It’s no secret, labor represents a major issue facing the restaurant industry. Not only is it a significant issue all foodservice operators must address that is impacting "unit economics," it is getting more complex to deal with every day.
It used to be that restaurants had to worry only about the hourly cost of labor increasing. Nowadays you add to that the challenge of finding labor to staff the restaurants, driven by lower unemployment rates. All this in addition to government regulations. What can operators do to deal with the current labor challenges?
I offer three categories of solutions: You can have the employees work harder, work smarter, or not have to do the work at all.
- Work Harder: This is the first line of defense; do more with the same labor. The problem with this approach is that even though it can be attained in the short term, it may not be sustainable in the long haul, let alone delivering the same result. Additionally, part of working harder has to do with tenure and in a time of increasing turnover, experience at times is hard to get.
- Work Smarter: Getting done what needs to get done in a more efficient way, including applying different techniques to executing and managing labor. This speaks to optimizing all the operating parameters – the, processes, procedures, platforms, products, place design, etc.
- Not Working at All: Although initially this would suggest giving up, what I mean is still doing the tasks necessary to deliver the brand promise but leveraging food, equipment and technology platforms. (More on this in a minute.)
Here is a simple (real life) example that may help you understand what I mean. Cherry tomatoes that need to be cut in half as per the current operations specification.
- Work Harder: Figure out how to cut the cherry tomatoes in half (one at a time) faster.
- Work Smarter: Put a bunch of cherry tomatoes in between two trays and slice them at the same time by running a knife between the two trays.
- Not Working at All: Change the specification where the cherry tomatoes do not have to be cut in half. Perhaps the consumer is fine with whole cherry tomatoes or you can even buy them already cut.
Another example I would offer you is the application of value-added products, especially those that need to be marinated, cut, baked/steamed/sauteed, cooled/refrigerated, stored and then set up in the work station before serving them to guests. How many proteins, vegetables and other ingredients do you handle several times before they make it to the customer? I realize that value-added products carry with it a food cost increase, but as labor costs keep going up, the payback is easier to attain for these types of value-added products.
In the area of working smarter, it’s critical to have the right labor management system; one that bases deployment based on the work content required to do the different tasks. For a concept that does a lot of prep, doing this is of utmost importance to ensure prep labor does not become an entitlement.
Other ways to deal with the labor challenges is to offer menu items, or a menu service offering, that require less labor. Catering represents one example of working smarter because products get prepared in bulk and the cost of labor per unit sold is much lower. Online orders represent an example of not working at all because the order entering is done by the customer and cash gets handled electronically, thus requiring less labor.
No doubt the solution to dealing with complex and constantly evolving labor challenges the industry faces requires a combination of the three aforementioned categories and potentially other solutions.
Which ones are you considering or already doing?