engaged employees, keeping your turnover rates low and guests satisfied.