Washington Restaurant Magazine September 2014 by Washington Hospitality Magazine

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Inside Features

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Restaurants embrace the versatile QR code

Restaurant industry growing, but faces challenging new labor market

Managing your staff while planning for lower guest counts in September

The restaurant industry workforce - young, educated and moving upward

Keep labor dollars from slipping through your fingers

Other stories

Scan

www.warestaurant.org

Lex on Tech: Why QR codes?

News Briefs

Unions and restaurants – How we got here

The impact of your vote and what to expect in 2015

Employment trends quick survey

WRA members and Seattle’s Union Gospel Mission

Hire teens?

Calendar/New Members

Marketplace

Keep labor dollars from slipping your fingers

On the cover

Labor and workforce issues are always big concerns for restaurant operators. Washington Restaurant Magazine’s Labor and Workforce edition provides insight on how to navigate these potentially treacherous waters, and where the current trends may be leading.

8/26/2014 7:09:29 PM

September 2014 | 5

Lex on Tech EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Managing Editor, Paul Schlienz Contributing Editor, David Faro Contributing Editor, Stephanie Davenport Research Editor, Sheryl Jackson Art Director, Lisa Ellefson WRA EXECUTIVE COMMITTEE Chair, Phil Costello Stop n’ Go Family Drive In Vice Chair, Chad MacKay El Gaucho Hospitality Secretary/Treasurer, Mark Chriest Oki Developments, Inc. Immediate Past Chair, Bret Stewart CenterTwist, Inc. WRAEF President, Gary Sutter Northern Quest Resort & Casino WRA EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Petrina Director of Government Affairs, Bruce Beckett Director of Communications & Technology, Lex Nepomuceno Director of Education, Lyle Hildahl Director of Internal Operations, Bekah Cardwell

510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org

Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification.

Why QR codes? By Lex Nepomuceno, executive editor I have to be honest. It took me a while to embrace the QR code. I thought it was just a fancier version of the barcode, and expected it to slowly disappear with the adoption of wireless transaction technologies, such as near field communications (NFC) or radio frequency identification (RFID). Well, I was wrong. When I learned that QR codes can carry information vertically and horizontally (barcodes only carry information horizontally), it made sense why QR codes have become almost ubiquitous. QR codes carry much more information in a smaller amount of printed space. They are able to be read in 360 degrees from different directions, so there is no interference or effects from backgrounds. And finally, QR codes provide design flexibility, allowing companies to get creative with how their codes look and even include logos or pictures. Thus, I quickly shifted from asking “Why?” to “Why not?”

Figure 1 - Go from picture to QR Code!

Figure 2 - I used a black and white photo of myself to create this QR code, which leads to my LinkedIn profile page.

Another nice thing about QR codes is that they can be directed toward different types of information. Mostly, businesses point codes to Web addresses, but they can also be pointed to contact information, plain text, phone numbers, e-mail addresses, text messages, geolocation, calendar entries and wireless networks. Whenever you utilize a mobile app as a boarding pass at the airport, that is a QR code. The possibilities are truly staggering. Now that you may see the value in QR codes, how do you get the most out of them? 1. Because most people will be using a mobile device to scan the QR code, make sure to provide a mobile-optimized experience after the scan.

Reproduction of articles appearing in Washington Restaurant Magazine are authorized for personal use only, with credit given to Washington Restaurant Magazine and/or the Washington Restaurant Association.

2. Remember that “discount coupons” make up 45 percent of the reason why consumers scan QR codes in the first place. Therefore, a great way to train your customer base to use QR codes is to entice them with compelling offers to get them to come back.

Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, its Board of Directors, staff or members.

3. Don’t forget to test your QR code in multiple devices before you invest in printed materials that contain the code. Among the restaurant staff, there will certainly be someone with an Android phone and someone with an iPhone, so have each person test scan the QR code with different apps. This little exercise could save you thousands of dollars in printing later!

Products and services advertised in Washington Restaurant Magazine are not necessarily endorsed by the WRA, and do not necessarily reflect the opinions of the WRA, its Board of Directors, staff or members. ADVERTISING INQUIRIES MAY BE DIRECTED TO: Nina Booth Allied Relations Manager 425.220.7778 ninab@warestaurant.org Washington Restaurant Magazine is published monthly for Association members. We welcome your comments and suggestions. email: news@warestaurant.org, phone: 800.225.7166. Circulation: 6,310.

Remember, QR codes are just another way for parties to exchange digital data, so keep that in mind when they are integrated into your business’ operations or promotional material. It shouldn’t be forced, and the users should feel like they are getting something of value when they go through the trouble of scanning. Do you have creative ways you use QR codes in your business? If so, let us know at media@warestaurant.org, and we may interview you for our DineNW podcast/radio show. ■

6 | |www.warestaurant.org warestaurant.org

Primary Source of Information | News Briefs 2014 edition of WRA Marketplace to be launched this fall The Washington Restaurant Association has again partnered with Overland Park, Kan.based Strategic Value Media—a leading nationwide provider of print and digital media solutions for national, state and local trade and membership associations—to produce the 2014 edition of WRA Marketplace—the premier resource of relevant products and services for restaurant professionals. This will be the second year that the Marketplace will be produced. Like the 2013 version, the 2014 edition of the Marketplace will feature updated and expanded company and product listings in addition to other valuable information relating to the restaurant industry. The Marketplace provides WRA members and other industry professionals with an efficient way to browse for goods and services. The Marketplace also offers restaurant suppliers and companies exceptional visibility by showcasing their products and services to a targeted, industry-specific buyer group. The 2014 Marketplace will be accessible through warestaurantmarketplace.com this coming fall, and you can currently view the 2013 Marketplace there. ■ FDA says restaurants should ensure glutenfree claims are consistent with federal definition The Food and Drug Administration (FDA) indicated this week that a new federal standard for “gluten-free” labeling is not technically binding on restaurants (except for items that restaurants sell in pre-packaged form), but that restaurants should ensure any gluten-free claims they make are consistent with the new federal definition. The FDA’s final rule on gluten-free labeling took effect August 5, and largely applies to manufacturers that make “gluten-free” claims about packaged food and beverage items. The FDA published the final rule a year ago, and gave companies a year to comply. ■

