Increasing margin pressure and a heightened battle for market share are two of the most significant issues facing restaurant operators today. Both factors are driven in part by current labour conditions. <\/p>\n
Profit margins are being squeezed due to external labour considerations, such as the efforts to raise the minimum wage and reform the Temporary Foreign Worker Program.<\/p>\n
Further complicating the matter is the reemergence of a tighter labour pool. A 2015 survey by Toronto-based Restaurants Canada revealed that 42% of foodservice operators are experiencing skilled-labour shortages, and 24% are facing a shortage of unskilled labour. <\/p>\n
Restaurants Canada projects that labour shortages will become even more severe in the years to come, because the share of retirees in the population is on an upward trajectory and the share of youth is decreasing.<\/p>\n
The battle for market share is also compressing margins, as full- and limited-service operators now have to compete with delivery services, \u201cgrocerants\u201d and even home meal preparation. Consumers are choosing these latter options more frequently because they question the value\u2014a combination of dining experience and price\u2014that full-service restaurants are able to deliver. <\/p>\n
\u201cToday\u2019s consumers are far less willing to accept the kind of inconsistent, undefined dining experience that staffing issues can create,\u201d says Gordon Food Service Commercial Segment Manager Doug Owens. \u201cWhen the quality of the dining experience falters, price becomes more important\u2014and other foodservice outlets have a clear advantage over full-service restaurants in this regard.\u201d<\/p>\n
While your ability to influence external labour factors is limited, you can do a great deal to mitigate the margin impacts of employee acquisition and turnover.<\/p>\n
There are multiple factors at work in this new labour environment, so there is no single solution to improve profitability and gain market share. Operators must develop a strategic plan with multiple solutions. The following are necessities of any approach.<\/p>\n
Benchmarking.<\/strong> First, benchmark your operation to determine the real financial impact of labour\/staffing issues. This will help determine how you\u2019re performing against similar operators and guide development of achievable goals to reduce labour costs. <\/p>\n Restaurants Canada provides a starting point with its annual Foodservice Operations Report. By providing general industry standards (such as labour accounting for roughly 31% of operating revenues in the average commercial foodservice business), it will enable you to gauge your relative performance. <\/p>\n \u201cOperators should purchase this report annually to continually set reasonable goals and track progress against those goals,\u201d Owens urges. <\/p>\n Hiring and recruiting.<\/strong> Before you begin the tactical process of hiring, define the \u201cvalue proposition\u201d you offer employees. <\/p>\n \u201cThink of potential employees the way you think of customers,\u201d advises Lisa McKiernan, Manager of Talent Acquisition for Gordon Food Service. Just as you create a brand that promises customers a unique dining experience, you should build one that promises employees a unique working environment. \u201cRecognize that you are being interviewed by candidates who have options,\u201d she continues. \u201cYou need to give them a compelling message that speaks to their needs and expectations.\u201d<\/p>\n As noted earlier, those needs and expectations have shifted over time. For one thing, millennial employees won\u2019t automatically grant you their devotion. You need to earn their loyalty over time\u2014just like you do with consumers\u2014by carrying through on the promises you\u2019ve made them.<\/p>\n One way to do this is to involve them more fully in your operation. \u201cMillennials want engagement and transparency from employers,\u201d Owens says. \u201cThey want to have influence and \u2018skin in the game.\u2019\u201d<\/p>\n If you can offer that to employees, you need to let candidates know it in the interview process\u2014and let them know what else they can expect, good and bad. For instance, \u201cYou may not make as much in tips here as you would the steakhouse down the street, but we have a clear path to leadership, if that\u2019s what you want.\u201d<\/p>\n This honesty will help ensure that you hire the right people\u2014ones who understand and support your vision. \u201cThat significantly improves profitability by diminishing training and turnover costs,\u201d Owens says. \u201cConsistency in employees also helps drive a consistent dining experience over time, keeping the brand promise with consumers.\u201d<\/p>\n The hiring process.<\/strong> The hiring process has evolved as radically as the work values of today\u2019s employees. Emboldened by technology, people are searching for jobs and making employment decisions in a much smaller timeframe. Operators must provide multiple technology touch points to reach job candidates.<\/p>\n \u201cInternet job postings, online applications and pre-vetting solutions that identify candidates with desired behaviours and attributes have changed the process for employees and employers alike,\u201d Owens says. These technologies can help position you as an employer of choice while reducing the time and cost of employee acquisition.<\/p>\n Retention\/motivation.<\/strong> Retaining employees in a highly competitive market is challenging. Higher competitive wages can drive employee defections, but you can counteract the lure of higher pay by continuing to deliver on your value proposition. <\/p>\n Here are four retention strategies worth considering: <\/p>\n \u201cOperators are often reluctant to invest in retention, but it more than pays for itself in reducing turnover costs,\u201d Owens assures.<\/p>\n The leadership factor. <\/strong>None of the strategies outlined here will be successful unless you develop strong leaders. Provide both leadership candidates and already-in-place leaders with ongoing training, which must include an understanding of your target employees.<\/p>\n Your leaders\u2019 ability to communicate your brand and vision to your employees will directly affect the employee experience\u2014and in turn, the guest experience. <\/p>\n The key to resolving your staffing issues isn\u2019t in the identification of issues and potential solutions. It\u2019s in the ability to implement solutions through strategies your leadership can deliver against. Make that happen, and you\u2019re on your way to increased profitability and guest counts.<\/p>\n","protected":false},"excerpt":{"rendered":" As the labour market tightens, it\u2019s a good time to work on easing the financial impact of turnover and hiring. Increasing margin pressure and a heightened battle for market share are two of the most significant issues facing restaurant operators today. Both factors are driven in part by current labour conditions. Profit margins are being […]<\/p>\n","protected":false},"author":19,"featured_media":4464,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[122,123,112,69,111,113],"tags":[],"class_list":["post-25877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-catering-small-business","category-hotels-hospitality","category-restaurant-bars","category-running-your-business","category-healthcare","category-university"],"acf":[],"yoast_head":"\n\n