Article contributed by Greg Staley, CEO, SynergySuite
Over the recent months, many restaurants across the country have been focused on the possibility of a $15 an hour federal minimum wage. However, in New York City, $15 an hour has been the reality for more than two years, Westchester and Long Island will increase to match the city by the end of 2021, and the rest of the state recently increased $.70 to $12.50 an hour.
Does this mean wage increases won’t matter as much to employers in the New York City metro area, who are already accustomed to some of the highest minimums in the country? While the increase won’t be as large in New York as other areas of the country, the rising wages in New York state, Westchester, and Long Island will still eat into your profitability. Plus, restaurants in the city are still adjusting to the $15 an hour minimum on top of trying to stay afloat throughout the COVID-19 pandemic.
So how do you balance high wages, profitability and keeping staffing at appropriate levels needed to maintain customer service? An increasing number of restaurants are turning to labor management software to provide predictive schedules that are optimized based on sales forecasts, helping avoid overtime and over or underscheduling a location.
Here’s how modernizing labor management tools will become a key part of navigating the increasing wages:
1. Smarter schedules
No matter how great a manager you have, writing schedules is still partially guesswork. And if you’re onboarding a new manager who doesn’t know the location, any rookie mistakes they make can kill your profitability for the week.
Modern labor management tools take the guesswork out of scheduling. By integrating with your point of sale system, you can bring in historical sales numbers, forecast your sales and predict optimized labor levels based on the forecast. This allows you to avoid the restaurant labor pitfalls of over or underscheduling, where you can either hurt profitability or frustrate customers with poor service.
In addition to optimizing the number of people you need for opening, closing and peak times, good labor management software will help you avoid paying high overtime rates by giving managers alerts when scheduling an employee would push them into overtime. It will also help you enforce things like mandatory breaks, time off between shifts and caps on hours worked for minors.
Combining these capabilities into a single system frees up more time for your manager to spend with employees and customers, lowers your prime costs and helps you maintain compliance on labor regulations.
2. Data-based decisions
Operators who aren’t collecting data, or have no way to parse it, are making decisions based on their gut. Unfortunately, this can create uncertainty and lost revenue.
We often talk about data-based decisions in the context of menu mix, marketing promotions and customer experience. But the data you gather can go far beyond that. With minimum wage hikes on the horizon for the metro area, plus increased competition for labor, you will need to be able to better manage things like fluctuations in labor, employee retention, overtime management, break compliance and more.
Gathering data and making it easily accessible and understandable allows managers to make more informed decisions about who to schedule and when. Plus, a good system will also be able to aggregate information from all locations so you can view labor trends at a corporate level to see if there are any areas that can be improved across the brand.
Manual processes make both collecting and analyzing data difficult, and outdated software lacks the integrations to the rest of your tech stack, so a more modern system is critical to effectively managing labor as maintaining profitability gets more difficult.
3. Integrated tech stack
To run a restaurant well in our industry today, your software needs to be talking to each other. Having a POS, a scheduling app, an inventory app and a clipboard for your daily checklists is better than nothing, but you’re still leaving so much information on the table when they don’t integrate.
When you move to an effective labor management platform, you get more than just an app-based scheduler. A good system will let you schedule, view analytics, combine data from your other systems to see things like daily P&Ls, and push information to your payroll software.
Integrating your restaurant technology stack gives exponential returns in terms of your ability to see and control what is happening in each location, maintain margins, and keep your employees happy.
It’s normal if you are still struggling to plan for the future after the last year of disruption, however labor cost increases are only going to continue contributing to that disruption. Forward-thinking brands are finding the benefit in modern labor management solutions to help them control prime costs now and in the future.
About the Author: Greg Staley is the CEO of SynergySuite, a back-of-house restaurant management platform. Greg focuses on facilitating better visibility and increased profitability for restaurant chains through the use of intelligent, integrated back-of-house technology. For more information or to discuss SynergySuite’s solutions, please contact Greg at greg@synergysuite.com.
