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.