by Alastair Scott | Mar 14, 2025 | Thought Leadership
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.
by Abby Henson | Feb 20, 2025 | Thought Leadership
April’s wage increases will soon hit in full force, leaving operators in need of smarter operational strategies to offset costs and maintain profitability. It will be no easy feat, with labour costs expected to increase by around 8.3% in total, before additional increases outside of legislation.
“This increase is just the starting point, to retain talent and ensure fairness, many operators will feel pressure to raise wages across the board, not just for those on the NLW. This could lead to a significant overall increase in labour costs.”
Alastair Scott, CEO of S4labour and owner of Malvern Inns.
Supervisors often earn just a bit more than their team, and sometimes assistants, working more hours, earn less. This issue also affects kitchen staff, putting pressure on the industry to maintain pay differentials, which is unsustainable.
We estimate industry pay could rise by 10%, depending on factors like the proportion of young workers and under-21s paid at higher rates.
Differentials aside, for an average site that takes £20,000 a week on a 30% labour ratio, this will be an increase of roughly £25,896 a year. Tackling this cost alone will require operators to plan labour more effectively, to stay on target every week and drive productivity in teams enough to keep reporting profit and not loss.
As a pub or restaurant operator, how do you plan on approaching these increases?
In our guide, we want to help you get ready for April by helping you face the upcoming cost increases with the smartest operational strategy. We cover everything from forming new habits (and what habits to form), to utilising data.
Download and read now:
by Tony Rhodes | Feb 18, 2025 | Thought Leadership
As one of the largest employers in the UK, managing labour effectively is no easy feat for the hospitality industry. Accurate time and attendance tracking is hugely important to reduce fraud, ensure fair pay and maintain legal compliance, and the use of digital systems to do this makes this process a lot easier. In this article, we are outlining the benefits of time and attendance systems in hospitality:
The Hidden Payroll Drain: How Just 6 Extra Minutes a Shift Adds Up to £172.77 Per Employee
Let’s talk about lost minutes—because they cost more than you think.
Meet Sarah, a team member working in a busy restaurant. She clocks in and out for three shifts a week, every week. But before using S4labour, small discrepancies in timekeeping meant she was often overpaid by six extra minutes per shift.
Sounds tiny, right? Barely worth worrying about?
- Six extra minutes per shift = £1.20 in extra pay (at £12/hour)
- Three shifts per week = £3.60 of accidental overpayment
- 48 working weeks per year = £172.77 lost per employee
Multiply that across a team of 12 employees? That’s over £2,000 lost per year – just from minor payroll inaccuracies.
How does this happen?
- Employees forget to clock out exactly on time.
- Managers round up shifts instead of down.
- Manual timesheets and payroll adjustments introduce errors.
How does S4labour fix it? With Photo ID clock-ins, geo-location tracking, and real-time sync with the rota, employees only get paid for the hours they actually work. That’s £172.77 saved per employee, per year—straight off your wage bill.
1. Reducing Time Fraud and Payroll Inaccuracies
Time fraud in the workplace can take many forms, from buddy punching—where employees clock in or out on behalf of absent colleagues—to managers rounding up hours and manual timesheet errors. These discrepancies can lead to inflated labour costs, payroll errors, and unnecessary expenses for businesses. Digital T&A solutions, such as facial recognition, or mobile GPS tracking, effectively eliminate this risk, ensuring that only the right employees log their working hours.
- Prevalence of Time Theft: Time theft, including practices like buddy punching, can lead to significant financial losses. Studies indicate that companies may lose up to 7% of their profits due to time theft. For instance, a company earning £100,000 annually could lose £7,000 to such practices. (iris.co.uk)
- Employee Theft Statistics: In the 2023/24 period, there were 6,244 reported cases of theft by employees in England and Wales. Although this reflects a slight decrease from the previous year, the numbers remain concerning. (statista.com)
2. Paying Staff for Actual Hours Worked
Traditional rota-based pay systems often result in discrepancies where employees are paid based on scheduled shifts rather than actual hours worked. This can lead to overspending on labour or, conversely, underpayment disputes. Digital T&A captures real-time attendance data, ensuring payroll aligns precisely with worked hours.
