Running a small or medium-size business is no easy feat and requires a lot of time and financial investment. You should learn how to reduce staff costs. According to the recent UK Hospitality Christie & Co Benchmarking Report (2018), the operating costs for hospitality businesses are at a 12 year high.
The single largest percentage cost of the overall turnover is the payroll cost (at 29.4%), or in other words your labour cost. As a result, 20% of business owners surveyed have reported that they have had to make redundancies to reduce the spiralling operational costs.
This is alarming, given that we are in an industry where staff are potentially your biggest asset, delivering outstanding customer service and defining what hospitality stands for. For every issue, there are several solutions and making redundancies is just one of such options for business owners. Let’s see how POS technology can lend a helping hand getting on top of your labour budgets.
If you’re still relying on a paper rota wall chart in the staff room, you won’t be able to identify opportunities for reducing labour costs. A far more efficient way would be to use the HR module of your EPOS system to input staff data (ask your EPOS provider to help you with this) and rota patterns.
A good EPOS system will have the functionality to automatically schedule your staff according to pre-set rota patterns against your historical sales data. If you’re able to enter a weekly labour budget for each branch, this will be displayed in the rota and the system will automatically calculate staff costs when rota shifts are input.
Smart algorithms within the software will create accurate projections, saving having too many staff in on days when sales are predicted to be lower. This for sure will reduce staff costs.
Being smarter with rota management is essential for reducing labour costs. To form the right foundation, you must become more efficient with the way shift patterns are created and managed. Inputting the relevant shift patterns into your EPOS system means rotas can be created easily for the week for each branch and its employees.
More sophisticated point of sale systems will send an alert to the management if there is a rota clash. It will also notify you when one of your employees is already scheduled to work at a different location.
Depending on which system you use, you may also be able to copy rotas to following weeks, export as a PDF and automatically email to all employees to improve internal communications. Not to mention, it will save several hours a week figuring out complicated rota patterns!
It is possible that staff work fewer hours than they are paid for, and some employees do overtime. Finding out when your staff are at work is a lot more efficient when you have the technology to monitor and track their attendance.
Most EPOS systems will have ‘clock in / clock out’ functionality, as an employee will log in to use the system using a passcode or a biometric fingerprint scanner (the latter being a lot more secure). When this is linked to the rota, the system gives you the ability to track lateness and overtime far more accurately. To save costs, you could restrict staff from using the till system if they are not on shift or clock in too early.
More sophisticated POS software systems on the market will give you the ability to see the scheduled rota hours against actual hours worked. A manager will be able to see the variance in attendance and approve any legitimate overtime.
Facing the facts The sobering report figures highlight that pubs, bars and restaurants in the UK are faced with the challenge of being more efficient with business costs. For instance, one of the vital statistics in the report to make note of is that payroll costs have risen from 17% to over 29% since the introduction of the National Minimum Wage Act in 1998.
If you have already invested in restaurant management or point of sale system, it is worth seeing whether existing software provider can offer the right features to help you stay in control and reduce staff costs. 3S POS offers a sophisticated back-office management suite, including HR & Rota Management.