State’s foodservice industry gains more than 11,000 jobs since May 2013 Employment numbers show a positive trend. Where 209,200 people were employed in Washington’s foodservices and drinking places job category, in June 2013, there were 220,700 people in this same category one year later. This is a gain of 11,500 new jobs. Of course, this is good news, but it must be viewed within the prism of a tough business environment where one in four restaurants goes out of business within its first year of operation, and a nationwide unemployment rate of 12.2 percent when those who have given up looking for work are included. The Washington restaurant industry’s upswing is no anomaly. These figures reflect positive trends for the restaurant industry nationwide. According to the U.S. Bureau of Labor Statistics, during July, eating and drinking places added a net 18,600 jobs on a seasonally-adjusted basis. This is the 53rd straight monthly increase and 25th consecutive month with gains of a minimum of 10,000 jobs. ■ WRA’s Golf FORE! Education a big success Thanks to everyone who attended the WRA’s great Golf FORE! Education fundraiser, August 5, in Auburn. It was a beautiful day, and we had a great turnout. Special thanks to our sponsors for helping us make Golf FORE! Education happen. You can view a video with some of the highlights from this fun event. See you next year! Check out the highlight video at http:// wra.cc/wragolf2014. ■

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Industry Outlook | WRA President and CEO ART 3 P ICLE 1 ART O SER F A IES !

Unions and restaurants – How we got here

Anthony Anton, president and CEO

The scene in front of us is straight out of an old western – two of the most well-known gunslingers standing around on either end of town; a silence settles over the buildings as each awaits the other to make the first move; the innocent townspeople stare out the dirty windows, hoping they don’t become victims of the pending crossfire while the town leaders are pacing, worried how bad the aftermath might be.

older siblings land jobs making $50,000 out of school in the 1990s and the 2000s, but for recent graduates, expectations didn’t match reality. This combination of high expectations and extended unemployment created an opportunity for disgruntlement to develop among young adults. Most economists say this is a short term anomaly, so unions feel their window to take advantage of this dissatisfaction is small.

Instead of wearing cowboy gear, one of the gunslingers is dressed in a purple shirt emblazed with union letters, and the other is wearing a burgundy visor showcasing a corporate logo. Instead of guns, both have millions of dollars in their holsters. It’s big unions versus big business. This is not David vs. Goliath; this is two Goliaths. Why is it coming to this? And, more importantly, how does it impact you, the local restaurateur, who is just trying to make a living?

SEIU is breaking the mold

Here are some factors that have gotten us into this standoff: Desperate times, aging concept After dominating the American workforce and labor policy for nearly a century, union power is slipping fast. The unions all but disappeared from the restaurant industry in the 1980s with only a handful of union restaurants existing in Washington outside of hotel or public properties. There are few industry veterans still around who have any experience in union negotiations, union management or the complicated NLRB rules. So for most, unions are a complete unknown that generates fear. Even in one of the most liberal states in the country, the percentage of union households has dropped drastically. But unions have no intention of going quietly into the night. Today they still have millions to throw around and incredible political influence. National union leaders have been very vocal about the crisis they are facing and that now is the time to turn the tide. Recession’s impact on the under 30 crowd and starting jobs The Great Recession created an atmosphere where people didn’t move up from the entry level job. Twenty-somethings had high expectations for the easy life after watching their

The general exception to the shrinking labor world has been the Service Employees International University (SEIU). Breaking the traditional approaches of labor organizing, SEIU has emphasized things like branding, establishing PR arms and workforce centers like the Restaurant Opportunity Center (ROC), hiring non-union workers to do its protesting, fully engaging social media, seeking out-of-the-box angles to force its agenda and going out of its way to hire young, idealistic staff. SEIU has spent nearly $38 million in the past year to organize protests and create false appearances of grassroots movements. While union traditionalists get frustrated by its young and brash buck, many recognize that if anyone can save the union movement over the next 15 years, it’s SEIU. The explosion of franchising For much of the 1980s and ‘90s, the growth in the restaurant industry was centered on independents and the demand for more variety. This did not lead to unionization because most restaurants were small businesses, which aren’t profitable for unions. But as businesses learned how develop efficiencies, branding and effective franchise models, the 21st century witnessed a boom of large franchisors. These corporations can utilize size and wealth while keeping capital costs down. Now union organizers can finally see enough dollars to make it worth the high investment costs of unionizing our industry. So now their focus has turned to us. And the tactics and reasons aren’t the same as when our grandfathers were part of a union. The middle ground for compromise on issues impacting restaurants – both big and small – is almost gone. The space to negotiate has become the empty street between two gunslingers. Sadly, many of our small local restaurants are in the crosshairs. In part two of this piece on unions, I will describe in more detail how this showdown will impact our industry as a whole. ■ September 2014 | 9

The impact of your vote and what to expect in 2015 By Bruce Beckett, director of Government Affairs

In November, your vote is more important than ever. You may be thinking political types are always talking about the importance of elections. But here is why it’s important to you and everyone else. The recently concluded primary election in Washington is a prime example of what happens when few people vote. The outcomes become predictable and the voice of the moderate voter is drowned out. Typically during a low turn-out, top-two primary extreme voters have a much higher influence over who the final choices will be for voters in the general election. And incumbents dominate. Unfortunately, around 70 percent of Washington voters chose to not vote in the August 5 primary. It’s ironic that polls routinely show citizens are unhappy with partisan gridlock and have little faith in their political leaders. However, the very outcome of that polling suggests citizens are frustrated with what occurs when citizens don’t vote. Which brings us back to what is at stake in November. For WRA members, November’s elections will lead to one crucial outcome: the control and make-up of the Washington State Legislature for the next two years (201516). Why is that important to you? Legislators must make difficult decisions related to the state’s operating budget and a variety of policies that impact payroll costs (workers’ compensation, unemployment insurance), taxes and fees on both businesses and citizens. The bottom line of any restaurant is impacted by decisions made in Olympia. The Legislature that convenes in 2015 faces another vexing question: On an already limited budget, how does it address the court decision that funding for education must be dramatically increased? The make-up of the 2015-16 Legislature will determine the answer. The positions differ significantly. The reason the Legislature must increase education funding is because the Washington Supreme Court ruled that the 10 | warestaurant.org

