The True Cost of Lack of Visibility and Poor Employee Management

The True Cost of Lack of Visibility and Poor Employee Management

Employee turnover in the hospitality industry is a problem. It’s higher than most other sectors, and we are behind the curve on giving a proper focus to engagement and retention — as well as not recognising the benefits it brings. This isn’t overly controversial, but for some it has become an inevitable feature of hospitality. However, others in the industry are getting on the front foot and reaping the benefits of better people management, leading to significant reductions in staff turnover. S4labour have taken a look at what the real costs of high staff turnover are, as well as uncovering some of the real causes (and solutions) to the problem. 

The Cost

Accepted wisdom in the industry puts the figure of replacing an employee in the region of £1,000. However, data from the Society Of Human Resource Management puts the figure at 16% of annual pay. Taking an average across the range of hospitality roles, this puts the figure way over the £1,000 per employee mark, and closer to £3,500 a go. 

Data from YouGov.com reveals that 1 in 3 employees in hospitality will leave their job over a year, but for many roles replacements will need to be found 2 or 3 times over the course of a year — leading to turnover rates in many hospitality businesses of 70% or higher. That would mean to maintain a team of 50 people, the cost to the business is at best £30,000 but possibly as high as £122,500 per year. Of course, costs vary depending on the position and pay rate, but there is a substantial reward for bringing staff turnover down.

Why Does It Cost So Much?

The reasons for the big cost to replace someone are multiple, complex and when added together… they start to mount up. Firstly there are soft costs, including recruitment; admin; and interviewing which will contribute to lost time. With lost time, there are lost opportunities — time spent on admin is often time lost. Therefore limiting sales and training that would drive productivity for the rest of the team. In good times, there are plenty of suitable interview candidates. However currently there is an acute lack of labour, so the chances of interviews going poorly, probations not working out, and the inability to find the right fit for quite some time, are all quite high. Once you have a replacement, the costs continue to stack up. Onboarding H.R. and payroll setups only add to the administrative burden. Training not only takes up a manager’s time but the new team members’ time too. There is a steep learning curve in hospitality, and those who have not experienced the front line before will take time until they become sufficiently productive — especially when compared to the person whom they may have replaced. 

What Is the Solution?

These are issues felt by the entire hospitality industry, and whilst they may be unavoidable there are ways to significantly mitigate the severity of the problem. Those who are giving this a real focus are using data trends to identify, and manage, areas of the business that are driving staff turnover. Ultimately, they are doing something about it.

Where can you start? Every shift is different. It goes without saying that every business is different; there is no one answer on how to reduce staff turnover. Some of these issues will require you to survey your team, giving them a voice to tell you what their stresses (or even the things they love about work) are. However, there is also a hidden treasure trove of insights within your people data — potentially transforming your ability to retain talent. 

At S4labour, we have some amazing forward-thinking operators who have been helping guide the future of our H.R. offering. When we have been speaking to HRD’s about the issues they are facing, the solutions often come back to improving visibility of the workforce. After all, if you can’t see what’s gone wrong, how can it be rectified? Gaining visibility is key in identifying weak points in your staff retention, or pressure points within management that helps prioritise management time, training and focus areas. 

For example: do you know which sites, or which managers, are having the best outcomes? How many people leave your business for a different sector or are they moving to competitors? If so, why? If you don’t know this, you can’t do anything about it.  Some of the main causes for people leaving the business include: not being recognised for their service; being overworked; not being paid correctly; or poor relationships with management.

Being able to see if, when and where WTD breaches are happening will help identify stresses in the business that typically lead to high turnover. Recognising work anniversaries or birthdays has a big boost on morale and generates higher levels of staff engagement. Trends in lateness, or sickness, can be early indicators of dissatisfaction at work (either those arriving late or by those observing tardy behaviour). Having the data to show either improving or worsening trends is critical in how you focus resources in doing something about it. Supporting better management and having appropriate discussions with teams is a lot cheaper than continually supporting a revolving door workforce. 

