Following significant challenges over the last two years, hospitality is endeavouring to bounce back as restriction-free trading sees a new dawn for consumer demand. However, significant challenges are well documented, such as rising inflation, perilous utility costs and staff shortages, are already stuttering growth, as operators continue to navigate uncertain times.
According to a recent UKH, BBPA and BII member survey (May ’22), energy and the price of goods are first among the cost issues for members impacting margins. Furthermore 1 in 3 members are struggling to meet overheads or debts. Trade campaigning to reform business rates, training investment, access to people and a cut in VAT are being lobbied via targeted campaigns from our three main trade bodies.
The third factor negatively impacting margins is labour costs, an area which always has been and likely to remain operators’ highest variable cost. Indeed, people costs look to steadily increase due to legislation (National Minimum Wage/ Living Wage/ rising NI). However, labour is controlled differently across the industry – partly because hospitality is so diverse but also because knowledge, systems, training and management styles all vary across larger companies, multiple and single operators. This leaves an inconsistent approach and smaller multiple operators; leased, tenanted and single site operators seem to be missing out – generally the operators with the highest cost burden in relation to revenue.
Larger operators (bigger pub companies, well-known pub and restaurant brands) have managed their labour costs, historically by week and over recent years, daily, as part of their KPI’s. How much labour is invested each week is another conversation, with some operators keeping investment tight, others choosing to spend more, investing in service for more sales. Interestingly there’s evidence of increased labour investment (when operators have enough people in the first place) during this period of lower footfall for many but there’s a spend per head and premiumisation opportunity.
S4labour enables single site operators, as well as larger multiples, to view their labour and revenue spend in-week via a till link, hence full visibility of labour costs – by day and by hour. Visibility of labour may prompt shift changes, moving hours to suit weather patterns, unexpected events or enables daily reaction to review sites (Google/ Trip Advisor etc) about service. The ability to move team hours around the rota, to suit trade fluctuations ensures ‘Slack’ hours (too many people) are re-scheduled to ensure minimal ‘Stress’ (not enough people) during service. Forecast till revenue helps guide the future, while reporting an accurate labour performance in the past – from previous days till data, previous weeks and against last year for a like-for-like view.
Bigger operators are using versions of this technology via their head office teams – now it’s time for multiples, leased, tenanted and Free Houses to have access to a labour tool which suits smaller businesses. A digital rota saves time – time which can then be used to manage people around service peaks and troughs, for more sales. Teams also like to view their shifts via a modern, simple app – with additional functionality to swap shifts if needed – it’s a modern, professional way of working with your teams and ready for all the new people that will hopefully be attracted to our industry.
S4labour are launching a campaign for operators to ‘Get to Grips with your daily labour spend’ – the 3rd highest but controllable cost. Operators currently spend time and investment controlling food and drink margin, food GP, drink yield and wastage – the industry is historically tuned to those areas. Spending a few minutes monitoring labour hours versus revenue and allocating accordingly is a much bigger prize. It’s also a data driven approach using site specific till data, while being really simple to implement and making a huge difference.
‘Smart tech’ should solve real problems, save time, or improve productivity – S4labour does all three:
- Enabling daily visibility of labour – a large number of smaller operators generally manage a weekly rota and manage costs retrospectively, there’s now a solution for in-week labour cost visibility
- Saves time via a digital rota,
- Increases productivity via allocating hours to maximise service peaks and troughs, to maximise sales,
- Forecasting becomes more accurate as more of the right people are in the right place for the right amount of time – all guided by operators’ own till data.
S4labour help sustainable businesses ensure longevity in these turbulent times – there’s no reason why smaller players shouldn’t be embracing the opportunity to ‘Get to Grips with your daily labour spend’ – to be on at least the same playing field as the bigger players.