Legislature was not meeting its “paramount” duty to fund education adequately. The courts then gave the Legislature until 2018 to address the issue by adding between $6-8 billion of new funding for education. It took the current Legislature three special sessions to adopt the 2014-15 spending plan that only increased education funding by about $1.2 billion. In the end, the increased funds came from pulling money from other state expenses and increased tax collections from growing economic activity. Many lawmakers support new and increased taxes on business to meet the court’s edict. The Senate Majority Coalition Caucus and House Republicans have a different view. They believe this mandate can be fulfilled by prioritizing state spending on vital, necessary services and growing economic activity in the state. For the WRA and the entire business community, the outcome of the November elections will essentially determine what restaurants will face in the near future. Will the Legislature institute a substantial increase in taxes or continue on the path of developing sustainable budgets and promoting economic growth? What will happen if small businesses, who dominate the WRA’s membership, are targeted for increased taxes? The state is likely to engage in arguments regarding paid sick leave mandates, minimum wage and the power of local governments on complicated employer issues. The recent outcomes in SeaTac and Seattle to increase the minimum wage will spark debate at the state level on minimum wage and other employee benefits. Again, the make-up of the Legislature in 2015-16 will determine the scope and breadth of any changes to minimum wage and benefit policies, and whether local governments should be setting unique requirements on these complicated employer issues. However, despite the deep concern over voter apathy in the primary elections, the results align with the WRA’s objectives:

The WRA’s Government Affairs team spent considerable time interviewing more than 70 candidates for the Legislature, and presented a plan to the WRA Government Affairs Committee (GAC) for Political Action Committee involvement in races around the state. We are pleased that the outcome of the election aligns with the plan adopted by the GAC. With one disappointment… Monique Trudnowski, co-owner of the Adriatic Grill in Tacoma and active WRA member, ran for the open seat in the 28th Legislative District. Monique was a stellar candidate; informed, energetic, passionate in her beliefs, a terrific fundraiser and doorbeller. Unfortunately, five candidates were vying for the seat, and only the top two move to the general election. Monique fell about 400 votes shy of making the top-two – perhaps a reflection that one of her opponents had much greater name ID (due to running for office two times in the past) and the low voter turnout. The WRA is grateful for all of Monique’s efforts in this race, and for being a steadfast champion for small businesses and restaurants. So, remember to go to the polls in November – your vote matters to your business. If you would like more information about candidates the WRA endorsed, you can visit www.warestaurant.org or scan the QR code below. What else can you do? You can personally pay attention to campaign messages and contact us if you have any questions about the upcoming elections! We are here for you. And finally, you can meet with the candidates in your district and educate them on what it means to be a small business owner in this state. ■

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current make-up of the Washington State Senate and To educate and elect pro-business candidates in open legislative districts. September 2014 | 11

Restaurants embrace the versatile QR code By Paul Schlienz, managing editor

It seems like QR codes are nearly everywhere. These unique codes, looking something like digital Rorschach tests, are among the most versatile creations of the computer age. Nearly every industry has embraced them in some way. QR (Quick Response) codes were first developed, in Japan, by Denso WAVE, a producer of automatic identification products associated with the Toyota Group of companies, in 1994. The codes were initially used to track vehicles during the manufacturing process. Their fast readability and greater storage capacity than standard Uniform Product Codes (UPC), however, assured they would spread far beyond the auto industry. Among QR codes’ early adoptees was Japan’s Ministry of Foreign Affairs. Beginning in the 1990s and continuing to this day, all foreign visitors to Japan receive a sticker in their passports with an unusual encrypted QR code that serves as proof of their legal entry into the country. From tracking to smartphones The first adoptee of QR codes, in the United States, was United Parcel Service, which put them to use tracking packages. With the advent of smartphones, QR codes spread beyond their original uses of identification, time tracking and document management. Smartphones’ capability to scan QR codes, which can be read horizontally or vertically, proved to be the ideal catalyst for these codes to move into general marketing and much more. “The rise of QR codes has been awhile in the making,” said Keegan Hall, vice president of sales and marketing at Pirq, a Kirkland-based firm that makes point-of-sale systems. “Five 12 | warestaurant.org

and a half years ago, they weren’t around to any extent at all in marketing. Consumers are now learning how to use them with their smartphones.” Creative uses of QR codes are now legion. They have appeared in everything from advertising to tombstones that the graveside visitor can scan in order to learn information about the dearly departed. Even Calvin Klein replaced its notoriously racy underwear advertisements with billboards simply consisting of a QR code. Unlike traditional UPC barcodes, QR codes can actually be presented in aesthetically pleasing ways, incorporating corporate logos into the code. One especially creative example was when the Red Cross organized QR codes into its own logo in an appeal to raise funding for the victims of Japan’s 2011 Tohuku earthquake and tsunami. Creative restaurant marketing Restaurants, too, were quick to take advantage of the new opportunities provided by QR code marketing. Most commonly, restaurants will use the codes in some form of advertising that takes the user to a landing page, to an appropriate mobile app store or to a secure site where monetary transactions can be completed, but restaurants have found many other creative uses for the codes. McDonald’s uses QR codes on its product packaging. The codes provide nutritional information on each menu item, enabling health-conscious customers to wisely choose their meals while also allowing McDonald’s to counter an obsolete junk food image. Starbucks, too, among the big chains, has embraced QR codes in a major way, including music and payment apps. The rise of QR codes is such that, according to Starbucks Chairman and CEO Howard Schultz, 12 percent of all

Starbucks transactions are through QR codes.

bombarded characters as they walked through the mall in Steven Spielberg’s 2002 film Minority Report.

