Labor costs, particularly in areas with mandated increases in the minimum wage, are a huge pain point for restaurants. Two-thirds of restaurants in areas where the minimum wage was raised have seen their labor costs rise between 3% and 9%, and another 16% have experienced a jump of 9% to 12%, according to a recent study.
To offset this increase, restaurants have eliminated positions, cut hours, and raised prices. Customers are left paying higher prices for worse service, and employees are working fewer hours while juggling more on a shift.
Yet there is another way to reign in labor costs while improving the manager’s, the staff’s and the customers’ experience.
Restaurants can save thousands of dollars a month just by transitioning from a bare bones scheduling system to a restaurant scheduling software. In fact, by using a labor management app that improves communication, helps hit labor targets, and streamlines scheduling tasks, operations can save an average of 2%.
For restaurants doing $1 million in annual revenue, that savings adds up to an extra $2,000 a month.
If this seems like an implausible amount to save just by switching to scheduling software, but 7shifts customers are already experiencing exactly that.
Let’s break down how those savings add up.
5 Ways Restaurant Scheduling Software Improves Staff Communication
It’s easy for managers to get overwhelmed by the sheer number of individual staff availability needs, and requests that are directed at them each week.
Adopting schedule management software funnels all that feedback into a single staff communication channel—and opens employee scheduling up to be a more collaborative and engaged process.
Switching to a labor management app with integrated time-clocking tool helped the Denver-based fast casual Birdcall, reduce average employee late time from over 12 minutes to less than 2 minutes in just 5 months.
Just imagine what you could do with all that reclaimed free time: Have more face time with staff and customers on the floor, or offer more training, or finally make that call to get your kitchen equipment serviced.
Or maybe, it’s a just more capacity and mental clarity to handle the inevitable fires (literal and figurative) that you need to manage.
Not only does a scheduling app free up time, but it cuts down on the daily build up of admin work when juggling multiple forms of communication. With these chronic, clutter-induced headaches cured, you are free to focus on creating more efficient, compliant schedules that will also reduce labor costs.
1. Streamline time-off requests
Many restaurant managers still use paper and pen for shift scheduling, which means that employees’ time-off and availability requests are made via notes, call, emails, and texts. As a manager, that means dedicating mental bandwidth to fielding and approving requests—which, without a standard process, are at risk of being lost in the shuffle.
While some point-of-sale systems offer scheduling features, many don’t include the functionality for sending and approving time off requests, leaving you falling back to sticky notes, text messages, emails, and phone calls—all of which are a disruption to your time and to-do list.
With a dedicated labor management app, employees gain access to the software via an app on their smartphone (and with 77% of Americans now owning and relying on one, chances are good your staff uses smartphones as their main method of communication). Employees can then use the app to make time-off requests, as well as submit their weekly availability.
Managers are notified via his or her app and can approve requests and adjust their schedule in-real time or at their convenience. Instead of having to recall one-off texts, emails or calls to update the schedule posted on-site, managers simply tap a few buttons and requests are approved and implemented instantaneously.
Not only does this save valuable time, it reduces the chances of human error that could leave employees’ requests unacknowledged or needs unmet, and important shifts with improper coverage.
2. Unlock employee shift swapping
Restaurant scheduling software lets employees independently initiate and research shift swap options with their peers when they realize they won’t be able to work a certain shift. The employees simply chat with each other via the app, and then the manager must approve the swap in order for it to reflect on the actual schedule. This keeps the manager out of the negotiation process and empowers employees to find their own coverage when needed.
This feature on restaurant scheduling platform 7shifts proved invaluable for fine dining concept Juvia in Miami Beach.
"The shift swapping aspect was the catalyst for wanting to get 7shifts. People were swapping [shifts] and not showing up, as there was no proof of the changes… Without having a way of keeping track of things, you develop a ‘whatever’ attitude and push things off. 7shifts gives us the ability to go back and prove what we’ve done.” - Suzy Vera, Director of HR, Juvia
3. Enable shift pools
Labor management apps let managers create shifts that can be claimed by any staff member, and easily identify unclaimed shifts that need coverage. There’s also a way to engage employees while finding coverage for those shifts.
By creating a shift pool, you can offer your staff the chance to bid on available, unassigned shifts. By encouraging staff to volunteer, you offer them the chance to work a few extra hours by choice instead of out of obligation. When employees take ownership over their schedules–even occasionally–they become invested.
