Restaurant profit margins are razor thin. We’re talking 2-6%, according to the National Restaurant Association. When the margin for error is that small, any inefficiency can ultimately sink your business. One of the most commonly mismanaged restaurant costs is labor – how many employees you have staffing your restaurant for any given shift.
According to the National Restaurant Association’s new 2017 State of the Industry Report, labor cost is a top concern for:
- 15% of fine dining restaurants
- 11% of quick service restaurants
- 9% of fast casual restaurants
- 7% of family dining/casual dining restaurants
A restaurant’s labor spend can be influenced by a number of factors. There are just a ton of ways to lose money – unnecessary overtime, payroll mishaps, early clock-ins, employee turnover.
And do you know where all of those problems start? With the schedule.
Your Bottom Line Suffers
Inefficient scheduling costs you dollars, plain and simple. Overscheduling employees – scheduling too many people for a shift – results in unnecessarily high labor costs, not to mention an unhappy staff. Sure, customers may be getting their orders faster, but you’re bleeding money and your servers’ tips will be smaller at the end of the night.
But let’s take a moment to talk about underscheduling. What happens when you don’t have enough people staffing your restaurant for a particular shift? Maybe you’re trying to operate on a leaner labor budget. Maybe a server couldn’t make their shift. We get it; these things happen! People get sick, shifts get miscommunicated, childcare options fall through.
There’s a whole slew of reasons, but either way, your business takes a hit.
- Servers’ sections expand right off the bat, making them responsible for more guests than they might be able to handle.
- Greet times start to lag.
- Guest rapport turns into rushed order taking and subpar customer service.
All these factors can culminate in guests leaving either underwhelmed by their experience or flat-out disappointed.
But wait, there’s more. Your second turn loses tables to the cafe next door because wait times are growing, and since there aren’t enough hands to get food out of the kitchen, a couple of people return cold or flubbed orders. So now your per-person average (PPA) is down and your food cost is up. And let’s not even mention the guest who went home and left a negative review of your restaurant on Yelp, all because of one rough shift.
Your Managers Suffer
Those lousy situations could have been avoided with a scheduling solution, but your manager was up late making schedules on a spreadsheet. Did you know that restaurant managers spend an average of 4 hours or more manually making schedules? Plus, those schedules result in a flood of calls, texts, emails and sticky notes to keep track of all of the inevitably requested changes.
That’s time your managers could spend on the floor, ensuring that your guests are getting always getting a great experience. Restaurant managers using outdated employee scheduling methods are essentially full-time switchboard operators. Someone calls in to make a swap or request time off and a manager has to be there, ready to answer and make the connection to the schedule.
Scheduling software can help mitigate these problems, resulting in:
- Time saved communicating to employees.
- Time saved figuring out how much staff you need to meet historical guest and sales numbers.
- Time saved approving shift swaps.
- Time saved dealing with payroll questions and tip card adjustments.
- Time savings in every single nook and cranny of an online employee scheduling solution.
And they also help you lose the guesswork. No more under- or overstaffing. With smart forecasting tools, you can create a schedule on a budget that tracks annual sales and labor expenses. No more bringing in extra staff, “just in case.” Forecasting allows your managers to accurately predict the absolute minimum staff needed, and if you know you’ll be slammed one weekend, your manager can adjust a forecast, allowing you to schedule for that surge in business without being blindsided.
“Allowing employees to trade shifts online saved countless hours of time and frustration. I could manage the schedule no matter where I was,” says Spring Valley Tavern Manager Kim Ringo Bright, a HotSchedules user.
Whether it’s time or money, a well-managed schedule will help cut your spending so you can grow those profit margins and, in turn, your business.
Learn more about how to optimize your labor spend and control costs with our free eBook!
With states and local governments slowly lifting lockdown restrictions, restaurants and bars stand to improve revenues with increased occupancy and patrons more willing to eat inside.
A little over a year ago, global industries came to a standstill. It’s since been a challenging time for everyone, and our customers were some of the hardest hit by the economic fallout. We’re proud to have stood by them this entire time, and we want to celebrate this partnership on May the Fourth.
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