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The science of scheduling is about deploying the right people at the right place in the right time to drive profit, cut costs and please customers. But the question of how to best “control” labor remains.
Now more than ever, it is vital to the long-term success of hospitality businesses that every operator find their answer to that question. Since labor is the single biggest cost—and one that will only grow—operators must figure out how to best deploy staff for optimal revenue and customer satisfaction. Rising wages, a skills shortage in the industry, and fierce competition for both the best staff and for customer spend only add to the challenge.
Failure to keep the staff happy because of scheduling conflicts leads to unhappy teams and a host of related problems. Failure to keep customers happy leads to another set of predictable and unpalatable issues. Operators need to use better the data they already have.
Useful information sits in multiple systems waiting for someone to download reports to interpret what all this data means, to assess the opportunities for operational and financial efficiencies and to gain valuable insights. The value of insight from “good data” cannot be underestimated. The quality of decision-making improves, the ability to react and adapt increases dramatically, and managers can use both their instinct and hard data when planning – a winning combination. Getting the information out of silos, turning it into insight and getting it into the hands of the operation is crucial.
Traditional scheduling, inherent risks
For decades, hospitality businesses have used the traditional approach of creating labor budgets: allowed spend based on a percentage of sales. The manager then allocates labor across the week, sense-checks the allocation against allowed spend and adds or cuts appropriately. Operators will typically apply people to set shifts with little staggering or thought to the shape of day and activity by time slot. Budgets are not phased across the week and the budgeted labor allowed by day is often not known or not relevant. The most important thing to the operator is the total weekly number.
The hospitality industry will likely never get away from requiring a targeted allowance of hours/spend/cost to be applied, so there is nothing wrong with the fundamental basis of the approach. However, if operators do not consider activity levels by day part and schedule accordingly, they will invariably be faced with too many or not enough team members to varying degrees across the week. The impact spreads across the business:
- Operators end up with disappointed guests. If there are not enough team members on a busy shift, it becomes difficult to get a drink, get a dessert within the acceptable 10-minute wait time, get a bill or interact with a server. The guest may not return, will likely to tell 10 or more of their friends about the bad experience, and will probably even share it on social media. Growing guest numbers, is cited as one of the biggest pain points for operators. Yet businesses cannot afford not to deploy teams to cover workload demand and deliver flawless execution.
- Operators end up with unhappy teams. Wrong number of team members, working at the wrong times and doing the wrong things, leads to disengagement and frustration. Teams know their tip average will drop, they feel stressed and embarrassed and their productivity levels dip. An unhappy, over-stretched team will hold the door quoting long waits, stop selling desserts, not sell second drinks, make mistakes or collect too many food orders from multiple tables at the same time, which can ultimately crash kitchens.
- Operators miss sales opportunities. The answer to the labor challenge is not spending less, it’s spending right. Spend only what is needed, but spend what is needed at the right times. Not having enough is just as risky, if not riskier, than having too much. Unhappy guests will spend less and wait longer so table turn times increase. Wait times on the door means quoting people out the door instead of delivering a great welcome and getting them their first drink. In the worst-case scenario, operators run the risk of needing to take items off the bill or give free items to appease unhappy customers.
A shift in thinking and approach
Budgets will always exist—They must, otherwise how will operators regulate spending? But it’s how they get to those budgets that needs a review and shift. Applying science is key. Start not with what the desired spend is but with the demand forecast—what is actually required to deliver in relation to expected activity. Look at how much workload there is, by area and type, and how much of that work each team member can handle in a single time slot. This approach allows the scheduler to get right into the detail of how many people are needed for each timeslot, so peak trading times are covered with the right number of people in each area to drive sales.
The key to applying this approach is tied to what operators do with their data. Operators often create schedules using gut feel, instinct and habits. They schedule emotionally because people are involved and they must consider staff happiness. While not bad practice, it misses the data analysis, the science and the rules they should build to ensure consistency of approach. That drives sales and ensures the best possible environments for guests and teams. Some of the outputs delivered through a shift in approach:
- Happier guests. Having enough team means that guests feel in control of their experience. They will spend more, will likely return, and are apt to tell a friend or two and even post a positive review online or on their social channels.
- Happier teams. With the right number of team members in place, the business is ready for battle. Add in some great KPIs for team members and you will see them deliver! It’s win-win from a human perspective. Most team members will not deliberately undersell or do a poor job, but they will not sell a second drink if they think it won’t get made in a reasonable time, and they will cut corners if their workload exceeds their capacity.
- Reduced costs. Underscheduling and overscheduling lead to overspending. Using only what is needed and increasing sales means improvement of the overall labor margin.
- Improved command and control. Schedules are easier to create as managers have more information at their fingertips for better decision making.
The right Workforce Management solution will use a forecast algorithm that looks at historical sales data, recent trends, seasonality trends, weather forecast and notable days, to accurately forecast sales and individual items sold in 60-, 30- or 15-minute time slots. And with the right Workforce Management solution, the shift to a new and better scheduling approach is easy.