Many Australian restaurants, cafes, pubs, clubs, and bars have been feeling the financial pinch ever since Covid-19 first hit our shores in early 2020. We experienced the lockdowns, social distancing, and the loss of hundreds of thousands of international workers here on temporary visas.
With the risk of losing the staff we still have if they aren’t happy with our workplace looming over our heads, we need to focus on how to reduce and manage labour costs for our restaurants. Every dollar counts and if staff are standing around with nothing to do or running around like headless chickens trying to handle a sudden peak in foot traffic, we don’t want to have to source and train more employees to replace those who have just left. This is a costly exercise. It’s time to get strategic!
5 Ways to Efficiently Manage and Reduce Hospitality Labour Costs During the Tough Times of 2022
Successful restaurant owners know cutting costs through effective staff management results in a lean operation that can survive a post-pandemic Australia in 2022. We at Abacus love to see new food and beverage enterprises and proprietors entering the local dining scene; it enhances the overall quality of life, keeps the dining scene fresh, and provides consumers with more options.
We’re also happy when restaurants and cafes currently making their mark in the marketplace become able to scale and expand operations. The result in a thriving food scene together with a boost in economic activity.
Here’s how you can make it happen:
1. Use a Cloud POS System to Optimise Staff Scheduling
A quality POS (Point of Sale) system provides a wide range of useful data that allows you to see which days of the week, times of the day, seasons, and holidays require more (or less) staff due to busy periods or a lull in patrons.
You need to optimise every hour of labour your business invests in. Yes, you are writing staff member names into your scheduling system, but in the end, you’re buying labour from human beings. We want to reduce these labour costs, while simultaneously realising the need to focus on the mental wellbeing of your front and back of house teams.
Busy times are stressful, especially when there aren’t enough ‘hands on deck’. Slow times can be even harder. People staring at the minute hand on the clock, trying to think of another task to perform … the hours drag on and soon they’re looking for the door – not for customers, but for themselves!
Create sales forecasts to predict staffing requirements
When calculating labour costs, you need to consider salaries, wages, overtime, paid leave, sick leave, bonuses, payroll taxes, and superannuation. Employees get paid different amounts, so separate them into groups to make sure you know what managers, chefs, wait staff, and dish washers all get paid. By reviewing your POS labour reports in separate bite-size categories, it’ll help you figure out where you need to cut costs.
2. Empower Staff and Reduce your Turnover Rate
In these harrowing times when everyone is facing potential labour shortages, it’s imperative to ensure your staff are happy. As is the case with all markets, the job market pendulum has now swung in favour of employees. Retaining staff saves you the time and money required to source, hire, and train new employees.
So, in an industry already known for its high job turnover rate, a strategy focused on reducing labour costs needs to consciously aim for staff retention.
Invest in, empower, motivate, and reward employees
Spending money to keep staff happy may sound like an expense you’d rather not have to deal with, but if you play the long game, you’ll know it’ll cost a lot less than having to train new team members.
Analysis of your cloud POS system’s staff sales report provides a clear idea of which employees are bringing in the most revenue. By rewarding team members with bonuses, paid time off, and other perks, the recognition they receive builds pride in their work. The process also shows other staff what they too can achieve if they work that little bit harder or smarter.
3. Staff Training to Expand Skill Sets and Boost Role Versatility
Ever thought of cross training your staff in different restaurant roles? Investing in your staff so they can manage customer wait lists while also delivering meals, cleaning tables, and keeping customers in a good mood via friendly banter is a win-win scenario for all involved. Your staff member feels they’re enhancing their skill set, while you’re ensuring everyone on the team can undertake different roles when the situation requires adaptability.
Stop relying on specific team members for certain tasks
If Jono is the only team member who knows how to make changes to your restaurant table ordering system, you’re in trouble if he suddenly gets sick. Plus, Jenny won’t like it if she always needs to work – even when customers aren’t coming through the door – just because of her high-level front-of-house hosting skills.
When you cross train staff so a handful of people can manage the self-service kiosk, reservation system, or online ordering system on slower nights, you’ll save on labour costs. This is because you won’t be constrained by having just one or two team members perform the task at hand, and it ensures senior hosts like Jono or Jenny are always available on busy nights when their expertise is most valuable.
By enabling team members to work across different roles and responsibilities, they end up working together with more of their teammates. This builds team friendships, collaboration, and overall confidence in relying upon one another.
4. Optimise Staff Scheduling to Minimise Overtime Expenses
You’re working out your staff schedule and there’s an additional shift that still needs to be filled. By knowing which team members have already been allocated their weekly limits, and those who haven’t, you can easily see the right person for the job. However, some nights end up going longer than others, and even ‘the best laid schemes of mice and men often go awry.’ (Even the most carefully made plans sometimes go wrong.)
The answer? Use your POS system to review your team’s hours daily to make sure you’re not paying for overtime you don’t require. At the same time, you can ensure all roles are covered each day, whether its management, front-of-house hosting, table service, or bartending. The key is to make sure each staff member is allocated their fair share of work, no one needs to work overtime unless it’s an emergency, and the business keeps a better bottom line.
5. Capitalise on Modern Automation, Equipment, and Design
Efficiency is the goal when it comes to reducing labour costs. Employing modern high-tech services like online ordering, self service kiosk for restaurants, QR code ordering, and restaurant table ordering system is a solid investment in automating processes at your establishment.
Faster moving queues, quicker table turnover, and a boost in online orders equates to lower labour costs, higher sales revenue, and less chance for human error. These technologies, which all function via your cloud POS system, empower you to proactively address staffing requirements. The days of mismanaged evening rushes and tortoise-speed nights can now become a thing of the past!
Get in touch with Abacus and we’ll help you steer through the turbulent waves caused by the pandemic and its subsequent staff shortages.