Almost three quarters of restaurant owners surveyed in the latest research report on rising minimum wage, The State of Rising Minimum Wage for Restaurants, reported that their labor ratio is above 25%. While any labor ratio under 35% is considered “normal” for most restaurants, restaurant owners will need to be extra diligent to make sure their labor ratio stays healthy and doesn’t begin to eat away at profits. Smart restaurant owners are turning to technology to cope with increased labor costs.
Restaurant technologies like POS labor reports, staff scheduling software, and even robotics can help you make strategic decisions about labor. Here are five restaurant technologies to help you cope with rising minimum wage.
A POS system is your restaurant’s transactional hub. Unlike old-school cash registers, today’s POS systems keep track of so much more than just purchases. Your POS can help you monitor various data points, process payments, manage inventory, and even keep track of labor.
The real power of modern POS systems is in the data they provide restaurants owners and managers. Your POS can empower you with labor reports that will guide you through money-saving decisions.
While most restaurant owners with a POS have the ability to access these powerful labor reports, our research shows that a lot of restaurant owners (39%) are not using their POS to view labor reports.
Restaurant owners and managers who don’t use data to make scheduling decisions are missing out on efficiencies that could save them significant costs. Your POS system’s labor reports can help you know:
Besides generating labor reports, a POS can help you:
Employee scheduling software helps busy restaurateurs schedule their employees. Scheduling software can help you reduce your employee scheduling time by 80%, keeping all communication on one platform where everyone can see it. And, when you integrate your scheduling software with your POS system, you’re able to access powerful data about your labor spending and performance.
Employee scheduling software can help you reduce labor costs by 1 to 3%, which saves you and your managers so many precious hours coordinating staff schedules. Instead of texting, calling, or emailing your staff back and forth to determine their availability and make shift changes, you can easily manage both schedules and communication. Think about how much you pay your managers to make schedules – now think of the labor costs you can save by making their work more efficient.
If you’ve been using pen and paper or a spreadsheet for your employee scheduling until now, a cloud-based technology will be a game changer. Use an auto-scheduling feature or create a template that you can apply over and over again.
Employee scheduling software can also help you cope with rising minimum wage by generating labor forecasts, which can help you manage labor costs strategically. Furthermore, with a POS integration, you can seamlessly track employee hours, wages, tips, and performance all in one place, helping you make smarter staffing decisions.
In addition to saving you money through automation, employee scheduling software can:
A self-ordering kiosk is a terminal that automates the customer ordering and payments process for restaurants. Customers can place their own orders on an easy-to-use interface so that your staff are free to focus on creating a great customer experience.
With minimum wage on the rise, you’ll want to know how and where your staff can have the most impact, while automating repetitive tasks. With a self-ordering kiosk, you can:
Self-ordering kiosks also let you:
Robotics and automation are taking over restaurants around the world, automating everything from food delivery to cooking.
In Boston, MIT students created Spyce, a fast casual restaurant that uses robots to prepare each meal consistently and accurately in three minutes or less. Customers place orders on self-ordering kiosks and robots complete the meal. With Michelin-starred chef Daniel Boulud driving the menu, the necessary human touch is still there, but Spyce is able to keep labor costs low because their staff are machines.
Chicago dumpling hot spot Wow Bao has fully automated several of its restaurants with technology from Eatsa, a platform that combines self-ordering kiosks with Amazon locker-like cubbies that display a customer’s name when his or her order is complete.
Cutting-edge restaurant technologies like robots and automated food cubbies can help you cope with rising minimum wage by decreasing human labor. While there are initial costs associated with installing such restaurant technologies, the technology quickly pays for itself by reducing labor costs.
You don’t have to replace all of your staff to save money on labor with robotics and automation. Choose one area to focus on and explore new technology that will complement your staff’s efforts, allowing them to be more productive.
With a full-service robotics solution for restaurants like Eatsa, you could greatly reduce both front-of-house and back-of-house staff through automated ordering and pick-up.
In addition to reducing labor costs, introducing robotics to your restaurant comes with a ton of benefits that will make the initial investment seem like a steal when compared to the value.
Staff turnover is expensive for restaurants. Every time a staff member has to be replaced, time and money is spent on training someone new, taking away from resources that could be spent on promotion or improving your guest experience in some way.
You can also review your POS labor reports to understand your staff’s performance, and then reward your top employees with free meals, bonuses, or paid time off. Get creative!
According to the National Restaurant Association, staff turnover in hospitality is much higher than in other U.S. private sector industries. A study by Cornell’s Center for Hospitality Research found that from recruiting to productivity loss, staff turnover can cost hospitality businesses an average of almost $6,000 per person. Investing in current staff leads to labor savings over time because you’re not spending thousands on training new staff every few months.
Implementing employee incentive program technology can lead to greater talent retention, which leads to better service for guests, happier, returning customers, and, ultimately, a larger bottom line.
Software like Springzy incentivizes restaurant staff performance by creating contests between servers. You can assign point values for high-margin menu items, and reward your team for selling the most with prizes like digital gift cards.
Employee Incentive Program Technology can also:
Rising minimum wage is hitting the restaurant industry hard. When you’re operating at a profit margin of 10% or less, any increase to your labor ratio can feel like a harsh blow to your bottom line. Rather than firing staff or increasing prices, smart restaurateurs are turning to restaurant technologies to help offset rising labor costs. With a little research and creativity, you can find the right technology solutions that will be kind to your budget – and even kinder to your bottom line.
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