How to Adapt and Succeed with Reduced Staffing Levels: Hours of Operation & Menu Size
For years, the Food & Beverage and hospitality industries have faced many challenges to acquire and retain talent at all levels. As we all know and have read for many months, this has been compounded by the changes in the workforce since the pandemic. This article is not about how to retain or attract employees as there is a lot of great information and posts available already. This is about dealing with the reality of long-term staffing shortages.
No matter what happens, one fact will remain. There will not be enough employees to go around anytime soon, and there will be a need for more significant and longer-term strategies to attract people to our industry.
Over the next three blogs, I will focus on how we can begin to address the realities of long-term staffing levels and adjust your operation to meet the workforce that you have. What is the reality of your staffing levels? Not the hope or the goal, but the reality? As a first step, you have two options:
- Keep trying to do everything the same way they always have, fight through it, and see what happens.
- Change their perspective and act.
The second option is the right one and will require some work, but you will be headed in the right direction. To begin you need to look at the reality of your staffing situation. In the past, you may have needed 10 cooks but only have 8 or 3 hosts and now you have 2. The minute you start to say out loud that your kitchen needs 8 and you have 8, and you need 2 hosts and have 2 you have solved your staffing issues. No more problems as you have the exact number of staff you need.
By making this statement, you start to create a more positive environment for you and your team to work in. If you walked into work tomorrow and said “It is going to be a great day. We’re fully staffed with 8 cooks and 2 hosts”, imagine how much better you and your team would feel? Going from being a victim of circumstances that you can not control to taking ownership and regaining control is important.
That leads to step two, which is figuring out what area to focus on based on needs. Now, you will reimagine, reengineer, and make changes to your processes to meet your staffing level. Positive thoughts can only take you so far and it has never been more important than now to have a highly engineered process and systems.
To help you make the right decisions about adjusting your operations, over the next three blogs I will break down the key parts to helping your deal with the new reality of your staffing levels:
- Structure – Menu size and hours of operation
- Purchase vs produce in house
- Fine-tune and Redesign processes for the long term
Hours of Operation
If you are considering reducing your hours of operation, there are two factors to consider – profitability by hour and what could be around the corner.
The reason profitability by hour is the key metric is that volume (covers) does not paint an accurate picture. A restaurant can be at capacity from 5:00 pm – 9:00 pm every day and moderately busy from 7:00 am – 4:00 pm. The flurry of activity that happens each night may make it seem like those are the most profitable hours, but they may not be and only data can tell you.
Here is the math:
Revenue per hour – Cost of goods based on the same hours and the actual cost of each item sold (not the overall food cost) – Variable Payroll per hour of service (Hourly) = Profit per hour
Constants (Do not include these items because each one must happen every day no matter what)
- Set up, prep, and closing (cleaning) costs
- Fixed labour such as managers. There could be a reduction in labour management payroll depending on what changes are made.
What does the data show?
Low profit in the AM or later in the PM may mean you can open later or close earlier. Make sure to consider the following:
- How will that impact the hours of work for the employees?
- If you push the start time later in the morning, will you have too much overlap in the middle of the day?
- Ending the day earlier may require you to bring employees in earlier creating the same overlap. Keep in mind if your employees are full-time and you cut their hours, they will most likely go elsewhere.
Do you have low profit midday? Does it make sense to completely close during that time or will you have more downtime by people closing and reopening mid-day? You may be better off trying to drive in new business mid-day than closing.
So, maybe you have determined that you can reduce hours. Now, adjust your current P&L removing the lost revenue, food costs and labour savings. If you have equal or more profit and have solved the staffing problem, then your plan works.
If you have less profit and solved your staffing issues, then changing your hours may still be the best option because providing poor service to your guests and a bad environment for your employees is not sustainable.
If the change is worth the outcome, then it makes sense.
The last piece
Before you change the hours sit back and reflect. You may think closing early makes sense right now but what is around the corner? Remember a lot has changed in the last 2 ½ years. Are you located in the theatre district and shows are winding up and in turn increasing volume later at night? Whatever it is that is coming, use your knowledge of your customer base as the last check.
With staffing shortages, your first instinct may be to reduce the size of the menu and based on the supply chain issues you may have already been forced into this.
The Bar Menu
There will likely be less of an impact on the bar menu especially if your operation prides itself on the crafted cocktails. In that case, seek out the best bartenders and do everything to keep them. Losing what you are known for means losing your identity. Otherwise, bar menus are somewhat universal with little variation. Since changing the menu is not going to make an impact how can you address shortages in bartenders?
Some operations allow each server to prepare their own alcoholic beverages, I am not a fan of this idea, and it is not a long-term solution, but for the short term it can work. The bar needs to be tightly controlled as it is famous for being an area with the most potential theft and some of the best stories. If you do allow this, put in better controls for counts and reads. Even if you are not watching everything make it seem like you are.
Pricing and Selling Strategies
If you normally have two bartenders but only have one, you can use pricing and selling strategies to reduce the number of prepared drinks to speed up service. Consider a fresh and well-garnished Sangria positioned in plain view and priced to sell or special prices on easy-to-make or bottled beverages.
With little option to change the menu, your best bet is to steer the customer to the beverages that are going to take the least amount of work. You may sacrifice some profit margin, but if your service is slow guests will not be happy. Slow service can also lead to reduced table turns which will have a greater impact than the loss of a small amount of profit margin. Normally I would say drive margin and if you can, do it.
The Food Menu
Let’s start with food service. Many people believe that there is a direct correlation between menu size and staffing levels. There is a correlation, but it may not be as significant as you think. A smaller menu can lessen the number of items to prepare and allow you to combine stations (more on that in the weeks ahead). The term workload is very important as fewer items to focus on can speed up service and allow a cook to take on more items. But this is not always the case. Let’s say you have four pasta dishes on the menu and serve 25 portions of each nightly. You trim the menu down to two pasta dishes and sell 50 of each. The workload stays the same and while the cook does not have more time, they have more focus.
That is not to say that having the right size menu is not essential, it is, and you should go through a menu engineering exercise to see what items may be easily removed. You don’t want to remove those two pasta dishes if they are popular and profitable because you could be steering your customers to items that are not profitable and create more work.
If you have a large menu there is a good chance you can take off some items without impacting the guest experience. A smaller menu makes it faster to execute in the kitchen which can result in less staff and less prep work. There can also be savings if you can remove very labour-intensive or one-off items. But be careful not to remove items that impact your guests’ experience, your reputation, or your signature dishes.
What about the prep?
If you can consolidate prep work or improve the process, you can reduce the number of hours needed. In most cases, it is unlikely that you can save a substantial number of hours by reducing menu size, but every little bit helps.
Let’s say you needed (past tense because what you need and what you have is different) 4 cooks all working 8 hours to do prep and work through service. Your reality is you only ever seem to have 3. If you reduce the prep work by 4 or 5 hours, you may be able to find a part-time cook to work 4 hours during service. In some cases, especially in larger cities, you will find it easier to hire a PT cook who has another job than a FT cook. Again, every situation is different and somewhere there is a great strategy just around the corner.
Lastly, as with the bar menu, use selling strategies that enable you to meet guest expectations with content and execution.
In the current staffing climate, there may not be one solution that addresses the issues, and the solution may involve a variety of activities. Hours of operation and menu size are just two potential first steps.
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