Controlling Costs Associated With Staffing
Better Understand Your Business with the Help of a POS.
I have noticed some recent hot topics within industry publications with common themes around staff costs, actions and control. This got me thinking about the number of restaurant owners who just don’t look at (or don’t know about) the depth of data and reports that their POS system has to help them understand and improve their business. So, this article is dedicated to controlling costs associated with staffing.
LABOR CONTROL
Having a time and attendance module built into the Point-of-Sale (POS) system is a great way of ensuring that you are monitoring who is logged in and working at any given time. This detail can be used to feed your payroll system and to provide labor to sales ratio reports.
When you first begin looking at these reports it is important that you are looking at the same data sets over the different periods. For example, lunch will typically have a different ratio to dinner, as the average spend and service levels are quite different.
If you’re only just starting to monitor these areas, it is important to establish some baselines and gather a month or so of data before trying to make any comparisons. It is only then that you can start to look at how these ratios change and investigate why. For example, we often find that specific managers on duty can affect this ratio, as some are more diligent in getting the casuals to go home as service starts to wind down.
Most POS systems will calculate the labor hour to sales ratio on their reports. However, if this is not available within your POS system, you can simply divide total hours by total revenue. There are two ways of expressing this data:
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Hours ÷ Revenue = Labor required per $1 of revenue Ex. 35 hours ÷ $3,000 revenue = 0.011666 hours of labor per $1 of revenue
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Revenue ÷ Hours = Revenue earned per labor hour Ex. $3,000 ÷ 35 hours = $85.71 of revenue per labor hour
Note: The latter is often easier to work with. Take one of these calculations every day for a month and you will be able to see days that are notably different. Then the next step is look into why.
CONTROL OVER ACCESS TO VOIDS AND RETURNS
It’s important to review who in your restaurant system has access to voiding items and why. Most owners will say “we give our supervisors access to perform voids after a service round”, but are you tracking:
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How many voids have occurred?
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What is the total value of the voids?
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Why have these voids taken place?
We all like to believe that we can trust our supervisors and managers but it’s important to regularly review this. Your POS system will have standard reports on the quantity and value of voids on a given day or service period and most will have much greater depth of reports on who is performing these voids. A lot of POS systems can even force a reason code to be entered when voids are performed giving you further information.
Again, these reports need to be reviewed across multiple days to build up trends, so you can analyze why on particular days the voids are much larger. For example, is it always when a particular staff member is on shift? (Note: This could just be pointing to a training need, or it could be something much more sinister).
Gaining even further control over staff usage of your POS features can be as simple as reviewing a few reports, or by using transactional review systems like Exception Based Reporting (XBR). These look at specific patterns in transactions and highlight those of the most concern. These XBR systems can add cost sure, but most cases have a full ROI in less than 12 months.
EFFICIENCY IN STAFF AND MANAGERS
It’s not always easy to know who is a great employee. Customer feedback is a great indicator, but this doesn’t always mean staff are working hard and pulling their weight. For example, it’s much easier to get great customer comments if you’re only looking after half the number of customers as your colleagues.
Start to look at your systems capabilities and reporting to review:
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Who processes the highest volume of sales?
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Who is accountable for fewer voids?
When interpreted correctly, the data held within POS reports can help you better understand your business situation. It’s time to take a closer look at what reports are available to you and what they can tell you about your business. | TOM HALLIGAN, NW REGIONAL GM, MICROS SYSTEMS
About MICROS
MICROS Systems, Inc., an ORLA Endorsed Service Provider, is the leading provider of point-of-sale (POS) systems worldwide, offering systems that meet the unique requirements of all operators from a single terminal restaurant to the largest of chain operations. For more information call ORLA at 503.682.4422.