The margins of profit for a restaurant depends on controlling the necessary expenses such as food and labor costs. Restaurant technology tools can help optimize these costs efficiently.
Applying technology to control food costs can be easy and we have outlined four ways restaurants can use technology to increase profit margins by optimizing costs.
1. The impact of data-driven scheduling
A restaurant constantly generates data, which can be leveraged to make better scheduling decisions that match labor spending with labor needs.
For instance, sales forecasting is a robust restaurant management tool that can pull historical sales information from a point-of-sale system. It is to project sales per labor hour goals and help managers make in-the-moment decisions about strategically using breaks, cuts, or call-ins.
Other scheduling software features can help managers keep track of and minimize potential employee overtime or set enforcements for clock-in/clock-out times.
2. Hiring, scheduling, and payroll tools
Point of Sale systems can streamline many of the most time-consuming tasks for restaurant managers, from hiring to scheduling and payroll. As a result, other commonly neglected functions will be given more time, especially on planning and marketing aspects.
Restaurant hiring has traditionally been a very manual, paper application-driven process. Today, tools like an applicant tracking system can save managers time and make the process easier for applicants.
Features such as prescreening questions or assessments through an ATS can help a restaurant gauge how interested an applicant is in a position through their willingness to complete extra steps before inviting the applicant to an in-person interview.
In an article, Sweet Lou’s, a local northern Idaho restaurant group, found that an assessment tool changed its hiring process. When co-owner Chad Foust scheduled interviews with applicants who had completed the assessment, he reported that nine out of the ten candidates appeared for the interview.
In the scheduling factor, employee scheduling software can help business operators and managers streamline the most repetitive, time-consuming elements of the task. Templates, centralized dashboards for shift change requests, and integration of sales forecasts can empower the one who manages the restaurant to create better schedules that are more accurate and faster.
Furthermore, leveraging technological tools for HR or payroll can make the process more efficient for staff. For example, for new hires, automating onboarding paperwork is highly recommended. Apart from that, it has features like accurate and on-time payroll processing, which can provide dual benefits: contributing to positive employee experiences and saving time for management.
3. Keeping tabs on labor costs
With the right technology tools, restaurant owners and operators can leverage granular data points to make informed decisions about labor costs. One perfect example is a restaurant that can track labor productivity as a percentage of sales through data metrics such as customers served per labor hour or sales per labor hour (SPLH). A close look at costs by day part, through daily or even hourly sales forecasts, can fuel decisions about where and when employees are most needed. In addition, and specifically for multi-location restaurant groups, breaking down labor costs by location can help operators determine trends where additional training or controls may be needed.
4. The value of employee retention
Hiring, recruiting, and retaining high-quality personnel is a severe problem for many restaurants. However, a high turnover rate is costly between understaffing issues or resources wasted on frequent training. To control labor costs, restaurants must work to improve employee retention in multiple ways.
First, upgrading technology in the hiring process can help your business recruit the ideal candidate. An ATS can help restaurants communicate efficiently with candidates and prescreen applicants. The more streamlined the hiring process, the more time hiring managers can spend developing meaningful relationships with candidates who fit the company culture well.
In addition, technology can be used to examine the root causes of low retention. Let’s take, for example, if staff members are experiencing irregular schedules or are not getting enough hours. These issues can increase turnover. A restaurant may need to implement labor cost controls, but regular reviews of employee scheduling data can also help address staff concerns.
Restaurant owners and operators have more access to data and software to improve labor operations. When applied strategically, today’s POS systems can help restaurants optimize labor costs and improve their bottom line.
Book a Demo with eatOS to help implement some of these ways and to learn more on savings costs.