- Unpaid Overtime: Over five million UK workers collectively worked approximately two billion unpaid hours in 2018, averaging 7.5 hours per week per worker. This unpaid labour equates to about £32 billion annually. (journals.sagepub.com)
3. Compliance with Legal Requirements
Hospitality employers must adhere to various employment laws, including:
- Working Time Regulations 1998 – Ensuring staff do not exceed maximum working hours and receive adequate breaks. Employers are responsible for taking reasonable steps to ensure compliance. (visitbritain.org)
- National Living Wage (NLW) & National Minimum Wage (NMW) – Guaranteeing workers are paid in accordance with their logged hours. Accurate T&A systems help prevent underpayment issues, which can lead to legal penalties.
- Visa and Right-to-Work Compliance – Preventing unauthorised employment of individuals with restricted working hours (e.g., student visas). Automated T&A systems provide auditable records, reducing the risk of non-compliance with visa restrictions and right-to-work regulations, avoiding potential fines from regulatory bodies such as HMRC or the Home Office.
4. Enhanced Workforce Productivity and Efficiency
With accurate attendance data, managers can analyse trends to optimise shift patterns, reduce labour costs, and enhance operational efficiency without compromising service levels.
- Impact of Time Theft on Productivity: Time theft not only leads to financial losses but also affects overall productivity. For example, an average employee might steal up to 4.5 hours per week, amounting to six weeks of lost productivity per year. In monetary terms, this could mean a loss of approximately £3,300 per employee annually, based on the UK’s average hourly salary of £14. (iris.co.uk)
5. Improved Employee Satisfaction and Transparency
Clear records eliminate disputes over hours worked and foster a culture of accountability, leading to higher job satisfaction and retention rates.
- Fair and Decent Work Agenda: Implementing fair work practices, including accurate time tracking, contributes to better working conditions. This approach emphasises fair wages, reasonable work hours, and job security, aligning with the principles of the Fair and Decent Work Agenda. (hospitalityandcateringnews.com)
Conclusion
Implementing a robust time and attendance system in the UK hospitality industry is no longer a luxury – it’s a necessity. By reducing fraud, ensuring fair pay, and supporting legal compliance, businesses can create a more transparent, efficient, and financially sustainable workforce. Investing in the right technology is a step towards operational excellence, benefitting both employers and employees alike.
by Alastair Scott | Jan 27, 2025 | Thought Leadership
We’ve certainly had a tough journey in kitchens over the past five years. During lockdown, many of our chefs left the industry, with a significant number of them becoming delivery drivers. I even ended up in a taxi once, driven by an ex-head chef from a well-known local restaurant. It’s a sad reality, but that’s what happened. This, combined with the loss of a significant number of skilled European chefs following Brexit, created a real shortage of talent in the industry.
Addressing challenges in our kitchens
So, post-covid, we were just glad to fill the roles, and in truth, we probably trod a little softly with our chefs because we needed to keep them. As a result, we may not have enforced the habits we wanted, and costs started to drift.
The chef situation does seem to have eased somewhat, but our ability to recruit non-EU overseas chefs has been constrained due to the higher reward levels now required for recruitment. Overseas hiring now mainly works for the most senior chefs. Despite this, recruitment and retention appear to be getting easier, and, just as importantly, I believe this trend will continue over the next 12 months. More people are looking for jobs, fewer jobs are available, and I think (or at least hope) that we’ll find it easier to recruit over the coming year.
That said, we’ve probably allowed some kitchen habits to slip. Start and finish times might have become too lenient. I was in a restaurant last night that had just 12 covers for the evening but still had a pot wash and five chefs! Prep might not be as efficient as it could be, and straight shifts may have become the norm.
In short, there are a number of productivity opportunities we can take advantage of if we choose to address them. But, as we all know, changing kitchen habits is tough. Teams like to work the way they’ve always worked, and altering those habits requires time, effort, and most of all, patience. But this is probably the year to tackle it.