If you would like to know more about data giving you the right insights to reduce your staff turnover, please book a demo below:

Book a Demo

Customer Satisfaction—Getting It Right

Customer Satisfaction—Getting It Right

Contact number: 01295 267400

Ever since S4labour started in 2010, our customer service has always been so important to us. It has been a key focus of ours for years. S4labour are still determined to produce fast, effective and concise customer service. We come from hospitality—numerous people in our team have been or even are currently operators. Customer service is part of our DNA.

Whether you’re raising a ticket with our helpdesk, making a quick call or calling an Account Manager, S4labour aims to always leave you feeling like you’ve done what you wanted to do. Nothing less. From our First Line Support all the way to our Development Team, everyone at S4labour wants to prove that we simply get our customers. 

Okay, so it’s all well and good talking about some buzzwords describing customer service: be that “exceptional”, “unmatched”, or “perfect”—anyone can say that. On that note, let us tell you how we go about giving you appropriate and effective customer service.

Easy.

Finding our number is simple. Once you’re logged into S4labour, our contact information is easy-to-find, locate and of course… use. The best part is you get to decide which method of contact you prefer. It’s as easy as raising a ticket or picking up the phone. In fact, here’s the number and email right here: 01295 267400 or email.

Constant Support. 365 Days a Year.

Someone from S4labour will always be on hand to help you. If you dial our number or raise a ticket, you can have peace of mind that it will be answered. From 08:30am to 05:30pm, every day (including weekends), one of our team will be on hand. 

Friendly, Honest, and Transparent.

Okay, apologies for the buzzwords on this one… but we really couldn’t help it because they’re true. Our team are completely solution orientated; we don’t stick to the same old scripts you may be used to. Actually, to be clear, S4labour doesn’t even have scripts. We genuinely pride ourselves on being that friendly voice behind the phone; being that response which really does help solve your query. On the transparency side of things, we’ll let you know exactly what the issue is in as much detail as possible. If we can’t answer your query there and then, we’ll put your query with the right experts to resolve the issue.

The Dreaded Phone Tree.

You can’t dread something we don’t have. S4labour does not operate a phone tree; we promise we hate them as much as you do. Instead, we have this revolutionary, innovative and groundbreaking system… someone being at the end of the phone. Your call and query will always be met with devotion and solutions. 

We Don’t Just Know Customer Service, We Know the System. 

The team at S4labour are all trained to a high standard on how to use what we promote: the S4labour system. Not just what it does, but why it does it. Have you ever called a company for help and realised they don’t really know what they’re talking about? That won’t happen with S4labour, all of our employees aren’t just trained to help, they’re empowered to help. 

A Support Call Is a Support Call!

Our aim of a support call is not to upsell you something. No sales pitches, we promise; it wastes your time. Our focus is giving you the support you require.

Walking The Walk.

We’ve said a lot, we know. However, what good is it to talk about facts and promises if you can’t even back them up? That’s why we’ve built a Customer Satisfaction Dashboard; letting our customers do the talking. View it here.

Malvern Inns—Current Challenges

Malvern Inns—Current Challenges

I think we had all hoped that life would return to normal post-pandemic, but it certainly feels like the repercussions of the Coronavirus are set to last far longer than the virus itself. Lockdown gave us the head space to plan and give real thought to how we can improve our people, training and innovate our business. We were optimistic about our place in the wider economic recovery and the feel-good bounce back of the nation. But all of this has now been completely overtaken by a cocktail of challenges that have entered every area of the business. I don’t know whether the lack of staff, and in particular kitchen team, are the biggest challenge. Or, whether the constant failure of the supply chain is now taking more management time. The result of all the challenges is that, as a management team, firefighting has taken over and we are not spending enough time on innovation and growth. Before we know it, VAT and rates will be back to normal and we will have a cost base that has grown to a point where we are not making enough money. This article is a reminder of what we are now trying to focus on in order to drive our business for the long term. How quickly we will get round to them is a different question!

