4 Ways Technology Can Reduce Labor Costs Staffing strategy
A healthy profit margin for a restaurant depends on controlling key expenses such as food and labor costs. Today’s technological tools for restaurants can help optimize these two costs in a number of ways.
Part one in this series focused on the application of technology to control food costs, and this issue describes four ways restaurants can use technology to increase their profit margins by optimizing labor costs.
1. The impact of data-driven planning
A restaurant is constantly generating data, which can be leveraged to make better planning decisions that match labor expenditure and labor needs.
For example, sales forecasting is a powerful restaurant management tool that can pull historical sales information from a point of sale system to project sales over a comparable time period.
With sales forecasting data in hand, managers can design schedules that match labor to sales, optimizing labor hours. This can create a more efficient use of working hours than writing a schedule based on last week’s schedule.
Even with the best-designed schedules, managers may still need to make decisions as service needs change. Real-time access to labor spend, compared to sales targets per labor hour, can help managers make immediate decisions about the strategic use of breaks, outages, or downtime. calls.
Other features of the scheduling software can help managers track and minimize potential employee overtime or define enforcement metrics for arrival and departure times.
2. Hiring, planning and payroll tools
Technology tools can now streamline many of the most time-consuming tasks for restaurant managers, from hiring to planning and payroll.
Hiring a restaurant has always been a very manual process and based on a paper application. Today, tools like an applicant tracking system can save managers time and make the process easier for applicants.
Features such as screening questions or assessments via an ATS can help restaurants assess how interested a candidate is in a position through their willingness to take additional steps, before inviting the candidate for an interview. anybody.
For example, Sweet Lou’s, a group of local restaurants in northern Idaho, found that an assessment tool had changed their hiring process. When co-owner Chad Foust scheduled interviews with candidates who had completed the assessment, he reported that nine of the 10 candidates showed up for the interview (compared to previous experiences without prior assessment, where half of those interviewed did not show up for the interview).
In the area of planning, employee scheduling software can help managers streamline the most repetitive and time-consuming elements of the job. Templates, centralized dashboards for shift requests, and sales forecasting integration can help managers create better schedules, faster.
Additionally, leveraging technology tools for HR or payroll can help make processes more efficient for staff. Automating onboarding formalities for new hires, as well as features such as accurate and on-time payroll processing, can offer a double benefit: contributing to a positive employee experience and saving management time.
3. Keep an eye on labor costs
With the right technological tools, restaurateurs and operators can leverage granular data points to make informed decisions about labor costs.
For example, restaurants can track labor productivity as a percentage of sales through data metrics such as customers served per hour of work or sales per hour of work (SPLH). Careful consideration of costs by slice of the day, via daily or even hourly sales forecasts, can fuel decisions about where and when employees are needed most.
And especially for multi-site restaurant groups, breaking down labor costs by location can help operators spot trends where additional training or checks may be needed.
4. The value of employee retention
Recruiting and retaining quality employees is a recurring problem for many restaurants. However, between understaffing issues or wasted resources on frequent training, high turnover is costly. To control labor costs, it’s critical that restaurants strive to improve employee retention in a number of ways.
First, leveraging technology in the recruiting process can help restaurants recruit good candidates. An ATS can help restaurants communicate effectively with applicants and screen applicants. The more streamlined the hiring process, the more time hiring managers can spend developing meaningful relationships with candidates who fit the corporate culture well.
Additionally, the technology can be used to examine the root causes of low retention. For example, if staff members have irregular schedules or do not have enough hours, these problems can increase turnover. A restaurant may need to implement labor cost controls, but regular reviews of employee planning data can also help address staff concerns.
Restaurant owners and operators have more access than ever to the data and software that can improve workforce operations. When applied strategically, today’s technological tools can help restaurants optimize labor costs and improve bottom lines.