Why does one restaurant hum along, making schedules with little more than pencil and paper or a spreadsheet, while others see reason to spend tens of thousands of dollars on sophisticated labor optimization technology? Selecting what's right for a particular operation means making a clear-eyed assessment of the complexity of labor demands and the goals of the business.
Back-office or Best Of Breed?
One key decision for restaurants is whether to employ the labor-scheduling functionality built in to many point-of-sale and back-office restaurant management applications or to turn to a third-party, best-of-breed labor-scheduling or workforce optimization application.
For Fazoli's, a Lexington, Ky.-based Italian chain, a history of poorly integrated, standalone applications left the 315-unit chain feeling exposed, so it sought a fully integrated suite that included a strong labor component. "Any time you have humans type in the numbers, there is opportunity for honest or intentional mistakes," says John Hesselbrock, a Fazoli's information technology, or IT, business analyst. "If it's not locked down, managers can change matrices." An integrated system "keeps honest people honest."
Fazoli's selected the Menulink back-office suite, which includes a labor scheduler instead of integrating a best-of-breed scheduler. The company then made some customizations and proposed a template for a labor forecasting model that would help produce schedules based on high-quality sales forecasts. Menulink adapted the forecasting screen and weekly schedule analysis report to help managers shape schedules that account for fixed, non-server tasks as well as guest service positions scheduled according to demand. The same report "looks at each manager's coverage of the day's business," Hesselbrock explains. "If a general manager is scheduled from 11 [a.m.] to 8, that may cover, say, 73 percent of the day's business. If they worked 7[a.m.] to 4, they may be only 36 percent. We want the aces in their places. That was key to getting our money's worth."
Deploying a fully integrated suite, including labor scheduling, also cut 30 minutes from closing routines by eliminating manual data entry. "All our food and labor is in one big software program," Hesselbrock says. Managers also can check labor use throughout the day. "Thirty minutes times four or five people times hundreds of locations times 365 days a year means tens of thousands of dollars" in savings, he adds. Hesselbrock estimates the chain saved 20 to 25 labor hours a week per restaurant while attaining schedules that "meet the needs of the business, not the people."
Nashville, Tenn.-based 150-plus-unit Logan's Roadhouse sought features and functions that weren't available in the labor scheduler built into its SquirrelOne suite of point-of-sale system, or POS, and related applications. So Logan's chose Time Management's TMx, a Squirrel Systems integration partner.
Logan's was looking for added functionality that included centralization through the Web and the ability to shape schedules according to service level demand calculation. The chain considered the possibility of having Squirrel add the functionality to its labor offering but ultimately went with TMx because the new functionality already was featured or in development. "Because Time Management and Squirrel are so tightly integrated, the resulting integration is seamless," says Chris Newcomb, senior manager, POS systems. "In the interest of time and cost, we took on some of the integration ourselves."
Logan's customized the SquirrelOne-TMx package to speed up nightly closing and reporting, marrying POS and labor-scheduling functionality. The 143 company-operated Logan's locations are beginning an upgrade from TMx version 4 to version 5. Later in the process, Logan's plans to add integration with human resources and rollout enterprise reporting functions.
"We want to maintain a kickin', upbeat atmosphere," says Newcomb. "We're reliant upon this to schedule staff the right way in order to take care of guests." The company plans to measure the success of the upgrade by tracking the resulting increases in guest traffic and sales and the response from scheduling managers and team members, he says.
Matching Jobs to Demands
Among the more advanced labor-scheduling capabilities is to create algorithms that equate tasks and labor needs with staffing levels — i.e., this many guests equals this many servers. Users and applications vary in how they set up these calculations. T.G.I. Friday's, for example, starts with recipes and measures how they trigger everything from prep to service according to expected volume, while Fazoli's bases service positions on forecasted guest counts. But all must start with a careful measurement of their operations and determination of best practices for each position. Users also require a way to modify the math as new menu items and operational changes are unveiled.