Recruitment and Training:

At the moment, our key priority is recruitment and training. Without the right team our senior team will be in the weeds. Currently we can’t meet the demand on most days—particularly on Sunday. So, being able to recruit and train to meet Sunday demand is a priority. It does seem to be getting better. The end of Furlough has triggered some people to look for work, but more importantly for us has been young people (students or school leavers) who are now wanting to get back into the workplace. This is building up our team one person at a time. Even yesterday one of my managers said 1/3 of the candidates turned up for an interview, which is a higher number than normal. Our real challenge, though, is how we up our game in the long term on recruitment. My guess is that how we have recruited historically will not be good enough for the future, and we will need to connect better with young people and be more persuasive about the personal benefits of some time spent in hospitality.

Pay:

Pay is a real conundrum at the moment. I think we are all worried about ratcheting up pay in the short term and then being unable to claw it back, but equally wanting to find the right level for the long term. I am really puzzled by the challenge we seem to face in tips. I don’t think that our staff actually understand what they earn when they add base pay and tips together, and that we have lost staff who think that they are being paid more in other jobs when the opposite is true. We are seriously thinking about whether we can morph our service charge into price and remove tips from the equation, but it is another big step that may then prove to be wrong. Pay matters and we need to help people understand the pay they already receive before piling more on the top.

Pricing:

As our costs go up, whether it be staff; electricity; VAT; rates; food; drink; or all of the above, we need to decide how much to put our prices up and when to do it. My straw poll suggests that most people are considering a 5-10% price rise currently, but we want to do it in a way that ensures we lose the least volume we can. So, a lot of thought needs to go in to when we do it and which lines we do it on. We also need to spend more time than we have looking for more meat light dishes, which will both reduce cost and fulfil the market move to a lower level of meat in our diet. But of all the 8 blokes I had dinner with yesterday, only 1 chose a meat light dish… chicken pizza!

Productivity:

The government seems to have made it very clear that they are not going to let in heaps of Europeans to help us out of our staffing challenge, so we are all going to have to find customer friendly ways of driving productivity. We have not yet gone down the self-ordering app or self-payment app road, but we will have to look at all the IT led productivity solutions and pick the right solution for our customers in time. We also need to address some of the basics that have slipped a bit, such as how well we deploy staff and how we are managing them to be as productive as possible on shift. This is the challenge of the firefighting regime.

The Planet:

We have just signed up to the Peach led Net Zero regime. I don’t yet know what it entails but recognise that we need to do the right things in the right way, and I know our customers will be supportive. I also think we can make some more steps in packaging waste and our use of plastics, but this will become more and more something we need to work with our local suppliers to solve.

Final Remarks:

Overall, our sales have held up pretty well over the last few months. In truth we have had the demand there—if only we could fulfil it. However, the looming cost moves means that we need to address our core profitability even more urgently, as we know the time from now until April will come quickly. Hopefully we will be fully staffed by then and have made enough moves on the four P’s: pay, price, productivity and planet to make sure we have maintained our underlying profitability.

CJRS – News Flash

CJRS – News Flash

Are you prepared for the end of the CJRS?

As the CJRS closes on 30‌‌ ‌September, you will be thinking about the next steps for your employees and your business.

In order to help you prepare we thought we would share HMRC’s FAQ publication with some useful advice and guidance.

If you have any questions or require further support, contact one of our Payroll team who will be happy to support you.

What should you do when the scheme closes?

You will need to:

  • Bring your employees back to work on your agreed terms and conditions
  • Agree on any changes to your terms and conditions with them
  • Consider ending their employment.

When making decisions about how and when to end furlough arrangements, equality and discrimination laws will apply in the usual way. For more information search ‘Job Retention Scheme’ on GOV‌‌.UK.

Can you claim CJRS for employees on notice periods?

Employers cannot claim CJRS grants for any days an employee is serving a contractual or statutory notice period, including notice of retirement, resignation or redundancy.

What support is available for my employees if I’m unable to bring them back to work?

