As we all know, hospitality is a people business and people have emotions, views and habits which they may be resistant to changing. This means decision-making can be an emotive subject, and labour costs and targets are probably one of the most sensitive areas to address. Opinions vary widely on what constitutes the ‘right’ labour cost, making it one of the most hotly debated topics in the business. While some managers believe that senior management’s cost-cutting measures hinder sales, especially during peak periods, others argue that excessive spending leads to inefficiencies and wasted resources. Striking the right balance is no small feat.
Often when these managers leave the business to run their own, they immediately invest in labour with the sound knowledge that their business will thrive. They see an opportunity to prove themselves right and show their previous bosses to have been mean, corporate profit chasers. But typically, after about twelve months of investment in labour, which often translates to losses, they hit the cold economic reality that they cannot afford as many staff and have to cut back. In doing so, they may inadvertently undercut their own operations, leading to reduced service quality and, in some cases, the collapse of their businesses. These experiences impart a hard-earned lesson: overstaffing is far riskier than understaffing.
The key takeaway from these scenarios is that effective labour management requires precision. A corporate target for labour costs is futile if managers lack the training to achieve it. Understaffing and overstaffing are symptoms of the same problem: a failure to manage labour strategically. For instance, running a shift with five team members can produce dramatically different outcomes depending on the quality of leadership and planning. Without effective shift leadership, even the best resources can be underutilised, leaving teams feeling overwhelmed and wrongly attributing poor performance to understaffing.
This is where the importance of top-down labour management and training really becomes noticeable. Setting standardised labour practices and clear expectations alongside introducing feedback loops and hands-on training will be extremely effective in embedding better labour practices into the business.
A poorly managed afternoon shift, for example, might neglect critical slack tasks, setting the evening team up for failure as they struggle to catch up. This domino effect not only impacts operations but also affects team morale and customer satisfaction.
This underscores the industry’s pressing need for labour management training. Training not only equips teams with practical skills but also helps change entrenched habits that hinder progress. Poor habits, such as inefficient time management or inadequate task prioritisation, are pervasive. Training teams, managers and ops managers to be better is the only way to help them. But how? Breaking these habits requires a carefully balanced approach that combines enforcement with support—what might be termed the ‘carrot and stick’ method. Tightening rotas without providing the necessary training leaves employees frustrated and ill-prepared, while training without enforcing changes risks making the effort redundant. It is only by combining these two elements that businesses can break free from the cycle of poor service and high staff turnover.
The path to improvement cannot be rushed. Effective change requires targeted training that addresses specific aspects of labour management. For example, quieter shifts present unique opportunities to reset and prepare for busier periods, but these opportunities are often wasted without proper training. Similarly, kitchen management demands specialised training to ensure efficiency and coordination in one of the busiest and most critical areas of any hospitality business. Each aspect of labour management comes with its own set of challenges, and each requires a tailored training programme to address them effectively.
Ultimately, the success of any labour management strategy hinges on a commitment to investment—not just in staffing but in training. A well-structured training budget is not an expense; it is an investment in the future success of the business. Approaching labour with the same mindset as before but with fewer people is a recipe for failure. Instead, the focus must shift to delivering the right training, supported by precise execution and a willingness to adapt. This is the path to long-term success in an industry where the demands are constantly evolving.
Alastair Scott is CEO of S4labour and owner of Malvern Inns.
