Ask the Expert: Managing labor in a new era

By Rick Braa, CHAE

Q:Our labor cost is growing rapidly with the tight labor market, wage adjustments and minimum wage increases. What are some of the best ways to deal with this?

A:The number one concern of operators today is labor management and cost. While this seems to be a different scenario from times past, the industry has struggled with labor issues for decades. By and large, the industry is viewed as offering low-paying, high-stress jobs. While changing perception in the public view will take time and effort, hiring, reducing turnover and improving performance is controllable at the location level.

Recruit constantly. Needs-based recruiting is not a strategy, it’s a reaction. If a person leaves a company, most organizations scramble to cover shifts while quickly interviewing to find a person to fill the vacancy. Best practice companies are always recruiting and interviewing. The message to top performers is to have hope for an infusion of talent. Those at the bottom know it’s time to perform or leave. By recruiting constantly, a problem employee can be replaced with a qualified candidate before the problem employee creates a reactionary set of events that usually result in the hope that a new person will work out. Be sure to advertise the position with the employee in mind. Employees want to make a difference and work for a company that does, too. Move fast, contact candidates, interview and offer jobs quickly. The good ones don’t last.

Train to understanding. Turnover is expensive. Estimates put turnover of crew members at $2,000 each and managers at six to nine months of salary. Effective training reduces turnover by fostering confidence. Train to “understand WHY” not just “do.” Employees can know a lot about something but not really understand the importance of it. “Why” offer appetizers, beverages, special entrees, dessert, a legitimate greeting and thank you? “Why” have excellent product quality prepared quickly in a sparkling clean facility? People can forget what they know, but they never forget what they understand. The most successful companies continually train employees to a level of understanding and enjoy lower turnover.

Cross train productivity at every position. Every person in the location needs to know at least two positions and hold one that produces revenue. For example, employees who can serve should also know how to run the desk, run food and bus tables. Line cooks should know how to prep, and prep cooks should know the line. Only those who produce revenue should be working. Support staff should be minimal or eliminated and never be equal to or exceed producers. Dish, bus, front desk, runner and barback should all be filled with employees who are trained in other positions to produce revenue.

Start fast, stay fast. A body in motion stays in motion. A body at rest stays at rest. When an employee arrives at work, make sure the work is ready and manage those minutes at the start of the shift with diligence. The faster the start, the faster the performance. The goal is to increase productivity daily. Match sales every 15 minutes to needed employees every 15 minutes. Matching busy times with the most productive, fastest people produces the best set of results. Speed builds check average. When the team is fast, there is plenty of time to spend at the table refilling drinks, offering appetizers and desserts, and taking the time to describe special items. Speed builds repeat visits, which builds sales by putting the guest in charge. The more disposable time guests have during their experience, the freer they feel and the more likely they are to return.

With the high cost of labor and no end in sight for wage increases, businesses need to be strategic with a great recruiting plan, minimize turnover with training to understanding, cross train all staff to produce revenue and manage pace by keeping staff moving fast. By always keeping these tactics in motion, higher revenue and productivity will reduce the pain of a tight labor market.

For a more information on improving profitability and driving sales, contact AMP Services at rbraa@ampservices.com. Rick Braa is the founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability. ■