The benefits of improving kitchen efficiency
Our analysis shows that the opportunity in the kitchen amounts to at least 10% of hours worked. Slack hours are typically much higher in a kitchen, even though the timing of prep ought to mean they can be more efficient than front-of-house. Kitchen hours vary as a percentage but typically account for about 30% of total hours worked (and kitchen cost will be higher). So, if we save 10% of kitchen hours, that is a 3% saving in total hours, and potentially up to 4% of the cost base.
For our own businesses, this amounts to around £500 a week, or £25,000 a year. That’s a big enough number to warrant action, in my opinion. We’ve already started tackling many of these areas, and while changing habits is undoubtedly challenging, the process of change is happening – slowly, but surely.
How to create a better run, and happier kitchen
In my view, kitchen habits need to be changed one at a time. Start with one easy habit and work through the change process at a pace that suits the team. But it’s important to make people realise that this is a continuous process, with breaks only for busy periods or significant changes in the team. If we focus on changing one habit each month for nine out of the 12 months, that means we can change nine key habits in a year and reach our target. The result will be a better-run kitchen and, more importantly, a happier one.
Why do I say happier? For several reasons. Being busy but not stressed is an enjoyable state for everyone. Being quiet and unproductive, on the other hand, is unfulfilling. While it may seem easier, it’s not rewarding at all. A slick kitchen team is one that takes pride in its work, creates a positive energy and fosters pride throughout the team. This is the environment we want to cultivate.
Kitchen efficiency can lead to great things. It can lead to a lower cost team, a happier team and, of course, make a major dent in offsetting the headwinds facing us this year. With more people looking to work and a growing number of young people eager to put the effort in, now is a great time to give it a go.
by Alastair Scott | Jan 13, 2025 | Thought Leadership
I suspect we are entering January 2025 with a slightly different mindset than usual. The cost pressures we’re facing in April mean we need an approach that differs from the norm. We need to be braver, more determined and more laser-focused than we ever have before.
Whether we are trying to trade our way out of the cost headwinds or manage costs more effectively, we all know we have three months to deliver a significant level of business improvement if we are to even maintain our profitability. And even if we are going to raise prices, with relatively weak consumer sentiment, price changes must be executed with real skill and precision.
Of course, the natural approach is to try a combination of all these strategies: raise prices as much as possible, put significant effort into growing sales, and drive some level of productivity improvement. I want to focus the remainder of this article on the productivity improvements we could achieve.
As always, the opportunity in January is to focus on a change in habits. Having just been through all my January rotas, the real question I was asking myself was how much I want to encourage habit change, and how much I want to impose habit change on the business. We all find this debate exceptionally difficult. As operations managers, we know we aren’t in the business often enough to ensure compliance if we simply impose changes. We also understand that service levels could suffer if we do not win hearts and minds by clearly explaining how the changes can be implemented effectively.
But equally, if we simply encourage and cajole, we might not achieve much, as our ideas could be rejected, ignored, or, most frustrating of all, the team may agree but fail to follow through. More on that later.
Our Focus in January
So, what are the specifics I am focusing on this January? First is the number required in the kitchen on a quiet Monday. The team like two, and we are better with one. Who is right? How do we design a quiet Monday to enable us to operate with one chef? Should we compromise and have two at lunchtime and one in the evening? How much we take this forward is of course the result of that eternal tussle between head office ignorance and site-level intransigence.
Second is front of house closing. Here, we must have several debates. What is a safe number of staff to close the business? What do we do if a couple of guests are still drinking? What tasks are acceptable to do before the guest leaves? And then of course, what are the closing tasks themselves? All create a level of complexity that means the solution isn’t easy, but there are precious hours to be saved if we can do this right.
And what about breaks? The team often prefers to not have breaks during the day, but straight shifts are not beneficial for either us or them. This is a good opportunity to revisit break schedules and adjust rotas so that everyone in the business gets their break at the right time.