Other restaurants have taken the codes to a whole new level. “If you go to some restaurants, when you receive your check, you’ll notice a QR code at the bottom,” said Tom Halligan, sales manager at MICROS Sytems, Inc., the world’s largest developer of point-of-sale systems. “You can automatically pay through the QR code, and you’ll additionally be prompted to rate the server. If your rating is less than excellent or the tip is lower than a certain percentage, the manager will be alerted to go to your table and see if everything is OK.” Other restaurants, like Spokane’s North Division Street Zip’s Drive-in, are still figuring out how QR codes can work for them. “We started our mobile app six months ago,” said owner Jennifer Faught. “We’re right next to Gonzaga University, so hopefully, it helps us connect with the college age crowd more. It’s still in the works.” The next big thing? With all the creativity and innovation that’s already gone into the great QR code boom, one can only wonder what’s coming next. “One area where we’re really ahead of the curve is in hotels,” said Halligan. “Seventy percent of hotels have started providing QR codes for reservations. The future hotel check-in, which you’re already starting to see at some chains, like Marriott and Hyatt Regency, will involve customers scanning QR codes at payment kiosks that then generate a personal key card for their room. These kiosks are becoming part of the new architecture of hotels.”

Additionally, customers will be able to make payments much as they do today by placing their phone near one of these devices. Whichever direction the technology goes, there is one certainty: Making things easy for the consumer will still be the No. 1 concern. “All of these innovations are designed to enhance customer experience,” said Halligan. “That is what drove the adoption of QR codes, and that is what will continue to push things forward.” And one can equally be sure that restaurants, with their intense customer focus, will be in the forefront of whatever comes next. ■

Hall believes that QR codes and their uses will continue to grow, but will eventually be replaced by other marketing and payment technologies. “Ultimately, I think QR codes will go away, but it’s going to take awhile because their adoption is still very much ongoing,” said Hall. Hall foresees a day when indoor proximity technologies like iBeacons and near field communication (NFC), which can be plugged into the wall by a merchant, will take the place of QR code marketing. Once these technologies are online, customers will receive messages from the merchant on their smartphones as they enter a business, bringing to mind a non-sinister version of the personalized advertisements that September 2014 | 13

Restaurant industry growing, but faces challenging new labor market By Paul Schlienz, managing editor There’s good news and bad news in the restaurant industry. First, the good news. The restaurant industry is growing by leaps and bounds. Nationwide, according to the U.S. Bureau of Labor Statistics, during July 2014, eating and drinking places added a net 18,600 jobs on a seasonallyadjusted basis. This was the 53rd straight monthly increase and 25th consecutive month with gains of a minimum of 10,000 jobs. This impressive employment growth also holds true for Washington’s restaurant industry. While 209,200 people were employed in the state’s foodservices and drinking places category, in June 2013, there were 220,700 people in the same job category one year later – a gain of 11,500 jobs. “What seems to be happening with the economy is sustained gains in employment, and a gradual improvement over the last several years,” said Paul Turek, labor economist with the Washington State Employment Security Department. “There have been fewer layoffs with income growth that’s modest, but it’s still growth. As long as we see greater levels of income, we’ll see more money to spend, more consumer confidence and more willingness of people to travel, which translates to jobs in the leisure and hospitality industry. Things look pretty optimistic. We’ll continuing sustaining what we’ve got.” No more easy labor market There are, however, some big challenges facing restaurants. According to the National Restaurant Association’s 2014 Restaurant Industry Forecast, restaurant employment growth will likely outpace overall employment growth for the 15th straight year. While this may sound good, at first glance, there is a fly in the ointment: A gap where there are more available positions than available candidates is starting to develop. “The easy labor market of the last five or so years is really behind us,” said Michael Harms, executive director of operations for the Dallas-based People Report, which measures trends in the restaurant industry. “For a long time, in that period, you could not worry about having to staff operations because there was such a glut of workers

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available. You had a lot of younger workers looking for parttime work, and a large unemployment rate. Those days are over.” Already, Washington’s restaurateurs are noticing the change in the labor market. “It’s definitely getting tighter,” said Travis Rosenthal, owner of Seattle’s Tango and Rumba restaurants. “It’s a bigger challenge to find good people that are going to stick around. People are jumping from job to job for an extra 50 cents to $1. Complicating matters for Seattle restaurateurs is the incorrect perception among many job seekers that the city’s controversial $15 per hour minimum wage is already in effect. “A lot of people are confused,” said Rosenthal. “They think the $15 per hour minimum wage is in effect right now. The demands have shot up a little bit.” And it’s not just in Seattle or in full service restaurants, like Rosenthal’s, where a tight job market is becoming increasingly apparent. “We have very few applications that come in,” said Jennifer Faught, owner of a Zip’s Drive-in in Spokane. “If we do hire people on, often

“As long as we see greater levels of income, we’ll see more money to spend, more consumer confidence and more willingness of people to travel, which translates to jobs in the leisure and hospitality industry.” Paul Turek, Washington State Employment Security Department

they don’t want to work or they want to work as little as possible. You can make good money in our industry, but you have to be willing to put in the time and you have to put in effort. It’s not going to be just given to you.” Interestingly, there are still some foodservice employers that have not yet experienced the tightening labor market. “We’ve been getting tons of resumes from very qualified people,” said Karissa Bresheare, owner of Mill Creek-based Gourmet Latte, who believes her company might benefit from having stands in multiple locations, thus making them less affected by local conditions in places where the labor market is especially tight, such as the City of Seattle. “Our applicants know restaurants have great opportunities, especially when you take gratuities into account.” Bresheare’s experience notwithstanding, however, the handwriting does appear to be on the wall that employers can no longer count on an easy labor market. In response, restaurateurs are taking proactive steps to hold onto established employees while attracting qualified new workers. “We’ve had to raise our rate of pay for some positions in the kitchen,” said Rosenthal. “If you’re a good employer, you should be able to hold onto good people if you’re paying them right.” Faught is also proactively reaching out to perspective employees through Internet job listings, Facebook and the Gonzaga University website with an appealing package. “I try to reach out for anybody and everybody,” said Faught. “We offer our paid vacation for people who have been here for a year, and two weeks for year. I try to give my employees raises as I need or as I can afford. I also give extra hours here and there.” New hires One thing Faught has noticed is that some of the most eager job applicants she has been encountering recently are teenagers – an age group that was traditionally a prime demographic in the restaurant workforce. Unfortunately, there are severe limitations on her ability to hire them. “Lots of minors are wanting a job, but you can really only hire them for the summer because it’s not as easy to hire them longer-term,” said Faught.

complicated work rules that create such hardship for someone who wants to hire someone under 18,” said WRA Director of Government Affairs Bruce Beckett. “There are enormous work rule complications from having a high school student on your payroll. The trend of dropping youth employment started in 2001. It’s dropped by 60 percent since then, and it’s not recovered.”

