WHITE PAPER

3 Ways to Optimize

By Richard Slawsky | Contributing writer,

Fast Casual

SPONSORED BY:
 WHITE PAPER

3 Ways to Optimize

By Richard Slawsky | Contributing writer,

Fast Casual

SPONSORED BY:

Restaurant operators are facing major challenges when it comes to hiring and maintaining
a quality, motivated labor force. Turnover in the restaurant industry has been on the rise for
years, while at the same time the number of young people in the labor force has declined.

According to the Bureau of Labor Statistics, the employee turnover rate for the hospitality
industry has been increasing for the last five years. In 2010, the average turnover rate was
56 percent; by 2015, this has spiked to 72 percent. Dallas-based research firm TDn2K
reports that in 2015, 71 percent of all voluntary terminations had been on the job for less
than one year.

Combine those trends with higher wages and new labor regulations, and it is apparent that
restaurant companies of all sizes are facing a labor crisis. Fortunately, there are some steps
operators can take to get ahead of these. Those steps were part of a panel discussion at
the 2016 Fast Casual Executive Summit, held in October.

Utilize Technology
As the labor market gets tighter, many operators are turning to technology as a way to
manage the issue.

© 2017 Networld Media Group | Sponsored by Long Range Systems

2
“Technology in the right place at the right time can be really powerful,” said Juan Martinez
of Miami-based Giardino Gourmet Salads. Panelists agreed, however, that it is important
to leverage technology but maintain a human outlook.

Many operators utilize scheduling tools to manage labor effectively. But according to
Aaron Day, founder and president of fast-casual restaurant Blue Lemon, “one of the
biggest problems when using labor scheduling systems is that you’re not using the human
element. Scheduling a good mix of people and experience levels on a shift can go a long
way in promoting retention and improving morale,” Day said.

One of the most attractive features of a restaurant

industry position to today’s workforce is schedule
flexibility. “I created an availability chart for
workers to pick when they absolutely could not
work, when they could work, and when they’d
prefer not to work,” Day said. “It’s amazing what
happens when you empower your team.”

Additionally, technologies such as Table Tracker

by Long Range Systems can help operators run a
shift more efficiently by speeding up service and
reducing labor.

When a guest places an order at the counter, the cashier gives them a Table Tracker
device. The Table Tracker looks like a traditional restaurant pager, but it is packed with
operational power and analytics.

Guests receive the Table Tracker when they place their order at the counter. They then
take the Table Tracker to their chosen seat, and the device reads their location number via
RFID tags installed under the table. That information is communicated to the point-of-sale
system, so when the order is ready the runner knows exactly where the food should be
delivered; ensuring guests receive their food as soon as possible. Table Trackers provide
analytics like order times, allowing managers to adjust schedules to meet peak demand.

Blue Lemon uses the Table Tracker system in all of their locations. “We have lines out the
door during big service times, and our runners don’t have to walk around with the tray
looking for the guest. We can use one less runner, and our food is hotter because it gets to
the table faster,” said Day.

Self-order technology is another area where operators can pass basic ordering tasks to
a kiosk and redeploy workers to perform more personalized interactions with customers.
“When you think about it, about 25 percent of guest service is order taking and cash
handling. Being able to remote that to a kiosk impacts efficiency and labor costs. Then,
you don’t have to increase prices,” said Martinez.

© 2017 Networld Media Group | Sponsored by Long Range Systems

3
Many businesses are combining self-order technology like kiosks along with table tracking
to redeploy labor. Labor that was once tied to the ordering process can instead now focus
completely on the customer experience.

Differentiate with Culture

In the late 1970s, restaurants employed an all-time high of young labor at 58 percent.
This number has plummeted to 41 percent as of 2007, and just 34 percent as of 2014,
according to the National Restaurant Association. The net effect was a decline of 1.4
million teenagers in the labor force between 2007 and 2014. There are a number of
reasons why turnover is on the rise, but company culture is paramount for retention today.

“Recruiting, turnover and retention all tie back to communicating effectively around a
brand’s culture,” said Michelle Strong, CMO at Long Range Systems. “Employees are
paying attention to the company’s social reputation, what customers are saying about a
brand and how that worker will be associated with that brand.”

This rise in turnover has a real impact on

operators’ bottom lines. The cost of hiring and
training an hourly employee can top $2,000,
according to TDn2K Research, rising to more
than $13,500 for managers. A company that
employs 50 hourly workers and four managers
faces more than $112,000 in turnover costs
each year. For a company with 30 locations,
that’s a whopping $3.4 million per year.

A common complaint from restaurant

operators is not just that the available
labor pool is shrinking, it’s that the quality
of candidates coming through the door is
lacking. One of the key steps an operator can take to improve the quality
of the applicants they attract is to make recruiting an ongoing process.

All too often operators “hire by panic,” waiting until they are down two or three staffers
to begin the recruiting process. This type of disruption results in poor service and food
quality, which can result in even more turnover.

Even when the location is fully staffed, operators should continue recruiting, expanding
their efforts beyond the typical teen labor pool. “An interesting shift I’ve seen is a lot more
baby boomers looking for part-time jobs,” said Day.

Another way operators can improve culture is by demonstrating the career opportunities
that exist in the restaurant industry to young talent. When a teenager leaves to go to
college, are they being told of the opportunities that may be available with that company
once they finish their degree?

© 2017 Networld Media Group | Sponsored by Long Range Systems

4
“No matter how technology changes, people will always have to eat and there will
always be a restaurant industry,” said Eric Lavinder, Executive Director of Operations
at ML Food Group. “You can go into marketing, operations or training in addition to
managing a restaurant,” he said. “Those jobs exist and we have to do a better job of
telling workers about the opportunities.”

Identify New Sales Opportunities

There’s an old saying in the restaurant industry along the lines of “sales fix a lot of
problems.” In other words, identifying ways to increase sales can solve many of the
financial issues facing restaurant operators today. Operators can ask themselves a
number of questions: “If we aren’t offering breakfast, should we be? What about catering?
Are there local businesses that are potential customers for catered lunches or events?
What about instituting delivery to a limited area nearby?

Simple changes can often be made to maximize sales productivity. For example, rather
than bringing in a separate prep crew in the morning, operators can have line employees
perform some of those tasks between the lunch and dinner rushes. Other tasks might be
able to be performed by closers once the dinner rush subsides.

“It’s not always the person or people you

hire – there are inefficiencies, processes or
products that get in the way of success,”
said Lavinder. “If your staff is spending time
chopping veggies and the cost is “X” for a
person to stand there and do that for two
hours, compare that to the cost to buy them
pre-chopped,” Lavinder said. “You have to
analyze things like that to make sure that
you aren’t missing something. It’s a matter
of working together and getting that data
from your team.”

There is no doubt that managing labor costs in today’s restaurant landscape is

challenging. But when operators harness the power of their employees, technology and
new sales strategies, their business can undergo transformative growth.

About the sponsor:

Long Range Systems (LRS) is a leading global provider of on-site paging, guest management, business intelligence
and market research tools. The company’s hardware and software solutions are used in a variety of settings, including
the hospitality, medical, retail and automotive industries. Specifically for fast casual restaurateurs, LRS developed
Table Tracker: the fast casual food-delivery system that streamlines operations and improves customer satisfaction.
Table Tracker helps food runners deliver food faster, instead of wandering around the restaurant looking for guests.
It’s proven to turn tables faster, improve guest satisfaction and streamline operations through knowledge and insights
provided with order-tracking data.

© 2017 Networld Media Group | Sponsored by Long Range Systems

5