There’s UK Government support available for your employees through the JobHelp website, offering a range of support, training and advice, to help people find their next opportunity. This includes the Kickstart scheme and other Plan for Jobs support measures, along with advice on learning new skills and finding who’s recruiting. Search GOV‌.UK for ‘Plan for Jobs programmes’ for more information.

What support is available to help my business grow after the CJRS has closed?

If you are looking to grow your business, the UK Government Help to Grow scheme offers management and digital programmes, to help you learn new skills and reach more customers. To register your interest, search GOV‌‌.UK for ‘Help to Grow’.

If employers are considering taking on new employees, there’s a range of UK Government support available to help them, including placements, apprenticeships and training opportunities. Search ‘Plan for Jobs programmes for employers’ on GOV‌‌.UK to find out how your client’s business could benefit.

What if I claimed too much in error?

If you have claimed too much CJRS grant and you have not already repaid the overclaimed amount, you can repay as part of your next online claim. If you claimed too much but do not plan to submit further claims, you can make a repayment online through HMRCs card payment service.

You must tell HMRC and repay the money by the latest of whichever date below applies:

  • 90 days from receiving the CJRS money you are not entitled to
  • 90 days from the point circumstances changed so that you are no longer entitled to keep the CJRS grant.

If you don’t do this, you may have to pay interest and a penalty as well as repaying the excess CJRS grant.

What if I haven’t claimed enough?

If you made a mistake in your claim that means you received too little money, you’ll need to amend your claim within 28‌‌ ‌calendar days after the month the claim relates to – unless this falls on a weekend or bank holiday, where the deadline is the next weekday.

 

 

Extended Furlough

Extended Furlough

 

In Propel’s Friday’s Opinion I published our guidance on the Job Support Scheme (JSS) that was due to start on the 1st November but mentioned that the government website would publish further details before the end of October, assuming this might be refining some of the smaller details.  Unfortunately we got our Halloween nightmare – a second lockdown.

 

For our teams there is a lifeline in the extension of the Furlough scheme, with some slight changes. Our development team are now working round the clock to reverse the work we had put in place to cater for the JSS and revert to Furlough. We will be releasing an update to the software on Tuesday to reflect this.

 

So what do you need to know?

 

The scheme will operate for the month of November, after which the JSS will come into play (although don’t discount another change in plans). The Scheme will pay 80% of an employee’s wages up to a cap of £2500. The employer will foot the bill for NI, pension, holiday accruals and, if they would like to and are able to, topping up their staff’s wages. These are the same calculations that were applied in August.

 

The flexible approach is also continued, meaning that if an employee works then the employer pays for those hours and the scheme will cover the remaining hours up to their usual hours.

 

Eligibility has been extended to cover all employees that were on an RTI submission on or before the 30th October.

 

It is, therefore, assumed that for employees who joined your company and were not eligible for the original scheme will now be eligible, which will be a great relief to those concerned.

 

I am sure there will be further updates over the next week as the details are ironed out and we will keep you posted on these.

The Job Support Scheme – How Does It Work

The Job Support Scheme – How Does It Work

This Saturday is Halloween and, while prior years have seen the importance of this event increase for our sector, this year will be a markedly different… but I feel like I have been saying that a lot recently. The bigger scare might have come from the end of the Furlough scheme but luckily it is being replaced by the (newly enhanced) Job Support Scheme, the next phase of government support for employees. So how does it work?

 

Open & Closed

 The scheme is split into two elements; the open version that is designed for businesses with reduced trade and the closed version that is aimed at business that are forced to closed due to government restrictions.

 

Employer Eligibility

There are various criteria set out that define eligibility for each scheme. Both schemes require the company to have enrolled for PAYE online and to have a UK bank account.

 

For the closed scheme eligibility is defined as follows:

Businesses that are forced to close due to coronavirus restrictions set by one or more of the four UK governments. For the closed scheme, claims can only be made for the time where the forced closure was in place.