There are also a few days when our standard staff rota is a bit too generous. We have always faced a challenge on Fridays, where we feel we need a larger team than the metrics suggest. As a result, the team ends up with a fixed shift allocation on Fridays, causing the rota to exceed the actual requirement. January is the time to reset and reassess this.
Service and Reputation
But another key aspect of January is that it is a time to focus on service. Teams can sometimes reduce staffing on the busiest shifts, which can negatively impact both service and our reputation. This Christmas, we have delivered the best service in our history, and it would be a shame to undermine that by cutting staff on the busier shifts in January. We still need to add more on Sundays!
So, as always, there is plenty to be done. But changing habits is valuable work. Finding the right balance between imposing change and encouraging the team is challenging. As a business, we are increasingly called upon to help with this, but there is no reason you cannot tackle it yourself if you make the time. And the money saved now brings us a step closer to offsetting the impacts of the NI and minimum wage increases in April. It is time to take action!
by Alastair Scott | Dec 16, 2024 | Thought Leadership
We have recently had cause to plan a complete re-lay of one of our kitchens. For those who are interested, it all comes down to the extraction flow rates. We have some of the most crucial equipment, like the chargrill, currently operating under the slowest flow rate in the kitchen (one cubic metre per second). We need to relocate it to an area where the flow rate is 2.5 metres per second.
And, of course, whenever there is a project like this underway, there is a real opportunity to make wider improvements to the kitchen, which is exactly what we intend to do. It has been a long time since I worked with Deterministics, a company that measures everything to death, focusing on process control, productivity, operations, design engineering and analytics for the restaurant industry. For me, the detail was not always the most useful, but the process was, and still is. In fact, we are using the process to drive maximum productivity in the kitchen. It is a win-win, as it also makes life easier for our kitchen team.
Optimising Kitchen & Fridge Layouts
At the moment, we have ended up feeling a bit like a Blue Peter set rather than a restaurant business. But it is really good. We have taken every session, every style of food and every number of staff on shift and mapped out exactly where they have to go to complete their tasks. We have tried to minimise walking where there are few chefs and given each team member the right workspace when we are at maximum. Not only does this structure force the kit to go in the right place, but it also forces the fridge layouts to be incredibly well thought through, which was previously an issue in our business.
Fridge layouts are the most poorly executed areas for us – my big frustrations stem from there being nothing in a line fridge, or raw items being there. It is also difficult when each chef lays out their section differently and spends half an hour relaying their section because that is how they prefer to work. We are aiming to eliminate all these items in our new kitchen.
Holding Ovens and Prep Space
We are also investing in a large hot holding oven, to both drive capacity from our chefs and, in truth, to drive quality where they have developed substandard workarounds. I think hot hold ovens, if used well, make such a difference to speed, with only marginal drops in quality. But beware the chef cooking everything off at ten and chucking it in the hot hold!
Optimising prep space has been another key focus for us when planning the kitchen. We have decided to build in dedicated prep areas so that chefs can drop off the line when it is not too busy and crack on with some prep, and then step back on the line when a ticket comes in. With the new wage rates coming in, we must start moving to this model to drive efficiencies where we can.
The final area we have looked at is a drop off space for pot wash. The reality is, we cannot justify having a pot wash when it is quiet, so we need to have the capability to let the plates pile up to a certain point.
Final Thoughts
There really is a lot to think about when it comes to kitchen design, and I think getting it right is a real skill. Each time a menu changes, it has an effect on how the kitchen is laid out and functions. If we are not careful, a really well thought out kitchen evolves into a poorly laid out, or poorly managed kitchen.
I still have the image in my head of a really big kitchen, with the pass at one end of the line and the fryers at the other end. Think about the poor chef, who either has to work up and down the line to make a portion of chips, or better yet, think of the poor customer who has to eat a portion of chips that has been held with ten others under the lights to sweat. When we do, we realise how important kitchen details are.
It is such a challenge to keep up to date with kitchens, but it is one of the many challenges that is worth the investment. The extract issue may have forced us to adjust, but the process will now add loads of value to the quality and efficiency of our business.
