In this episode of The Tip Share, we dive into the second segment of our 3-Part mini-series for QSR growth strategies. In Part One, we spoke about how leveraging technology can help operators actually reduce costs and improve efficiencies in today’s current industry climate, and what types of tech operators are utilizing to grow their businesses. Our top takeaways from the session? Streamlined Data, Automation, and Integration (de-fragmenting systems) all help to create operational efficiencies by getting rid of manual processes, and provides greater accuracy and visibility into the business, enabling operators to make better business decisions, ultimately increasing profitability. During this session, RASI Director of Partnerships, Brad Bertram, sits down with Don Kreye and Don Bye from Delaget, to discuss how technology can help increase efficiencies with specific regards to labor management.
WHY IS TECHNOLOGY AND AUTOMATED DATA NECESSARY TO HELP MANAGE LABOR COSTS?
Through the use of technology, operators have the ability to build their own schedules via automated systems and they also have the ability to view how their restaurants performed the prior day or even throughout the day.
Having these capabilities speeds up the data transformation into actionable insights, and ultimately saves both the time and effort of compiling all that information that operators would otherwise have to manually assemble themselves.
Having visibility on what’s going on within the four walls of each restaurant on a daily basis is vital for success.
Additionally, utilizing automated data to make the simple transition from biweekly payroll cycles, which has been the industry standard, into a weekly cycle can actually decrease total operational labor costs quite simply because weekly payroll forces management teams to pay tighter attention to their time clock detail report, and not question those potential overtime hours – especially now with a continuously rising minimum wage.
Having accurate data that enables operators to make quick decisions on a scheduled/no scheduled-versus-actual basis, can make a substantial impact on an operation’s true labor cost.
WHAT TYPES OF TECH HELP TO INCREASE THE EFFICIENCY OF MANAGING LABOR?
A scheduling tool will enable an operator to view the existing versus previous year sales or view the last week’s sales which will indicate how much staff should be scheduled out; let alone during which parts of the day that staff should be more heavily scheduled. Building schedules based on trued data points saves management teams hours additional labor.
Additionally, the data received from a scheduling tool can take a bird’s eye view of an operation and shine a light directly on labor expenses, typically about 30% of an operator’s overall operating expense. That’s a large chunk of money where operators clearly need to place their focus, and if they’re only paying attention to those numbers from the payroll report every two weeks, it’s a missed opportunity that should be managed daily.
TIP: Operators need to look at stores’ clock-in and clock-outs every day. Having this type of automated system will not only help managers save time, but it will also aid in making the process far less painful as well.
WHAT ARE SOME OF THE CHALLENGES THAT FRANCHISEES FACE IN TODAY’S COMPETITIVE ENVIRONMENT?
INTERNAL TURNOVER: Turnover takes additional attention from the whole office leadership to hire new employees, train new employees, and it ultimately lowers efficiencies and productivity, which results in lower profits.
TENURED STAFF WHO ARE OUT OF DATE WITH TECHNOLOGY: Like internal turnover, if management is forced to constantly keep tabs on employees who have been “doing the same thing for 20 years and not keeping pace with new technology or new processes,” efficiencies and productivity is going to decrease as well because the focus will be on helping those tenured staff members as opposed to on revenue-generating activities.
Many Franchisees in this current market are facing the reality that they need to make the hard decisions in these tough times regarding personnel. It’s imperative for these operators to have sound information on all the alternatives available to them, which may even include outsourcing for the systems and services that are going to provide them with the greatest path to success.
While the restaurant was built upon manual processes, and the 20-year employee may have been doing it the same way for a long time; times have changed. There’s a need for technology in order to streamline and increase efficiencies in order for operators to save money, time, and effort.
WHAT ARE KEY AREAS TO RESEARCH ABOUT AN OUTSOURCED FIRM WHEN VIEWING ALTERNATIVES TO HOME OFFICE PERSONNEL MANAGEMENT?
Successful Franchisees have been outsourcing more and more within their home office personnel setting, whether it’s accounting or payroll software, completely outsourcing the team, or just outsourcing part of the team. On the flip side, many Franchisees already have successful team members in place, so they don’t want or need to outsource that function, but they do still need the additional technology measures in order to scale properly.
As restaurant groups are looking at acquiring more locations or looking into additional brands or new franchise models that they’re interested in, allowing that scalability is really where the technology can help them keep their finger on the pulse of their business on a daily basis.
Whatever position a Franchisee finds themselves in, it’s critical to have good information on outsourced providers in the following areas in order to make the best decision for their franchise and their team:
- On-boaring Process
- On-going Management
WATCH THE FULL VIDEO BELOW TO LEARN HOW TECHNOLOGY IS HELPING FRANCHISEES BECOME BETTER DECISION MAKERS:
WHY IS IT NECESSARY TO SEEK VENDORS THAT HAVE INTEGRATED, AUTOMATED PROCESSES?
First and foremost, having integrated, automated processes cuts down on manual internal processes. Calculations are going to be completed accurately and in a timely manner, and the team is going to have their information before you before they’re actually ready for it, enabling them to stay a step ahead at all times.
Having that timely and accurate financial reporting is vital to have the knowledge about the true cash position of the business right now, especially when sales are declining due to a pandemic and labor costs can look like an EKG Chart.
Add to that, the substantial impact of takeout only type situations where third-party vendors take a substantial cut from sales; So, knowing top-line revenue and all the expenses below that, gives operators the understanding of where they need to focus their activities in order to remain as sustainable as possible.
When restaurants have 15+ different technologies and 10+ different data sources for those technologies, they’re unsure of where to look for the specific data points needed to make better decisions.
Having a provider that can consolidate and manage those data sources helps to reduce IT costs, management time, decrease human error on that data transmission, and truly streamline reporting making operators more proactive.