"We're not looking at it as a way to control costs; we're looking at it as a deployment solution," says Jay Johns, vice president of strategic operations for T.G.I. Friday's, a division of Carrollton, Texas-based Carlson Restaurants Worldwide. Friday's rolled out a labor management solution from Deterministics four years ago, which now is in use in 500-plus corporate restaurants, contributing to the chain's strong results since then.
"When you get rid of waste and save money and properly deploy labor, it should follow that guests are happier and return more often," Johns adds. "It's a virtuous cycle."
In the short term, implementing an advanced labor-scheduling system can interrupt longstanding habits, such as prioritizing employee availability over business needs or scheduling in 30- or 60-minute increments that don't match demand patterns. But in the long run, the result can be a more efficient and profitable operation, even for employees. Tipped staffers, for example, "are not interested in being there when guests are not," says Friday's Johns. Managers enjoy the productivity of streamlined processes — and the enhanced bonuses resulting from improved profitability, he adds, a benefit that also aids recruiting.
Operators also are viewing Web enablement as a key capability. Logan's Roadhouse sought a way to centralize its labor management to be standardized across its units. "The MyTMx interface allows team members to look at their schedules, request hours, make schedule requests," and so on, says Newcomb, making their lives easier. Also popular is the ability to contact fellow workers to trade shifts. At Kona Grill, a Scottsdale, Ariz., chain serving American fare, "I've interviewed people, and they've asked us if we have Hot Schedules software" as part of their evaluation of Kona as an employer, says Richard P. Green, district manager for the chain.
For Kona, it was essential that the same application enable telephone access — for staff without computer access — and be bilingual. "I don't believe you can do this without being Internet-based," says Green. "It's much more convenient for everyone to access." Kona is evaluating Hot Schedules in 16 restaurants, integrated with its Aloha POS system. "There was a lot of variability in our schedules," Green notes. "With Hot Schedules we're able to standardize because it's Internet-based and computerized. We have more control."
No matter the level of sophistication, it's important to view a labor scheduler as a tool and not a substitute for human judgment, operators say. While many applications will generate a schedule based on chosen data feeders, some restaurants choose to disable or discourage this feature or add a level of district management oversight so managers aren't tempted by shortcuts.
"The biggest mistake you can make is to copy a schedule forward from the previous week," says Fazoli's Hesselbrock. "That's great if the sales forecast is similar, but what if it's $3,000 different?" Managers can factor in unusual conditions and tweak schedules to suit particular units; for that reason, many provide data but encourage managers to build their schedules from the ground up.
Testing is the key to ensuring that a labor-scheduling tool helps balance the tension between minimizing labor costs and ensuring a high level of guest service. "We always test at the home office on a bench system and get feedback from operations and from our field management teams," says Logan's Newcomb. "From the beta site, we pretty much know what people want and need."
Another essential is to fully understand the software and train users to make the most of its features. "I know a restaurant franchise with the same software," says Fazoli's Hesselbrock. "They have all the tools in the toolbox, but they're not getting the return we've achieved. The reason is, we took six to nine months to learn the system then roll it out. We had to learn to hold managers accountable for results. In the past you could manipulate it if you didn't like the numbers. It took a while to teach managers to deliver on that promise."
"I think one of the biggest secrets to rollout is creating pull," says Friday's Johns. "When you try to force it, they don't want to do it." Friday's attained that through the success of early installs. "It really improved managers' quality of life and made it easier to write schedules, and [helped] shifts go smoother."
Planning for Success
Labor and food costs rank as the largest operations expenses for restaurants, so spending wisely is critical. Operators increasingly are viewing labor scheduling as a powerful tool in attaining their goals profitably.
"The schedule for the week is the most important plan," says Fazoli's Hesselbrock. "There is nothing more important. You've got to balance the needs of every person that works in the restaurant with every guest that comes in the door."