When empowering staff to take control over their work schedule, improved accountability and engagement follow.
4. Create blackout dates
Managers often report that time-off requests can get very complicated (and competitive!), especially around peak vacation periods like winter holidays and school breaks. By using a robust scheduling program, you can black out days in which you need all-hands on deck and won’t be able to approve time off. This way, your employees don’t waste any time requesting or negotiating to take days off that are unavailable, and you won’t spend time fielding and ultimately rejecting those same requests.
The scheduling app also lets you make an advance staff-wide announcement so people know well ahead of time what the blackout period is. This prevents surprises, and aligns your team's expectations so nobody is caught off-guard if/when they can’t request time off. Remember, keeping open communication channels with your team is the key to building trust!
5. Encourage and guide discussion
Rather than rely on face to face meetings, phone calls or emails, a cloud-based restaurant scheduling app provides a direct channel to your entire staff. Managers and employees can chat back and forth through the app, the manager can message all employees, and they employees can even create groups (day shift, night shift, etc.) to share and receive updates and questions or just bond and connect as a team.
What’s more, employees will get a push notification 15 minutes after their shift ends and have 6 hours to leave the manager feedback about their shift. Having this feedback channel available to staff encourages them to engage in the cultivation of a happy and efficient workplace.
“Before 7shifts, staff and management communicated in person and through text messages which wasn’t ideal – especially when you need to send out a message to a large group of employees. We definitely didn’t have a platform for sending out messages to all 1000+ people at a time. Staff can now message each other directly, eliminating the need (and overhead) for contact lists to be circulated since all employees can be reached through the mobile app.” -Robert Drisaldi, COO, Cain Holding Group (Panera Bread, Slim Chickens)
5 Ways Scheduling Software Can Lower Labor Costs
A restaurant’s labor costs are often as high as 30% of the overall operating budget. With minimum wage increases, labor costs are on the rise, which means slim margins may shrink sooner.
While labor costs may seem like a frustrating expense you have little control over, using a smart scheduling program gives you the control needed to make more precise and cost-effective scheduling decisions.
The following examples show how various businesses have used 7shifts restaurant scheduling software to achieve amazing results.
1. POS Integrations
When integrating restaurant scheduling software with your point-of-sale system, you start using actual sales data to fuel your labor decisions.
For example, you may notice that sales on Sunday afternoons have been slow for several consecutive weekends, but staff is there, likely standing around. Seeing this pattern, you can tweak your schedule to assign only the headcount you need -- at least until Sunday afternoon football game crowds return. When you match your sales to your schedule, you can precisely determine the most appropriate staffing levels needed and when you do, the savings can be dramatic.
Before switching to a labor management app, Mackenzie Rautanen, area supervisor of Georgia Smoothie Kings was unsatisfied with the features of the scheduling dashboard of their POS system. “In one month of using 7shifts, all three of my locations have dropped their labor by 5-7%,” she says.
“The three locations used to spend upwards of 25% total on labor. Now we are (at) 15% and below on labor spending.”
A franchisee owner of a Steak ‘n Shake location in North Carolina also saw a drastic reduction in labor costs after adopting 7shifts. Before 7shifts, the store’s associate labor cost would run at about 19%, and now it’s almost always at 16.7%. “Take that 2%. We average $1.6 million a year, so that’s a lot of money. That’s what 7shifts is saving us. It’s just incredible, I wish I would have done it 5 years ago,” he says.
2. Budget Tool
Another standout feature is the weekly budget tool, which shows how much you’re allotting to labor costs while you make your schedules. The labor percentages will appear in red, which means your labor costs are higher than the labor target goal, or green, signaling that your labor costs are equal to or below your labor target goal.
Prior to using 7shifts, Black Rock coffee shops in Oregon attempted to keep their labor spending in check the old-fashioned way – with spreadsheets. “When payroll went through, we would have a look and find the number we needed, but by that time, you may have wasted 2 weeks or even a month knowing you’ve had high labor costs,” says one manager.
As a new restaurant, Elbow Room in Calgary, AB had a high labor target of 25%. “With 7shifts labor budget tool, we were able to cut it down 4–6% each week for the first month,” says its executive chef and owner. “As we get further, we’ll be able to cut down more. Having the labor budget there right in front of us on the schedule makes it easier.”