As the labor market is tightening up, it is also getting older and delaying retirement. Many employers are thus hiring older workers, including mothers who are returning to the workforce after years of raising children. Another great source for foodservice workers is the National Restaurant Association Education Foundation’s (NRAEF) ProStart. This program for high school students provides young people with the opportunity to learn the art of cooking and the skills it takes to manage a restaurant through training with professional chefs and classroom instruction. Restaurant operators would be hard-pressed to find a better place to look for employees. “We’re creating a generation of experienced, skilled and thoughtful chefs,” said Monica Miller, senior manager program, at the NRAEF. “These kids can get on a path to the workforce and a career a lot quicker than many of their peers. And they come out of post-secondary education with a lot less student loan debt.” However restaurant owners do it, they need to adapt to the new labor environment. It really is a whole new ballgame. “It’s better to be ahead of the curve than behind it,” said Harms. “You’ve really got to be proactive because it’s not going to get easier any time soon.” ■

“It’s a combination of the lack of a training wage and the

September 2014 | 15

Managing your staff while planning for lower guest counts in September By David Faro, contributing editor

It’s the end of summer. School is about to start across the region for many families. While kids return to their classrooms, another phenomenon occurs that is just about as predictable as the yearly drop in temperature. Transaction numbers at the end of August can plummet overnight. If you are not prepared to deal with all of the incumbent variables that follow suit, September and October can be rough months. Many managers struggle mightily through the autumn doldrums. Other managers, however, have a plan already in place that saves them a lot of hassle and brings guests to their restaurants when others sit practically empty. The best plans are diversified. They include solutions that range from specialized seasonal marketing initiatives to calculated staff reorganization strategies. The restaurant year is a dynamic beast that feeds on your clientele’s disposable income. Your ability to consistently attract their dollars is a defining factor of your success, and that can become difficult at this time of year. All sorts of external conditions that are out of your control – the economy, the weather and the time of year – can significantly affect how many people walk through your doors. But even though there is nothing you can do to make the rain go away, there are many things you can do

16 | warestaurant.org

to mitigate the losses, in September, when the beast seemingly hibernates until the holidays. When the calendar slips from a summer dress into a September sweater, many establishments are packed and have been for months. Your staff is tired. They have been working long hours serving big crowds day after day - for weeks. As classes approach, the crowds tend to retreat back into their books and begin spending their dollars on school supplies and new clothes. Your guests need to be incentivized to spend them, instead, at your restaurant. It’s like clockwork every year. Did you plan? If you didn’t, you are likely to have a lot of staff standing around looking for hours that just are not there. Making ends meet can quickly become a front burner concern for you – and for them. On the other hand, if you had a good staffing plan, one that started when you began hiring people before the summer started, the transition can be made measurably easier. Experienced managers have a few key devices they employ to keep transaction numbers elevated when the weather cools. They also have a staff configuration that gives them the flexibility to respond to fluctuations in seasonal guest counts. Here are some suggestions for creating a flexible work force. It all starts with hiring. The first time you sit down with prospective employees, find out immediately what they need in terms of hours and work conditions - before anything else. Often, in an interview, a person who is looking for a job will fudge the details of their lives and desires so they can land the job you are offering. Get past that.

Prospective employees will often say anything to get the job, but soon after being hired, you find out that they really only wanted two shifts, not five. They then become a weak point in your plan. Conversely, some prospective hires, when you tell them that you have a few shifts available, but not full time, sign up anyway so they can get a foot in the door. Often, soon after, they start to bug you about getting more hours, complaining about how it’s unfair that they don’t get closing shifts in the best sections after only two weeks of employment. Your expectations and your employees’ expectations must be aligned as closely as possible to really be able to maximize your ability to approach and manage big variations in guest counts effectively. It’s always hard to know when to pull the trigger on hiring more staff for the summer. Many managers get caught without enough staff as spring turns the corner into warmer days. Managers can be reluctant to hire when the rains are still coming down, but then, on the first sunny day, when their deck becomes immediately packed, they lament the fact that they were holding shifts, and watch in dismay as their servers become overloaded, in the weeds, and customer service starts to suffer. Then, it’s a mad dash to find people who want to work for three months, knowing you will decimate their schedule when September rolls around. It’s a tough equation to manage - but it can be done. A diversified staff means that beyond your dedicated full time “A” players, you also have a few secret weapons. One idea is to hire a person or people with long histories of hospitality work, but only want one or two shifts a week to make ends meet.

