The labour misconception by Alastair Scott
Our CEO, Alastair, highlights the tough period ahead for the hospitality industry. He reflects on “Worrying times”, an article written by Ann Elliott, chief executive of Elliotts, a leading integrated marketing agency in the hospitality and leisure sector.
Ann Elliott’s recent article in Propel’s Friday Opinion series was a timely reminder that this will be a tough period for the hospitality industry. Recent analysis suggests consumers spent too much during the summer and are now cutting back. This, combined with a mass of cost pressures, will force all of us to work even harder just to stand still – but we have been there before.
Staff costs are, as always, one of those areas we all look at and, like Ann, become nervous that cutting staff costs will make the guest experience worse.
This can be true if carried out in a blunt and imprecise way. However, all our analysis shows the worst guest experience occurs not when we are understaffed but when we are overstaffed. Of course we fail to deliver the quality of experience and speed when we are understaffed and we need to increase the level of team when we are busy, but we also have significant challenges when we are overstaffed. Let me give you two examples.
I was recently in one of my own pubs and there were three staff on. A guest came to the bar wanting a drink but one staff member was too busy tidying up to notice the guest or assumed someone else would do it. Another team member was delivering food to a table, while the third team member was at the back of the pub having a cigarette with one of the kitchen staff “because it was quiet”! If we had only had two team members on we would have done a better job all round and not wasted money.
Recently I was in another pub when a lot of people arrived at the bar but the two bar team members were too heavily engaged in a conversation in glass wash to notice or stop for the customers.
Of course training helps but there is an old adage: “If you want a job done, give it to a busy person.”
Labour management, like every other part of the business, requires insightful and precise management, and managing through historic percentages no longer cuts the mustard. In labour I argue we can genuinely have our cake and eat it by saving costs and improving service, normally with the removal of the wasted spend easily outweighing the reinvestment to grow sales and improve service.
It will be tough in the next six months for those who chose the wrong site, the wrong rent or spent too much on the site but for those who are simply spending more than they need to on day-to-day costs, there is a lot we can do.
Alastair Scott is founder and chief executive of Catton hospitality. He is also a director of three leased pubs.
Food sales drive rise in September sales for S4 Labour customers
Like-for-like sales in September were up by 0.5% compared with 2017 levels, according to a study of over 100 hospitality organisations that use S4Labour scheduling and HR software. Food sales were the driving force behind this rise as these operators saw an average 3.5% increase across their sites. Wet-led businesses typically faced a leaner start to autumn with an average 2.7% fall in drink sales, partially mitigated from a 1.7% rise in their food revenues. Meanwhile, food-focused businesses enjoyed a 3.7% growth in drink sales. This follows a strong summer of revenues for operators, who will be hopeful it continues into the autumn in the lead up to the busy Christmas period.
Top Tips for Efficient Sunday Lunch Service
At this time of year, people are seeking comforting food in a cosy atmosphere. Autumn brings about a high demand for Sunday lunches and this can be critical to overall profitability. Here’s our top tips for an efficient Sunday lunch service.
Staffing up the curve
We often speak to operators who take too flat an approach to shift planning, not varying start and end times to match patterns of sales. If everyone starts at noon but sales don’t peak until 2pm, this adds up to wasted labour costs and staff left standing around. We suggest gradually increasing people’s start times from open to peak, adding an extra person every 30 mins. Staggering shifts to match the rise in sales will be much more cost effective.
When to run out
Preparing for too few or too many covers can really damage the bottom line. It is vital to analyse past sales trends and forecast properly, including looking at likely weather conditions. This will enable you to calculate the optimum level of sales for profits and labour efficiency. Running out is no bad thing (unless it’s super early), as it creates demand for people to come back next time.
Slack & Stress
Sunday lunch is a flagship service and in our pubs accounts for around 40% of weekly sales, so getting the right level of staffing is more important than ever. Sunday lunch is the most reviewed occasion on Tripadvisor in the UK, so the potential impact on reputation is huge. Overstaffing can have negative connotations as it creates the image of a lazy, inattentive service if there are staff lingering round. On the flip side, understaffing can also damage reputation as it leads to a rushed, impersonal service as well as harming sales. Forecasting and scheduling staff properly can help reduce these issues.
Especially on Sundays, there is a need for staff to be properly briefed to ensure shifts are as productive as possible. We recommend that management should spend some time with each member of staff, making sure they know exactly what they should be doing, when, and where. A good idea is to allocate staff with primary and secondary responsibilities. Someone’s main role may be to take orders, but if there are no new orders to take, their next priority could be to help on the bar. Not only does this help build a better relationship with staff, it also improves reputation through enhanced service.
Too often we see managers who avoid scheduling themselves to work the busiest shifts. Area managers should nip this in the bud and make sure enough senior staff are working the busiest services. Each venue should spend time scoping out what a management shift looks like on a Sunday. Are they serving customers or more focused on leading and supporting teams? Effective management presence does wonders for overall staff motivation, service levels, and therefore profits.
Through intelligent analysis of past trends and better forecasting, S4Labour helps you maximise sales and improve service at the busiest times, all while keeping labour costs tightly controlled.