Workforce Management Strategies to Reduce QSR Spend
We know COVID-19 has financially stressed the fast casual and quick service restaurant industry as never before. With reduced and uncertain demand, stiff competition, and varying regulations, keeping a restaurant chain profitable is a major challenge. But in the long run, boosting the fast-casual and quick-service bottom line today will be crucial to thriving.
Operations leaders can’t control everything. But there are immediate steps you can take to reduce unnecessary costs and boost revenue. For instance, some restaurants are trimming the menu, optimizing layouts, and more to improve service (even with fewer team members).
While these are reasonable steps, there is another way to tame labor spend—which is one of your largest controllable expenses. And corporate can do this by leveraging solutions that streamline operations and better match team members to customer demand.
Pinpoint Labor Spend
Restaurants can cut spend by reducing headcount—but this can sacrifice customer service. However, there is a smart way to overcome the challenge. To reduce excess costs, start by identifying key workforce-related processes that are typically not optimized. They include the following situations:
- Resources mismatched to demand levels: Without precise and rapid alignment between labor schedules and customer demand, you may have too many team members assigned to shifts with little customer traffic—or too few team members to man peak shifts. This mismatch can result in unnecessary labor costs during slow periods—and unplanned overtime during high traffic hours. It can also leave you shorthanded for crucial hygiene maintenance or other safety functions, and damage the customer experience.
- Noncompliance with labor laws: Ensuring compliance is difficult enough for individual restaurants. But for a chain with locations across multiple regions, this is a major productivity impediment for management. And noncompliance with labor laws can also incur major expenses, including fines caused by minors working extra hours, as well as earned sick time and records laws violations.
- Early employee clock-ins. As a recent TotalFood Service article says: “Every 15 minutes extra they add to their time is one step closer to overtime.” If there is no vigilance, employees may “ride the clock,” intentionally or not.
- Late clock-outs: Even after employees are told to punch out, they may not do so. This means the restaurant pays for unproductive time—something that should never happen, particularly when funds are tight.
- Timekeeping errors: Team members may be punching in with the incorrect job codes. When pay rates differ by description, the wrong code could mean overpayment—or underpayment—and that may cause bigger problems down the line.
Solution To Cut Labor Costs
Historically, improving restaurant workforce operations cost managerial time, as the processes for this were error-prone, clunky, and paper-based. Additionally, these processes often lack the visibility and analytics to manage by exception and power long-term workforce optimization.
Fortunately, there are now on-demand solutions that are rapidly rolled out and can soon deliver demonstrable ROI. They include:
- Workforce scheduling: By leveraging artificial intelligence capabilities, a scheduling application can simplify labor budgeting, forecasting, and scheduling processes. The solutions draw from accurate customer demand and employee availability data, reducing scheduling inefficiencies, and ensuring the best team members (the ones with appropriate skills, background, and so on) are on the restaurant floor when needed. Restaurant managers can save hours every week on scheduling. This way, they can focus on higher-value work, spend more time on the floor coaching team members, and ensure the customer experience improves.
- Time and attendance: These apps offer the ability to accurately monitor time entry, labor tracking, and payroll integration. Managers can receive real-time notifications about potential violations or irregularities. And using touchless technologies—such as facial recognition or voice control—employees clock-in safely and with complete accuracy. Such a system supports complex pay rules, labor laws, union contracts and more. It also ends early clock-ins, significantly reduces late clock-outs, and eliminates scheduling and timekeeping conflicts.
- Employee-self service solutions: It’s likely your team members are busy people, with families, hobbies, second jobs and more. A mobile-enabled self-service application allows employees to quickly view their schedules, submit time-off requests, adjust availability, and issue sick-leave notifications. Ultimately, your employees are empowered to manage their own schedules, in compliance with corporate guidelines, which improves their morale, reduces last minute call-outs, and more. This saves you money by retaining the employees you want to keep and reducing manager workload.
These applications are at work every day for restaurants in the real world: McDonald’s UK offers an example of such success. After a growth spurt, McDonald’s UK sought to rein in costs via Reflexis solutions. In its pilot stores, McDonald’s lowered crew turnover by 32%, with a 0.81% increase in profit.
For more insight into how you can address COVID-19 at your fast casual or quick service restaurant business, contact us at firstname.lastname@example.org and we’ll set up time to chat.