These people are worth their weight in gold. Get them on board about a month or two before the season starts so they are comfortable with your operations by the time summer rolls around. During that time, only schedule them for the tiny amount of hours they requested in the interview, but prepare them for the fact that come summer, they are going to be integral to your dynamic staffing plan. Employ one or two people who can pick up shifts, are happy to make some extra summer cash, but will also not mind having their schedules cut at the end of summer. Often these people are former managers or key employees, and they often know what you are up against and are willing to help out – mainly because they have been there before themselves. Prepare them for this, and when you are stuck, this kind of hire will come through for you time and time again. Secondly, hire students looking for a job early, really early, even before they get out of school. Have them in place and ready to go before the warm days even arrive. Often you can have a well prepared group of eager kids who want to make a buck as soon as they launch into summer vacation. Let them know in advance that their first day of employment is going to be variable, that it will depend on weather and demand, and that it will end abruptly on September 1. These kids often return for your busy holiday season to help out as well. Smart students come home at spring break and set up jobs that start in June. Smart managers hire them, and ask for them to be waiting by their phones on the first sunny days of the season. Another bonus with this group is that they are hungry for cash. If demand is high like it was this year for many Washington establishments because of the great weather, you can give them a lot of hours. They often happily take as many or as few as you have to give before thankfully leaving when your numbers

September 2014 | 17

fall off, and they need to return to school. There are all sorts of people looking for hospitality work. A diversified staff means that you have a few of each on your staff, and know exactly when and how to use them to mitigate the financial effects of the usual and expected September drop off. The next steps are to keep your regulars coming through the door, and attract new customers to follow them. PART II – Bringing them through the door – loyalty has its rewards Let’s assume you did have a firm grasp on your staffing needs for the year, and your labor costs reflected careful planning and management over all the seasonal transitions. That still doesn’t change the fact that most restaurants will still see a dramatic decrease in business as September rolls around.

A DIVERSIFIED STAFF MEANS THAT BEYOND YOUR DEDICATED FULL TIME “A” PLAYERS, YOU ALSO HAVE A FEW SECRET WEAPONS.

It also doesn’t change the fact that guest counts are going to remain low until at least Thanksgiving unless you do something to ease the drop in numbers. What can you do to attract more people to your restaurant during this time? There are a number of ways that you can entice new clientele while at the same time rewarding your regulars; gift and loyalty cards are two great vehicles for maintaining and increasing traffic. Some numbers?

Forty-one percent of first time shoppers tried the

generated, dollars spent above gift card value and overall purchase compared to average sales ticket.” As well, a little research goes a long way says Kraus, and she encourages owners to “rely on buyer profiles in order to build personalized marketing campaigns that reach the customers most likely to buy gift cards.” Lastly, Kraus says that gift card marketing strategies should be reflected “in campaigns targeted to the occasions, times of year and life-events most likely to result in sales of gift cards.” To read the rest of this article please use the QR code below.

business because they received a gift card to shop there. Fifty-five percent of your guests will need to shop more than once to use the whole amount on the card. Seventy percent of shoppers will spend more than the value of the gift card. Seventy percent of those shoppers will spend at least 20 percent more than the value of the gift card. Elizabeth Kraus, marketing manager for DB Squared, Inc., says, “Many restaurant and retail marketers point to word of mouth as their best marketing when it comes to new customer referrals. Gift cards should be seen as the ultimate word of mouth referral, since customers are willing to back their recommendation with money from their own wallets!” Kraus cautions that, “Programs should be tied to specific, measurable goals that allow you to track return on investments such as the numbers of new customers 18 | warestaurant.org

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September 2014 | 19

The restaurant industry workforce - young, educated and moving upward By Sheryl Jackson, research editor

Restaurants are Washingtonâ&#x20AC;&#x2122;s No. 1 private employer with over 210,000 in the workforce. 40% under the age of 25 53% female, 47% male FEMALE

PROFILE OF A WASHINGTON RESTAURANT

EMPLOYEE

WORKERS & MANAGEMENT

PROFILE OF A QUICK SERVICE

RESTAURANT WORKER

83,000 STRONG

MALE

60% are single 56% do not have children Almost 50% are college graduates or have had some college education 72% are employed year round (not seasonal) 66% are part of a household where they are not the primary wage earner

Almost 60% are under the age of 25 63% female, 37% male FEMALE

MALE

70% are single 52% do not have children 38% are college graduates or have some college education Almost 60% are employed year round (not seasonal) 78% live in a household where they are not the primary wage earner

PROFILE OF ENTRY-LEVEL FULL SERVICE RESTAURANT WORKER

40,300 STRONG

53% are under the age of 25 43% female, 58% male FEMALE 78% are single 68% do not have children 39% are college graduates or have some college education 64% are employed year round (not seasonal) 66% live in a household where they are not the primary wage earner

The data is from the U.S. Census Bureau, American Community Survey.

20 | warestaurant.org

MALE

Employment trends quick survey By Sheryl Jackson, research editor

Tell us about your employment trends by answering the three quick questions below in our monthly survey. Results for our monthly quick questions on the industry will be in a future edition of the magazine. 1. In July 2014, did the total number of employees in your operation increase, decrease or stay about the same, compared to July 2013? 2. In July 2014, did the average number of hours worked by employees in your operation increase, decrease or stay about the same, compared to July 2013? 3. In the next six months, do you expect the total number of employees in your operation to be higher, lower, or about the same as it was during that same period in the previous year?

SCAN TO TAKE THE SURVEY!

Use your favorite QR code reader on your smartphone.

OR GO TO: HTTPS://WWW.SURVEYMONKEY.COM/S/XTL568W

We are extending August’s survey for one more month.

Last month’s questions ask about your summer menu, current and past. QUESTION

What new dish or drink from previous years far exceeded expectations?

QUESTION

What one new dish or drink do you have on your menu this summer?

QUESTION

What new dish or drink from previous years bombed?

OR GO TO: HTTPS://WWW.SURVEYMONKEY.COM/S/9W8WW83

SCAN TO TAKE THE SURVEY USING YOUR SMARTPHONE! September 2014 | 21

This is our Member Spotlight section. Are you a member with a story you want told or a celebration to be shared? Email us at stephanied@warestaurant.org.