7shifts permitted other operations to stay informed and nimble to make improved business decisions on the spot. Prior to finding 7shifts, Toronto’s Barque Smokehouse used spreadsheets to track labor costs. “We had no idea where we stood on labour until we did a quarterly work up,” says the restaurant’s human resource manager. “It wasn’t an effective turnaround path for change. We are quicker to change things that are going wrong now.”
3. Weather forecasting
Inclement weather can impact business. If you set your location under settings on 7shifts, you’ll get a visual reminder of the forecasted weather under each day in your schedule. Pavement, a Massachusetts-based coffee shop group, have found this reminder very useful. “I like managers to note what the weather’s going to be for the next schedule,” says Pavement’s director of operations. “If a manager notices it’s going to rain and cuts labor by an hour, that makes a difference for our business. The visual reminder that weather is a factor is a great cue.”
Another way 7shifts help managers save money on labor costs is by automating oversight of labor compliance. For instance, in states like California there are a lot of regulations protecting how many hours employee work. There are also hefty fines – we’re talking half a million dollars in some cases. To avoid and reduce violations, 7shifts users will be warned about potential violations as they make changes to the schedule as well as notified of how much that violation could cost them in fines.
For instance, the owner of Sambo’s in Santa Barbara says he has to make sure that if an employee works over 6 hours, they get a 30-minute break. They also get a 10-minute break after working a set number of hours. For that reason, he has to make sure staff doesn’t clock in early or else the breaks he sets for them might be too late and he could be fined thousands of dollars. He set up an iPad with 7shifts in the back of house for the employees to clock in and out with, and he is able to review the time punches in the comfort of his home or anywhere with Internet access. “7shifts allows us to define that and track it,” he says. “That for me, is the greatest feature.”
Optimized shift scheduling will also improve staff morale, leading to higher retention rates and less turnover. Keep in mind that the average restaurant turnover rate is 71.2%, and the cost of onboarding a new employee averages $5,864. Anything you can do to keep employees as long as possible will reduce labor expenses.
With 7shifts, your employees will always have the most current schedule on their smartphones, they will be able to have better work/life balance with a predictable schedule, they have an efficient way to request time off and they can easily swap shifts if needed. But don’t just take our word for it.
“One of the biggest hurdles in this industry is the work-life balance of employees,” says owner of NYC chain Xi’An Famous Foods. “Without a good system to manage that, it becomes difficult to make it possible. The biggest cause of turnover we hear is no flexibility in scheduling. 7shifts has allowed us to make better planning easier.”
Back over at Barque Smokehouse in Toronto, the human resources manager recognizes that in the restaurant industry, employees are commonly juggling side gigs, family and school, all of which make schedules complicated. “With 7shifts, they feel like they have more control over their life and their free time is more available to them,” she says. “It can be an overwhelming cultural shift in an operation when something like scheduling is working really well.”
Time Savings Found When Using Scheduling Software
Dedicated scheduling software is built to automate as much of the time-consuming, recurring tasks as possible. For instance, if you don’t anticipate many changes, your labor managment app will let you copy and paste the schedule from a previous week and make minor shift adjustments. Managers can also create schedule templates to cater to the holidays or seasonal changes.
Time is money after all, and every hour managers can save while creating shift schedules is an hour that can be used to improve another aspect of the business.
At Steak’n’Shake, the time spent simply inputting information into their former scheduling program could take anywhere from 8 to 10 hours and would have to be done while physically at the store. “We would be constantly interrupted by employees and managers, which made for a difficult workflow,” says the owner.
“Now with 7shifts, we create schedules in an hour and a half. It’s just incredible.”
At Xi’an Famous Foods, the owner says he was able to cut the time spent on scheduling in half. Likewise, switching to scheduling software at Juvia has saved managers 5 hours per week–from 7 hours to 1-2 hours. At Woodwork restaurant in Edmonton, AB, scheduling a staff of 25 people used to take between 3 and 4 hours per week. And after making the switch, the GM usually creates the schedule for the entire month in 1 hour.
“It takes maybe an hour tops. Over the next month when staff request time off, all I need to do is move a shift here, move a shift there. It’s completely pain-free. So easy.” - Ryder Prat, Woodwork, Edmonton
What Have Wage Hikes Cost Restaurants? https://www.restaurantbusinessonline.com/workforce/what-have-wage-hikes-cost-restaurants-most-3-9-jump-labor-expenses ↩︎