 

For the open scheme it depends on the size of the business. If you are under 250 employees you are eligible. If you are over 250 employees you need to go through a financial impact test. Details of the test are available on the gov.uk website but can broadly be summarised as – if July-Sept revenue in 2020 was lower than the same period in 2019 you are eligible (there are nuances though so do check). This does also imply that if you have more that 250 employees and were not trading in 2019 (i.e. a newly formed business) you would not be eligible, although we have not had this confirmed.

 

Employers can claim for both schemes at the same time, as they may have multiple sites affected in different ways.

 

Employee Eligibility 

Employees are eligible if they were on an RTI submission to HMRC prior to the 23rd September. Employees are no longer eligible if they are serving notice or have been made redundant.

 

To claim on the closed scheme the employee should not be working for the period of time they are claiming for.

 

To claim on the open scheme the employee needs to work at least 20% of their usual hours.

 

Employees cannot, therefore, be on both schemes on the same day.

 

Any employee placed on either scheme needs to have the agreement confirmed to them in writing and this agreement needs to last a minimum of 7days.

 

Claim amounts 

For the closed scheme the employee should receive 66.6% of their usual pay, capped at a maximum of £2083.33 per month. All of this can be claimed back from the government.

 

For the open scheme the government will pay 62.5% of the difference between their usual hours and their actual hours up to a maximum of £1541.75 per month. The employer is required to pay 5% of the difference up to a maximum of £125.

 

For either scheme the employer can choose to top up the employee if they so wish. The employer is also liable for NI, pension and holiday accrual.

 

Usual Pay and Usual Hours 

This is more complicated than it was for furlough although broadly calculated on the same principles.

 

For Salary it is the higher of their March 2020 or Sept 2020 salary and hours.

 

For variable pay staff it is the higher of:

 

  • Tax year 2019/20 average pay/hours
  • Comparable calendar period from last year pay/hours
  • Average pay/hours worked from the 1st Feb 2020 to the 23rd Sept (or from when the employee started if later)
  • This should include any hours paid as annual or statutory leave.

 

Holiday 

Exact guidance has not been given on holiday, it is therefore assumed (for now) that employees can take holiday while on the agreement and it will be treated in a similar way to furlough, i.e.;

 

  1. Closed scheme
    1. Government pay 66.7% of usual pay up to a cap of £2083.33 and the employer is required to top it up to their usual pay.
  2. Open scheme
    1. If no hours worked and holiday does not exceed 20% of usual hours
      1. Employer pays for holiday
    2. If no hours worked and holiday hours exceed 20% of usual hours
      1. Employer has to pay 20% of usual hours
      2. Government will contribute 62.5% of the remaining 80% up to a cap of £1541.75
  • Employer will contribute 5% up to a cap of £125
  1. Employer tops up the difference to ensure employee receives usual pay
  1. If less than 20% of usual hours worked
    1. Employer pays difference of hours worked to 20% of usual hours
    2. Government will contribute 62.5% of the remaining 80% up to a cap of £1541.75
  • Employer will contribute 5% up to a cap of £125
  1. Employer tops up the difference to ensure employee receives usual pay
  1. If more than 20% of usual hours worked
    1. Government will contribute 62.5% of the difference between hours worked and usual hours up to a cap of £1541.75
    2. Employer will contribute 5% up to a cap of £125
  • Employer tops up the difference to ensure employee receives usual pay

 

Claiming 

The claims process opens on the 8th December so this will need to be funded out of cashflow until the grants are received.

 

Summary 

The improved version of the JSS is a big improvement for the sector on the previous version and should be seriously considered by most operators. We would recommend talking to your scheduling/payroll provider and getting an early understanding of how they will support you.

 

Government has also stated that they will update a number of their points of advice by the end of October. This hasn’t been released yet, but we will update when it has. Hopefully this won’t be the Halloween scare, we’ve suffered enough.

 

If anyone would like clarification on any of the above points, please get in touch by emailing richard@s4labour.co.uk

 

Richard Hartley

Chief Product Officer & Pumpkin Carver