MEMBER SPOTLIGHT

WRA members and Seattle’s Union Gospel Mission By Stephanie Davenport, contributing editor

Restaurants are vital to our local communities. They support sports teams, host fundraisers and so much more. In Seattle, one way that restaurants help the community is through work with the Union Gospel Mission. The mission’s Chef Norm Hummel speaks eloquently about why a restaurant’s involvement is so vital. “Everyone understands that food is vital to live and that our bodies need nutrients to repair itself; to produce energy and fight or resist sickness,” said Hummel. “Without food, there is no survival. But what restaurants understand better than most people, is that food doesn’t just satisfy hunger pains, it’s more than that. Food is part of our culture and offers human interaction or experience that often results in smiles, laughter and comfort.” Every day, the mission serves 2,200 meals to men, women and children throughout King County that have been stricken by poverty. Restaurants who partner with the mission, like El Gaucho and Azteca, understand that food isn’t just about satisfying hunger, but also is part of the human experience. When contributing to the mission, restaurants offer meals normally served to patrons. By providing quality food, a restaurant provides pride and hope for those that don’t often get kindness and respect – people who often wonder where they’ll find their next meal. Randy Thurman of Azteca Restaurants said, “Our restaurant family came from humble roots, and they have never

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forgotten or changed the way they feel about helping people now that the business is flourishing. The Ramos family cares about enriching lives; it’s really the ‘brand’ of our restaurants. Helping people up and giving back is a critical part of Azteca’s success. Nowhere better can that be experienced than while participating with the mission.” Local restaurants offer, provide and serve food from their menu through the Bring a Meal (BAM) program. In 2013, El Gaucho won a national award for its commitment to Seattle’s Union Gospel Mission. Twice a month, a team of volunteers from El Gaucho prepares, transports and serves lunch to people at the mission. The restaurant has served more than 10,000 meals so far! BAM is an opportunity for local restaurants to be a bigger part of their community, stay connected to what’s happening to those in need in their area and for businesses to build their team by serving in the environment together. If you would like to participate contact Katelyn Scott at kscott@ugm.org. Or consider attending Catalyst, the Mission’s annual gala on October 2, 6 p.m., at Fremont Studios. You can register for Catalyst here: www.UGM.org/ Catalyst. ■

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Hire teens? By Lyle Hildahl, WRA Education Foundation director

People are reluctant to hire teens. The reasons are many; child labor laws, many teens are thought to be all about “me,” body jewelry, lack of respect, lack of preparation, lack of awareness, laziness – the list goes on. So why hire teens? I don’t think we should hire just any teen, just like we don’t hire just any adult. It is wise, however, to hire certain teens. What knowledge and experience should a good candidate have to join your team? When I had a restaurant, I looked for the following things:

Preparedness. Did the

candidate do research on my restaurant? Readiness. Did the candidate have a current food worker card and or ServSafe manager certification? Professionalism. Shows up early, clean, well dressed, exudes good energy, smiles. Did the candidate have a purpose or goal? Basic skills. Did the candidate understand the importance of customer service, have knife skills, know back and front of the house terminology? Experience. Had the candidate worked in teams and articulate what lessons were learned on the job? Teachable. Was the candidate’s mind open to learning? How do we find candidates with this knowledge and experience? Hire a ProStart student with a COA. The ProStart National Certificate of Achievement (COA) is an industry-recognized certificate that signifies a strong

24 | warestaurant.org

foundation in the basic management and culinary skills considered critical to success by industry leaders. This means you are assured that a credentialed ProStart graduate is cross trained in all aspects of a restaurants operations and is ready to hit the ground running. A student who has earned the COA has demonstrated a commitment to and knowledge of the industry. This reduces turnover and training costs. To earn the ProStart National COA, a student must pass two comprehensive yearly exams and complete 400 hours of mentored work experience. A major thrust for the Washington Restaurant Education Foundation, this year, is to promote and educate the industry and public on the value of a COA. I will be speaking to area chambers of commerce, workforce training agencies and hotel and lodging groups. Many COA graduates go on to college with advanced standing through articulation agreements with their colleges. These partnerships are of great importance, and I will be developing more of them. If you know a COA graduate, you know what I’m talking about. It’s in your best interest to hire these well trained, highly skilled workers. I hope to see some of you this coming legislative session, as we launch a campaign to recognize this very essential workforce training program. We hope to draft a bill that recognizes ProStart as a viable component of the hospitality training career ladder that serves a very diverse population. ProStart is a program that teaches applied math, leadership and entrepreneurship – all skills needed for the workforce of the future. Help us grow this program across our state. ■

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INDUSTRY CALENDAR September/October 2014 Training Sept. 23

ServSafe® Manager, Fife

Oct. 7

ServSafe® Manager, Seattle

Oct. 14

ServSafe® Manager, Kent

Oct. 20

ServSafe® Manager, Everett

Oct. 23

ServSafe® Manager, Olympia

Meetings Sept. 16

Finance Committee Meeting

Sept. 16

Board Development Committee

Sept. 16

MSC Board Meeting - Webinar

Oct. 7

GAC Regional Meeting, Tacoma

Oct. 7

H.I.H.I.T. Board Meeting

Oct. 7

Executive Committee Meeting

Oct. 8

Seattle Restaurant Alliance Chapter Meeting (Restaurants only)

Oct. 8

MSC Subcommittee Meeting

Oct. 9

GAC Regional Meeting, Mount Vernon

Oct. 14

Spokane Chapter GAC Regional Meeting

Oct. 16

GAC Regional Meeting, East King Co.

Oct. 21

Finance Committee Meeting

Oct. 28

WRA Fall Board of Director’s Meeting

Oct. 29

WRAEF Fall Board Meeting

Events Sept.. 17

Hospitality Breakfast Forum

NEW ALLIED MEMBERS Brown & Brown of Washington, Inc. Patrick McHugh 1501 4th Avenue Seattle, WA 98101-3631 206.956.1600 pmchugh@bnbseattle.com www.bnbseattle.com We are a full service insurance brokerage that works with a number of clients in the hospitality industry. Central Payment Barry Harter 18071 McCorquedale Road Mount Vernon, WA 98273-7292 360.333.0636 barryharter@comcast.net www.cpay.com Central Payment provides the latest technology in transaction processing and services. Credit card processing featuring lifetime low price guarantee. Point of sale systems and social media loyalty. The absolute lowest processing fees in the USA. Best point of sale for food and beverage. Communication Solutions Resources Sean Cook 9927 NE 144th Lane Ste 808 Kirkland, WA 98034-3917 425.242.0272 sean@communicationsr.com www.communicationsr.com Consulting firm whose primary focus is identifying and capturing expense reduction and savings on telecommunication voice, satellite TV, internet security, electricity, gas, water and sewer, solid waste disposal, merchant card services, printing, uniforms and linens, freight shipping cost and worker’s compensation expenses for clients with current providers and no compromise in services. FiveStars Jannine Houston 321 11th St San Francisco, CA 94103 425.315.5699 jannine.houston@fivestars.com www.fivestarscard.com/ FiveStars’ mission is to help businesses and communities thrive by turning every transaction into a relationship. Using FiveStars technology, millions of people get rewarded at businesses they love. One month free for WRA members.

