Article

3 ways restaurants can optimize labor efficiencies and cut costs

Between higher wages and new labor regulations, restaurants are facing a labor crisis — and their existing, outdated processes are doing anything but helping the problem.

November 11, 2015

By Joshua Ostrega, Co-founder and COO of WorkJam

Between higher wages and new labor regulations, restaurants are facing a labor crisis — and their existing, outdated processes are doing anything but helping the problem. According to a new study by WorkJam, an employee relationship management platform for the service industry, outdated and inconsistent scheduling practices are running rampant in the majority of restaurants — and it’s taking a toll on their bottom line.

WorkJam’s study found that over 57 percent of restaurants rely on manual processes when scheduling hourly employees, leading to labor inefficiencies, schedule inconsistency and, even worse, employee turnover. According to the study, more than a third of restaurants reported a quarterly turnover rate of at least 26 percent, and 33 percent claim that this rate has increased over the past two years. With the cost of replacing one minimum-wage worker amounting up to $4,000, restaurants can't afford to have their employees regularly jumping ship.

As restaurants face increasing challenges presented by higher wage requirements and new scheduling regulations, offsetting costs and improving labor practices is more important now than ever before.

Here are three ways restaurants can optimize labor efficiency while boosting the bottom line:

• Prioritize shift-management — Creating schedules that work for both employers and employees is a complex issue. Sixty-eight percent of employers surveyed in WorkJam’s study said the most difficult part about scheduling is setting shifts that align staff availability and business needs. With scheduling being such a cumbersome process, many managers leave it to the last minute — and as a result, the majority of employees (56 percent) receive their schedules a week or less in advance. Such a tight timeframe leaves workers struggling to accommodate personal obligations such as education, child care, elder care and/or other jobs. Due to conflicts, some of the employees' shifts won’t get fulfilled, which ends up having a direct impact a restaurant workers economic well-being. When this happens often, there is little incentive for the worker to stay.

Rather than fall victim to the current problematic situation, managers must start making shift management a priority and seek out new employee-centric processes that give employees more say in their schedules. By accommodating employees' preferred shifts and availability, restaurant managers will reap the benefits of having happier, more engaged employees with lowered absenteeism and turnover.

• Streamline communication — From phone calls to emails to handwritten notes, restaurant managers juggle a myriad of channels when communicating with their staff about availability and shift changes. Based off the 84 percent of employers who have processes in place for employees to share availability before schedules are made, 43 percent of workers submit written requests, 31 percent have a conversation with their shift manager, and 11 percent submit availability via email. When managing these varying forms of communication, matching employee shift requests and availability becomes less of a priority and simply getting a set schedule becomes the most important to-do.

By opting for an integrated communication channel that all employees can access autonomously, employers can cultivate consistency and alleviate the superfluous stress accrued from communicating across multiple channels. In fact, 65 percent of workers say they'd try harder to find shift replacements if they had an easier way to communicate with coworkers, while 53 percent would be more likely to pick up open shifts. When restaurants are willing to implement more efficient systems that allow employees to communicate across the company, they enjoy simpler, faster management as a result.

• Eliminate manual processes — According to WorkJam’s study, 67 percent of employers still use paper schedules and spreadsheets to create hourly workers' schedules, compared to the 31 percent that use online tools or shift management software. On top of this, 68 percent of employers still share staff schedules via physical charts posted in breakrooms or other communal areas.

With the majority of restaurant managers still using manual processes for scheduling, it's near impossible to meet every employee's scheduling needs. And, regretfully, employees end up suffering. The study found only 29 percent of workers rarely receive consistent schedules and — despite nationwide pushes to stop "clopenings" (back-to-back closing and openings shifts) — 48 percent of employers report their employees are frequently or sometimes scheduled to work these shifts.

These unstable and inconsistent practices often lead to understaffing, with 46 percent of employers reporting frequently or sometimes being understaffed. This not only disrupts morale, but also hinders operations. In fact, the majority of employers claim that being understaffed compromises the customer experience, which can easily discourage restaurant-goers from dining there again.

To combat the consequences of manual processes, restaurant managers must seek out more efficient processes. Though technology can optimize efficiencies, these solutions must be paired with transparent communication between managers and workers in order to be a success.