With labour swallowing half or more of a healthcare foodservice budget, it’s time to look at improving productivity with the manpower that you have.
Labour often exceeds 50% of a typical healthcare foodservice department’s budget. So the ability to manage labour productivity costs is critical to controlling the departmental budget and maximizing the bottom line. Foodservice directors should focus on ramping up productivity as a way to meet increasing demands for overall cost reduction.
“If I’m an operator, I want to do everything I can to reduce labour while still maintaining high levels of customer satisfaction,” says Dana Fillmore, RD, Gordon Food Service Healthcare Segment Manager. “That means employing the labour I have as efficiently as I can. A good way to accomplish that is by benchmarking productivity in my operation.”
Benchmarking is a tool for monitoring and improving your performance. It identifies strengths and weaknesses, and reveals opportunities for refinement. It can be used for virtually every aspect of your operation, including measuring productivity.
“Benchmarking gives you the data you need to make smart decisions,” says Maria Denicola, MS, RD, LDN. She helped develop an early healthcare foodservice benchmarking standard and implemented it with great success in a previous position with a Florida hospital. “The data tells you where you are right now and points you in the direction of where you want to be.”
Internal benchmarking
The most widely used form of benchmarking is internal. It involves collecting and analyzing information to compare an operation with itself over time. “You can’t manage what you don’t measure,” Fillmore stresses. “Measuring your labour processes gives you a basis for determining what needs to be improved on and a baseline for tracking your progress.”
Calculating common productivity measures like labour hours per meal or labour hours per patient/resident is a numerical exercise using information you likely already collect. But what about all the individual labour processes that your staff engages in every day, from prepping vegetables to clearing plates?
Fillmore acknowledges that the prospect of measuring such tasks can seem overwhelming. She advises operators to perform operational audit workflows and time studies on just a few processes at a time.
“Start with something simple, maybe a task you already suspect can be improved on,” she suggests. Take rolling silverware, for example. “I know an operator who watched different staffers rolling silverware across different shifts. She timed people and determined what method works best.”
The operator then shared the results with staff and set a goal for everyone to meet—you should roll 100 sets of silverware in x amount of time. She trained staff in the proper way to accomplish the task. And she continued to monitor staff performance to hold them accountable.
“Monitoring productivity is an ongoing process,” Denicola says. “You have to keep tracking processes to know whether you’re better than last month, last quarter, last year.”
Industry benchmarking
Once you’ve measured your internal operations, you have a standard of reference for comparing yourself against others like you. This is known as industry benchmarking.
Industry benchmarking requires established sources that collect and publish industry wide operational data. In the United States, both the Association for Healthcare Foodservice (AHF) and the Association of Nutrition & Foodservice Professionals (ANFP) perform this function for healthcare foodservice.
One online tool, AHF Benchmark Express™, allows users to see how their own Key Performance Indicators (KPIs)—such as labour hours per meal and total dietitian hours worked per patient or resident day—stack up against those of similar organizations.
Although AHF resources are unavailable in Canada, the Organisation for Economic Co-operation and Development (OECD) releases Healthcare At a Glance every two years. This report compares Canada to other countries on a number of key health indicators and shows where the Canadian health system is positively performing and areas of opportunity.
Innovative food and nutrition departments are using comparisons as a way to benchmark their own departments and drive best practices. Elizabeth Boone, RD, LD, MBA, a Project Manager for Corporate Dining who works with Benchmarking Express on behalf of AHF, explains the value of comparisons. “The program uses more than 55 KPIs, about 12 of them oriented around productivity and labour cost,” she says. “Users can compare their KPIs to others of similar size, location and service style.”
Using this as a model, it’s possible to take internal benchmarking data you track and establish percentile ratings—25, 50 and 75%—to show where you stand relative to comparable operations, Boone explains.
Acting on the data
Let’s say you’re a 600-bed hospital whose labour hours per meal are in the 50th percentile—50% of your peers are spending more time on each meal and 50% are spending less. You’ll likely want to take steps to get closer to the 25th percentile.
Then again, you might be satisfied with the 50th percentile. So says Margaret Kipe, MS Ed, RD, LDN, FABC, who is Director of Nutrition Services for Tower Health, a six-hospital Pennsylvania healthcare system. She was recognized with AHF’s Benchmarking Award of Excellence in 2015.
“Higher labour hours per meal doesn’t necessarily mean you’re doing something wrong, it might just mean you’re different,” Kipe says. “Ask yourself, what is it about my operation that skews my numbers? It could be something out of your control—like a mandate to keep your cafeteria open 24 hours.”
If there is no reasonable explanation for your neutral or at-risk performance, “you’ve got some work to do,” Kipe says. “The benchmarking data leads you to question which processes or systems you could change to be more productive. It makes you an analytical decision-maker.”
It also makes you better equipped to represent your department to senior administration. “Benchmarking gives you the language to communicate your performance to the C-suite,” Boone notes. “That’s especially important when administration wants to cut staff or consider a contract provider. You can show them that you’re already operating efficiently—or that you continue to make progress—while keeping customer satisfaction scores high.”
You can also use benchmarking to justify staffing needs, as Kipe did when her administration decided to switch to room-service patient meals. She used data from other room-service providers to predict how many labour hours she would need to deliver room service at the 50th percentile—and made a winning case to hire 14 additional full-time equivalent staff.
Maximizing productivity begins with measuring productivity. The data you collect will enable you to benchmark your performance against yourself and others, and drive process improvements. You can start small, but you should start today.
Productivity factors
Consider the following when analyzing your productivity and strategizing process improvements:
- Type of meal delivery system
- Kitchen/cafeteria layout and design
- Equipment and technology in use
- Staff training and skill level
- Staff motivation
- Workflow optimization
- Staff and/or production scheduling
- Number of therapeutic and consistency-modified diets
Labouring toward success
To make the most of labour, here are some valuable KPIs to watch:
- Labour hours per patient day
- Labour hours per meal
- Labour cost per patient day
- Labour cost per meal
- Dietitian hours per patient day
- Dietitian hours per meal
- Patient days per productive hour
A valuable resource
Who: The Organisation for Economic Co-operation and Development (OECD)
What: The OECD releases Healthcare At a Glance every two years.
Why: To compare Canada to other countries on a number of key health indicators.
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