26 | warestaurant.org

Leschi Consultants, LLC Larry Faust 157 Power Avenue Seattle, WA 98122-6545 206.322.5312 www.leschiconsultants.com We provide IT services with a specialization in technologies with critical importance to restaurants: wide area networks, supporting POS networks; credit card data security and wireless technologies. A reliable network, good organization of data, and great responsive support for users are key elements for competitiveness in today’s connected world. VIVO Team Consulting Renée Safrata 2312 Mathers Avenue West Vancouver, B.C. V7V 2H6 778.280.3868 renee@vivoteam.com www.vivoteamplatform.com We’ve created a web platform that analyzes team productivity, identifies critical areas, and provides targeted, team-training solutions for performance improvement - all based on the six key indicators for highly functioning teams. http://www.vivoteam.com/wrapartner-page/

NEW RESTAURANTS Arista Catering, Seattle Birch Bay Restaurant & Lounge, Birch Bay Bon Vino’s Bistro & Bakery, Sunnyside Boulevard Tavern, Olympia Dad’s Family Restaurant, Toppenish El Agave Restaurant, Bellingham El Mirador II Restaurant, Yakima Golden Wheel, Yakima Hub, The, Gig Harbor Johnny Carino’s of Skagit Valley, Burlington Lucky Eagle Casino, Rochester Lupe’s Hot Tamales, Centralia Masonry, The, Seattle Mexico Magico, Tacoma Penny’s on the Boulevard, Lakewood Rain City Catering, Renton Round Table Pizza,Spanaway Sisters Restaurant, Shelton Skillet Street Food Inc., Seattle Smoking Monkey Pizza, Renton Smoking Mo’s, Shelton Start Fresh Market, Burien Stoneburner, Seattle Tony’s Sports Bar, Kirkland

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Customers go to a restaurant for food, but they will return if offered great service. On an average year a restaurant will experience a 10-30% loss in customer retention. 80% of those customers leave a restaurant never to return based on a single occurrence of poor customer service. Our mystery shopping services allow you to train your staff to provide “consistency of service.” We can provide you and your staff a customized program that will help you to succeed to the next level. We are an Accredited Member of the BBB and WRA. 509-327-7373 * info@selectinfoservices.com www.selectinfoservices.com LED LIGHTING DISCOUNTS

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WRA has its

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The Washington Restaurant Association has an exciting way for members to reach potential customers! Join us on our radio show, DineNW, where we talk about Washington’s restaurant industry, and give listeners a taste of Northwest cuisine.

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28 | warestaurant.org

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8/26/2014 6:32:53 PM

Ask the Expert | Restaurant Profit Coach

Keep labor dollars from slipping through your fingers By Rick Braa, CHAE

My total labor percentage including taxes runs between 36-40 percent each period. I understand this is normal, but I can’t afford it any longer. What are some ideas to help bring that number down?

Managing labor in non-tip credit states is one of the most important management tasks. In Washington state, where the minimum wage is headed toward $10 per hour soon, every minute counts. To put it in perspective, $10 per hour is $1 every six minutes. With several people on staff, that rate of spend adds up rapidly. To ensure you get what you’re paying for, use these methods to reduce cost: Start with the right numbers. Total labor including taxes needs to be closer to 30 percent than 40 percent. The lower your cost of goods, the more flexible this number can be; generally, 30 percent all in is a good number. To hit 30 percent, hourly labor needs to be around 20 percent, and management around 5 percent as taxes and benefits will range between 15-20 percent of wages. The higher the management percentage, the lower the hourly percentage and vice versa. Before the next period begins, cost out what the business needs without employee names attached. Total the number of hours and multiply the average hourly rate for both front and back hourly employees, add management wages, then divide the sum by projected sales. If the starting point is above 25 percent, go back to scheduling around the business to drive the maximum sales during busy times by having appropriate sales producing staff and minimizing labor in the slow times. Tighten up hours of the day that are low revenue and high labor. Use scheduling software effectively. In this era, where the average restaurant is spending more than $350,000 per year per million in sales on labor, the investment of $2,000 or less per year for scheduling software is a bargain. Often, the use of scheduling software will reduce cost by 3-5 percent of sales, as it will provide the scheduled labor dollars and percentages prior to starting the period to ensure targeted labor percentages can be accomplished. Labor dollar seepage starts with early clock-ins and late clock-outs. It’s simple. If the spend is $1 for six minutes of time, 10 people clocking in six minutes early and clocking out six minutes late will cost $20 per day. That’s more than $7,200 per year. Scheduling software can provide reports showing who is

30 | warestaurant.org

clocking in and out early or late and how often. Besides tracking time in and time out exceptions, scheduling software will also pull sales data daily and match it up to the scheduled amount showing exceptions. For example, if a schedule was written for $4,000 in sales and $800 in labor, and actual was $3,000 in sales and $850 in labor, you know there were issues with phasing the crew. 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. Matching busy times with the most productive, fastest people produces the best set of results. Match sales by 15 minutes to the actual employees working every 15 minutes. See exhibit 1. Exhibit 1 Red = Labor Hours Blue = Sales

In the example chart with sales in blue are charted on one axis, labor hours in red on another, it’s clear when there is a sales spike, there is a labor reduction. It’s also clear that the staff is starting too early. Much of this type of behavior is due to prep. Prep hours need to move closer to the sales spikes, and those individuals need to jump on the line and help when the rush hits. To keep labor dollars from slipping through your fingers, start with the right numbers, use a labor scheduling tool and manage the schedule to speed of performance. Do this and you’ll see those labor numbers come into line. ■ For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.

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