The restaurant industry faces an uphill battle with labor costs on the rise even as sales slump. Consider: According to Nation's Restaurant News, same-store sales fell 1.1 percent in May 2017, down 0.1 percent from April.

Schedules are key to labor savings in restaurant management. A recent study by Aberdeen Group found that 66% of organizations integrate time and attendance scheduling, and that integration can reduce time spent on workforce management, improve the accuracy of workforce data, and reduce overall labor costs. The use of online scheduling solutions can also help employees see schedule changes at a glance and request changes pending management approval. But here's the thing: Scheduling doesn't happen in a vacuum. Just copying and pasting last week's schedule into the next won't translate into better margins.

Maximize Scheduling With Internal Metrics

Internal data is valuable when used to maximize scheduling impact. For restaurant management, some of the most valuable metrics come from the following three internal sources.

1. Point-of-Sale (POS) Systems

What are you selling? How much of it, and when? POS systems let you determine what's being ordered most often — if drinks and quick turnover food are your biggest sales drivers, you can likely reduce table service staff with minimal impact. If more complex menu items are the core of your revenue, you need enough trained staff to meet demand. It's also worth leveraging a labor management system which integrates type of food service data. For example: table service versus counter ordering versus buffet offerings. Each comes with different labor costs and staffing requirements that can vary by location, time of day or day of the week.

2. Overtime Reports
Are certain employees working more overtime than others? How often, and how much? As noted by FastCasual.com, labor management and scheduling systems that flag number of hours worked by day or by week, and draw attention to people that are approaching overtime, can help identify outliers and reduce the amount of overtime you need to pay out every month.

3. Early Clock-Ins and Improper Job Codes
While time clocks provide great data and governance, they also reveal a problem. Employees learn to game the clock, and can manipulate when they punch in to work in their favor. Punching in a little early or out late doesn't sound like much, right? But with even 10 percent of staff clocking in early every shift, you could lose almost $10,000 per year. The solution? Enforce start times integrated across your POS systems and labor management tools that only allow employees to clock-in five minutes before their shift. The same system can be used to ensure that employees are clocking in under the right job code, since different positions — drive-thru, cashier or order runner — may have different pay rates.

Anticipate Traffic Using Outside Sources

Internal data offers a solid starting point for labor management in the restaurant industry, but some of the most valuable metrics come from external sources. Weather is a good example; if you've got a patio and rain is in the forecast for the next few days, you don't need as much staff. If a heatwave is on the way, consider putting some employees on call. Seasonal events also make a difference — are there local festivals or celebrations that will impact the amount of foot and vehicle traffic near your business? Take this a step further by doing some research. If a college-aged crowd is on the way, make sure you've got enough staff to provide quick service, cleanup and turnaround. If you anticipate a lunch crowd from a business conference demographic, schedule more experienced servers who can provide the ideal dining experience. It's also worth factoring in the basics: What season is it? What day of the week? Is there a three-day weekend coming up? Being over- or understaffed one day won't break the bank, but think about the impact of this loss applied month-over-month and year-over-year.

Refine Your Scheduling Techniques

You can use all the good data and inputs you want, but the industry reality is that customers aren't always predictable. Nights that should be busy can be strangely quiet, while slow days can ramp up into complete chaos. How do you account for the unaccountable? Recognize the value of employees. Not all staff are created equal. Those just starting out or coming from another restaurant may need more training and oversight than your veterans, and some employees just have a knack for handling difficult customers or huge tables. The goal is to find tools that can consider skills and proficiency levels when scheduling so you're able to ensure the right mix of newcomers and top performers. Next, refine your scheduling techniques with staggering and precision:

  • Staggering is a common scheduling practice that has employees leaving or arriving in "blocks." While straightforward, this method can leave you open to problems with overlap and shift change, especially if the restaurant is busy. Instead, stagger shift changes at 15-minute intervals to make sure there's enough time for new arrivals to get up to speed and for managers to determine if they need to ask current staffers to stay longer.
  • Precision is a practice where you start by scheduling breaks and staff meal times prior to shifts and make sure you have sufficient coverage and that this data is readily available to all employees. Combined with analytical data about historic sales and predicted customer turnover, it's possible to improve your staffing precision and bring on the right people at the right time rather than simply over- or understaffing and hoping for the best.

Know Your Targets

Ultimately, none of this matters unless you can tie labor costs and efficiency to budget and revenue. Ideally, tie your labor spend to total sales to determine your average labor percentage. Know your targets whether that's 15% or 20%,and manage them. Generally speaking, lower numbers are better but watch out for percentages that are too low, since this could indicate chronic understaffing and lead to customer dissatisfaction.

The restaurant industry is changing. With sales declining and labor costs increasing, maximal revenue doesn't rely on turnover alone — employee and schedule management play a critical role in serving up long-term savings.

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Tags: Performance Management Time and Labor Management